UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, ~~2017~~2023

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

For the transition period from __________ to __________

Commission File Number: 001-37513

~~JM GLOBAL HOLDING COMPANY~~GD CULTURE GROUP LIMITED

(Exact name of registrant as specified in its charter)

~~Delaware~~Nevada

47-3709051

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

~~(I.R.S. Employer~~

Identification Number)

~~1615 South Congress~~22F - 810 Seventh Avenue,
~~Suite 103~~

~~Delray Beach, FL~~

~~33445~~

New York, NY 10019

10019

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: ~~(561) 900-3672~~+1-347- 2590292

Not applicable

~~(Former~~(Former name or former address, if changed since last report)

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001		GDC		Nasdaq Capital Market

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

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Website, if any,~~ every Interactive Date File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐ ~~(Do not check if a smaller reporting company)~~☒	Smaller reporting company	☒
		Emerging growth company	☒☐

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

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

As of November ~~13, 2017,~~20, 2023, there were ~~5,599,388~~4,489,816 shares of the Company’s common stock issued and outstanding.

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION	1

ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)	1
	~~Condensed Interim Balance Sheets at September 30, 2017 (unaudited) and December 31, 2016~~	1
	~~Condensed Interim Statements of Operations for the three and nine months ended September 30, 2017 (unaudited) and September 30, 2016 (unaudited)~~	2
	~~Condensed Interim Statements of Stockholders’ Equity for the periods ended December 31, 2016 and September 30, 2017 (unaudited)~~	3
	~~Condensed Interim Statements of Cash Flows for the periods ended September 30, 2017 and September 30, 2016 (unaudited)~~	4
	~~Notes to Condensed Interim Financial Statements (unaudited)~~	5

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF ~~OPERATIONS~~O PERATIONS	1934

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	2545

ITEM 4.	CONTROLS AND PROCEDURES	2546

PART II.	OTHER INFORMATION	2647

ITEM 1.	LEGAL PROCEEDINGS	2647

ITEM 1A.	RISK FACTORS	2647

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	2647

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	2647

ITEM 4.	MINE SAFETY DISCLOSURES	2647

ITEM 5.	OTHER INFORMATION	2647

ITEM 6.	EXHIBITS	2648

CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains statements that may be deemed to be “forward-looking statements” within the meaning of the federal securities laws. These statements relate to anticipated future events, future results of operations and or future financial performance. In some cases, you can identify forward-looking statements by their use of terminology such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “future,” “intend,” “may,” “ought to,” “plan,” “possible,” “potentially,” “predicts,” “project,” “should,” “will,” “would,” negatives of such terms or other similar terms. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The forward-looking statements in this Quarterly Report on Form 10-Q include, without limitation, statements relating to:

●

our goals and strategies;

●

our future business development, results of operations and financial condition;

●

our estimates regarding expenses, future revenues, capital requirements and our need for additional financing;

●

our estimates regarding the market opportunity for our services;

●

the impact of government laws and regulations;

●

our ability to recruit and retain qualified personnel;

●

our failure to comply with regulatory guidelines;

●

uncertainty in industry demand;

●

general economic conditions and market conditions in the financial services industry;

●

future sales of large blocks or our securities, which may adversely impact our share price; and

●

depth of the trading market in our securities.

The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties, including those described in Item 1A “Risk Factors” of our Annual Report of Form 10-K for the fiscal year ended December 31, 2022 and elsewhere in this Quarterly Report on Form 10-Q.

You should not unduly rely on any forward-looking statements. Although we believe that the expectations reflected in the forward- looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q, to conform these statements to actual results or to changes in our expectations.

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GD CULTURE GROUP LIMITED AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	September 30,			December 31,
	2023			2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,647,148		$	389,108
Accounts receivable, net		150,000			194,520
Other receivables, net		146,575			1,026,293
Prepaid expense - related party		100,000			-
Prepayments		4,582,684			-
Total current assets		6,626,407			1,609,921

NON-CURRENT ASSETS
Plant and equipment, net		8,866			502
Operating lease right-of-use assets, net		1,683,518			-
Goodwill		-			2,190,485
Intangible assets, net		3,087,500			-
Long-term investments, net		2,500,000			-
Total non-current assets		7,279,884			2,190,987
Total assets	$	13,906,291		$	3,800,908

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable	$	3,838		$	127,475
Other payables and accrued liabilities		2,729			2,099
Other payables - related parties		-			195,732
Current portion of operating lease liabilities		324,162			-
Taxes payable		-			8,478
Total current liabilities		330,729			333,784

NON-CURRENT LIABILITIES
Non-current portion of operating lease liabilities		1,388,238			-
Total non-current liabilities		1,388,238			-
Total liabilities		1,718,967			333,784
COMMITMENTS AND CONTINGENCIES (NOTE 14)		-			-

SHAREHOLDERS’ EQUITY
Preferred stock, $0.0001 par value, 20,000,000 shares authorized, no shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		-			-
Common stock, $0.0001 par value, 200,000,000 shares authorized, 3,053,563 and 1,844,877 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		305			184
Stock subscription receivable		(1,370,614	)		-
Additional paid-in capital		68,544,206			60,124,087
Statutory reserves		4,467			4,467
Accumulated deficit		(60,446,156	)		(56,841,074	)
Accumulated other comprehensive income		71,468			179,460
Total GD Culture Group Limited shareholders’ equity		6,803,676			3,467,124
Noncontrolling interest		5,383,648			-
Total shareholders’ equity		12,187,324			3,467,124
Total liabilities and shareholders’ equity	$	13,906,291		$	3,800,908

Giving retroactive effect to the 1-for-30 reverse stock split effective on November 9, 2022.

GD CULTURE GROUP LIMITED AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

(UNAUDITED)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2023			2022			2023			2022
REVENUES
Enterprise brand management services		-			-			150,000			-
Software copyright		-			-			-			-
TOTAL REVENUES		-			-			150,000			-

COST OF REVENUES
Enterprise brand management services		-			-						-
TOTAL COST OF REVENUES		-			-						-
GROSS PROFIT		-			-						-

OPERATING EXPENSES
Selling, general and administrative		3,667,011			64,041			3,942,947			6,800,079
Impairment of prepayments		-			-			-			12,949,329
TOTAL OPERATING EXPENSES		3,667,011			64,041			3,942,947			19,749,408

LOSS FROM OPERATIONS		(3,667,011	)		(64,041	)		(3,792,947	)		(19,749,408	)

OTHER INCOME (EXPENSE)
Interest income		46,891			-			47,070			-
Interest expense		(52	)		-			(52	)		-
Other income		-			-			100,000			-
Total other income, net		46,839			-			147,018			-

LOSS BEFORE INCOME TAXES FROM CONTINUING OPERATIONS		(3,620,172	)		(64,041	)		(3,645,929	)		(19,749,408	)
PROVISION FOR INCOME TAXES		-			-			-			-
LOSS FROM CONTINUING OPERATIONS		(3,620,172	)		(64,041	)		(3,645,929	)		(19,749,408	)
Net loss attributable to noncontrolling interest		(102,485	)		-			(102,485	)		-
LOSS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO GD CULTURE GROUP LIMITED		(3,517,687	)		(64,041	)		(3,543,444	)		(19,749,408	)

Discontinued operations:
Loss from discontinued operations, net of taxes		(10,358	)		-			(61,408	)		303,089
Loss on disposal, net of taxes		(230	)		(4,027,930	)		(230	)		(4,027,930	)
Net loss		(3,528,275	)		(4,091,971	)		(3,605,082	)		(23,474,249	)

OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustment		4,291			(261,985	)		(107,992	)		(118,184	)
COMPREHENSIVE LOSS		(3,523,984	)		(4,353,956	)		(3,713,074	)		(23,592,433	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
Basic and diluted*		3,053,563			1,427,927			2,447,446			1,427,927

Loss per share from continuing operations
Basic and diluted		(1.15	)		(0.04	)		(1.45	)		(13.83	)

Loss per share from discontinued operations
Basic and diluted		(0.00	)		(2.82	)		(0.03	)		(2.61	)

Loss per share available to common shareholders
Basic and diluted		(1.16	)		(2.87	)		(1.47	)		(16.44	)

GD CULTURE GROUP LIMITED AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(UNAUDITED)

	For the Nine Months Ended September 30, 2022
											Additional			Stock			Retained Earnings (Accumulated Deficit)					Accumulated Other
	Preferred Stock				Common Stock						Paid-in			Subscription			Statutory					Comprehensive
	Shares		Amount		Shares			Amount			Capital			Receivable			Reserves		Unrestricted			Income (Loss)			Total
BALANCE, January 1, 2022		-		-		1,543,793			154			83,038,827			(25,165,728	)		-		(26,019,119	)		225,857			32,079,991
Net loss		-		-		-			-			-			-			-		(23,474,249	)		-			(23,474,249	)
Issuance of common stock for acquisition Yuanma		-		-		256,000			26			7,679,974			-			-		-			-			7,680,000
Issuance of common stock for acquisition Highlight Media		-		-		300,000			30			2,249,970			-			4,467		-			-			2,254,467
The cancellation of the common stock		-		-		(254,916	)		(26	)		(32,844,684	)		-			-		-			-			(32,844,710	)
Stock subscription receivable from issuance of common stock		-		-		-			-			-			25,165,728			-		-			-			25,165,728
Foreign currency translation		-		-		-			-			-			-			-		-			(118,184	)		(118,184	)
BALANCE, September 30, 2022 (Unaudited)		-	$	-		1,844,877		$	184		$	60,124,087		$	-		$	4,467	$	(49,493,368	)	$	107,673		$	10,743,043

GD CULTURE GROUP LIMITED AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(CONTINUED) (UNAUDITED)

	For the Three Months Ended September 30, 2022
									Additional			Stock			Retained Earnings (Accumulated Deficit)					Accumulated Other
	Preferred Stock				Common Stock				Paid-in			Subscription			Statutory					Comprehensive
	Shares		Amount		Shares		Amount		Capital			Receivable			Reserves		Unrestricted			Income (Loss)			Total
BALANCE, July 1, 2022		-		-		1,544,877		154		74,276,715			(16,403,618	)		-		(45,401,397	)		369,658			12,841,512
Net loss		-		-		-		-		-			-			-		(4,091,971	)		-			(4,091,971	)
Issuance of common stock for acquisition Yuanma		-		-		-		-		-			-			-		-			-			-
Issuance of common stock for acquisition Highlight Media		-		-		300,000		30		2,249,970			-			4,467		-			-			2,254,467
The cancellation of the common stock		-		-		-		-		(16,402,598	)		-			-		-			-			(16,402,598	)
Stock subscription receivable from issuance of common stock		-		-		-		-		-			16,403,618			-		-			-			16,403,618
Foreign currency translation		-		-		-		-		-			-			-		-			(261,985	)		(261,985	)
BALANCE, September 30, 2022 (Unaudited)		-	$	-		1,844,877	$	184	$	60,124,087		$	-		$	4,467	$	(49,493,368	)	$	107,673		$	10,743,043

GD CULTURE GROUP LIMITED AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(CONTINUED) (UNAUDITED)

	For the Nine Months Ended September 30, 2023
											Additional			Stock			Retained Earnings (Accumulated Deficit)					Accumulated Other			Total GD Culture Group Limited						Total
	Preferred Stock				Common Stock						Paid-in			Subscription			Statutory					Comprehensive			Shareholders’			Noncontrolling			Shareholders’
	Shares		Amount		Shares			Amount			Capital			Receivable			Reserves		Unrestricted			Loss			Equity			interest			Equity
BALANCE, January 1, 2023		-		-		1,844,877			184			60,124,087			-			4,467		(56,841,074	)		179,460			3,467,124			-			3,467,124
Net loss		-		-		-			-			-			-			-		(3,605,082	)		-			(3,605,082	)		(102,485	)		(3,707,567	)
Issuance of common stock for cash		-		-		1,154,519			115			8,618,125			-			-		-			-			8,618,240			-			8,618,240
Contribution by noncontrolling shareholder		-		-		-			-			-			-			-		-			-			-			5,486,133			5,486,133
Issuance of common stock for acquisition right, title, and interest in and to the certain software		-		-		187,500			19			749,981			-			-		-			-			750,000			-			750,000
The cancellation of the common stock		-		-		(133,333	)		(13	)		(947,987	)		-			-		-			-			(948,000	)		-			(948,000	)
Stock subscription receivable from issuance of common stock		-		-		-			-			-			(1,370,614	)		-		-			-			(1,370,614	)		-			(1,370,614	)
Foreign currency translation		-		-		-			-			-			-			-		-			(107,992	)		(107,992	)		-			(107,992	)
BALANCE, September 30, 2023 (Unaudited)		-	$	-		3,053,563		$	305		$	68,544,206		$	(1,370,614	)	$	4,467	$	(60,446,156	)	$	71,468		$	6,803,676			5,383,648			12,187,324

GD CULTURE GROUP LIMITED AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(CONTINUED) (UNAUDITED)

	For the Three Months Ended September 30, 2023
									Additional		Stock			Retained Earnings (Accumulated Deficit)					Accumulated Other		Total GD Culture Group Limited						Total
	Preferred Stock				Common Stock				Paid-in		Subscription			Statutory					Comprehensive		Shareholders’			Noncontrolling			Shareholders’
	Shares		Amount		Shares		Amount		Capital		Receivable			Reserves		Unrestricted			Loss		Equity			interest			Equity
BALANCE, July 1, 2023		-		-		3,053,563		305		68,544,206		-			4,467		(56,917,881	)		67,177		11,698,274			-			11,698,274
Net loss		-		-		-		-		-		-			-		(3,528,275	)		-		(3,528,275	)		(102,485	)		(3,630,760	)
Issuance of common stock for cash		-		-		-		-		-		-			-		-			-		-			-			-
Contribution by noncontrolling shareholder		-		-		-		-		-		-			-		-			-		-			5,486,133			5,486,133
Issuance of common stock for acquisition right, title, and interest in and to the certain software		-		-		-		-		-		-			-		-			-		-			-			-
The cancellation of the common stock		-		-		-		-		-		-			-		-			-		-			-			-
Stock subscription receivable from issuance of common stock		-		-		-		-		-		(1,370,614	)		-		-			-		(1,370,614	)		-			(1,370,614	)
Foreign currency translation		-		-		-		-		-		-			-		-			4,291		4,291			-			4,291
BALANCE, September 30, 2023 (Unaudited)		-	$	-		3,053,563		305		68,544,206	$	(1,370,614	)	$	4,467	$	(60,446,156	)	$	71,468	$	6,803,676			5,383,648			12,187,324

GD CULTURE GROUP LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Nine Months Ended September 30,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(3,707,567	)	$	(23,474,249	)
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation of plant and equipment		751			33,192
Amortization of intangible assets		162,500			98
Lease expenses of right-of-use assets		60,224			-
Impairment of prepayments		-			12,949,329
Disposal of the company		230			4,027,930
Goodwill impairments		2,070,753			6,590,339
Change in operating assets and liabilities

Accounts receivables		(52,196	)		-
Other receivables		(51,399	)		757
Prepaid expense - related party		(100,000	)		192,863
Inventories		-			(3,001	)
Prepayments		(4,610,398	)		(68,962	)
Accounts payable		(91,273	)		196,417
Other payables and accrued liabilities		(16,410	)		(99,892	)
Customer deposits		68,531			(2,156,462	)
Lease liabilities		(31,342	)		-
Taxes payable		(6,994	)		(493	)
Other payables - related parties		(160,760	)		845,389
Net cash used in operating activities		(6,465,350	)		(966,745	)

CASH FLOWS FROM INVESTING ACTIVITY:
Net increase in cash from acquisition of Highlight Media		-			47,498
Net decrease in cash from disposal of discontinued operations		-			(12,316,416	)
Purchase of intangible assets		(2,500,000	)		-
Purchase of equipment		(9,617	)		(6,689	)
Purchase of convertible notes		(2,500,000	)		-
Net cash used in investing activity		(5,009,617	)		(12,275,607	)

CASH FLOWS FROM FINANCING ACTIVITY:
Proceeds from issuance of common stock		8,618,240			-
Contribution by noncontrolling shareholder		4,115,519			-
Net cash provided by financing activity		12,733,759			-

EFFECT OF EXCHANGE RATE ON CASH		(752	)		(1,095,699	)

NET INCREASE/(DECREASE) IN CASH		1,258,040			(14,338,051	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		389,108			14,588,330
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	1,647,148		$	250,279

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	-		$	935

NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES
Issuance of common stock for acquisition Yuanma		-			7,680,000
Issuance of common stock for acquisition Highlight Media		-			2,250,000
Issuance of common stock for acquisition right, title, and interest in and to the certain software		750,000			-
The cancellation of the common stock		948,000			32,844,710
Initial recognition of right-of-use assets and lease liabilities		1,731,824			-

GD CULTURE GROUP LIMITED AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Nature of business and organization

GD Culture Group Limited (“GDC” or the “Company”), formerly known as Code Chain New Continent Limited, TMSR Holding Company Limited and JM ~~GLOBAL HOLDING COMPANY~~

~~Condensed Interim Balance Sheets~~Global Holding Company, is a Nevada corporation and a holding company that has no material operation of its own. The Company’s current subsidiaries, Citi Profit Investment Holding Limited (“Citi Profit”), Highlights Culture Holding Co., Limited (“Highlight HK”), Shanghai Highlight Entertainment Co., Ltd. (“Highlight WFOE”), and previous subsidiaries, TMSR Holdings Limited (“TMSR HK”) and Makesi IoT Technology (Shanghai) Co., Ltd. (“Makesi WFOE”) are also holding companies with no material operations.

September 30, 2017 December 31, 2016
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash $ 2,799 $ 150,306
Prepaid assets 22,622 15,580
Total current assets 25,421 165,886

Trust account (See Note 7) 40,434,721 50,109,326

Total assets $ 40,460,142 $ 50,275,212
LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:
Accounts payable $ 92,061 $ 19,922
Accrued expenses 214,339 82,647
Due to affiliates 140,500 140,500
Total current liabilities 446,900 243,069

Common stock subject to possible redemption: 3,036,888 and 4,000,000 shares (at a redemption value of approximately $10 per share) at September 30, 2017 and December 31, 2016, respectively (See Note 3) 30,368,880 40,000,000
Commitments and contingencies

STOCKHOLDERS’ EQUITY:
Preferred stock, $0.0001 par value, 1,000,000 shares authorized; none issued and outstanding
Common stock, $0.0001 par value, 15,000,000 shares authorized; 2,562,500 shares issued and outstanding (excluding 3,036,888 and 4,000,000 shares subject to redemption) at September 30, 2017 and December 31, 2016, respectively (See Note 3) 256 256
Additional paid-in capital 10,807,708 10,807,708
Accumulated deficit (1,163,602 ) (775,821 )
Total stockholders’ equity 9,644,362 10,032,143
Total liabilities and stockholders’ equity $ 40,460,142 $ 50,275,212

Shanghai Xianzhui Technology Co., Ltd. (“SH Xianzhui”) was incorporated by Highlight WFOE and other two shareholders on August 10, 2023. SH Xianzhui is principally engaged in the provision of social media marketing agency service. Highlight WFOE owns 60% of the total equity interest of SH Xianzhui.

AI Catalysis Corp. (“AI Catalysis”) is a Nevada corporation, incorporated on May 18, 2023. AI Catalysis is expected to bridge the realms of the internet, media, and artificial intelligence (“AI”) technologies. Positioned at the crossroads of traditional and streaming media, AI Catalysis plans to elevate the experience of media with AI-based interactive and smart content, aiming to transform the whole media landscape. At present, AI Catalysis' primary focus is the application of AI digital human technology with the sectors of e-commerce and entertainment to improve the interaction experiences online. AI Catalysis strives to deliver stable interactive livestreaming products to AI Catalysis' users. AI Catalysis foresees future expansion to a variety of business sectors with AI applications in different scenarios. AI Catalysis plans to enter into the livestreaming market with a focus on e-commerce and livestreaming interactive game.

Prior to September 28, 2022, we also conducted business through Sichuan Wuge Network Games Co., Ltd. (“Wuge”). Makesi WFOE had a series of contractual arrangement with Wuge that established a VIE structure. For accounting purposes, Makesi WFOE was the primary beneficiary of Wuge. Accordingly, under U.S. GAAP, GDC treated Wuge as the consolidated affiliated entity and has consolidated Yuanma’s financial results in Wuge’s financial statements prior to September 28, 2022. Wuge focused its business on research, development and application of Internet of Things (IoT) and electronic tokens Wuge digital door signs. On September 28, 2022, Makesi WFOE entered into a termination agreement with Wuge and the shareholders of Wuge to terminate the VIE Agreements and to cancel the shares previously issued to the shareholders of Wuge, based on the average closing price of $0.237 per share of the Company during the 30 trading days immediately prior to the date of the termination agreement. As a result of such termination, the Company no longer treats Wuge as a consolidated affiliated entity or consolidates the financial results and balance sheet of Wuge in the Company’s consolidated financial statements under U.S. GAAP.

Prior to June 26, 2023, we had a subsidiary TMSR HK, which owns 100% equity interest in Makesi WFOE. Makesi WFOE had a series of contractual arrangement with Shanghai Yuanma Food and Beverage Management Co., Ltd. (“Yuanma”) that established a VIE structure. For accounting purposes, Makesi WFOE was the primary beneficiary of Yuanma. Accordingly, under U.S. GAAP, GDC treated Yuanma as the consolidated affiliated entity and has consolidated Yuanma’s financial results in GDC’s financial statements prior to June 26, 2023. On June 26, 2023, GDC entered into a share purchase agreement with a buyer unaffiliated with the Company. Pursuant to the agreement, the Company agreed to sell and the buyer agreed to purchase all the issued and outstanding equity interest in TMSR HK. The purchase price for the transaction contemplated by the Agreement was $100,000. The sale of TMSR HK included the sale of Makesi WFOE and Yuanma. None of TMSR HK, Makesi WFOE or Yuanma had any assets, employees or operation. The sale of TMSR HK did not have any material impact on the Company’s consolidated financial statements.

Prior to September 26, 2023, we also conducted business through Shanghai Highlight Media Co., Ltd. (“Highlight Media”). Highlight WFOE had a series of contractual arrangement with Highlight Media. For accounting purposes, Highlight WFOE was the primary beneficiary of Highlight Media. Accordingly, under U.S. GAAP, GDC treated Highlight Media as the consolidated affiliated entity and has consolidated Highlight Media’s financial results in GDC’s financial statements prior to September 26, 2023. Highlight Media was an integrated marketing service agency, focusing on enterprise brand management, crisis public relations, intelligent public opinion monitoring, media PR, financial and economic we-media operation, digital face application, large-scale exhibition services and other businesses. On September 26, 2023, Highlight WFOE entered into a termination agreement with Highlight Media and the shareholders of Highlight Media to terminate the VIE Agreements and sold the interest in the VIE Agreements for a purchase price of $100,000. As a result of such termination, the Company no longer treats Highlight Media as a consolidated affiliated entity or consolidates the financial results and balance sheet of Highlight Media in the Company’s consolidated financial statements under U.S. GAAP.

The accompanying ~~notes are an integral part~~consolidated financial statements reflect the activities of GDC and each of the ~~unaudited condensed interim~~following entities:

Name	Background	Ownership
Citi Profit BVI	● A British Virgin Island company Incorporated on April 2019	100% owned by the Company
TMSR HK2	● A Hong Kong company ● Incorporated on April 2019	100% owned by Citi Profit BVI
Highlight HK	● A Hong Kong company ● Incorporated on November 2022	100% owned by Citi Profit BVI
Makesi WFOE2	● A PRC limited liability company and deemed a wholly foreign owned enterprise (WFOE) ● Incorporated on December 2020	100% owned by TMSR HK
Highlight WFOE	● A PRC limited liability company and deemed a wholly foreign owned enterprise (WFOE) ● Incorporated on January 2023	100% owned by Highlight HK
Wuge¹	● A PRC limited liability company ● Incorporated on July 4, 2019	VIE of Makesi WFOE
Highlight Media³	● A PRC limited liability company ● Incorporated on September 16, 2022	VIE of Highlight WFOE
AI Catalysis	● A Nevada company ● Incorporated on May 2023	100% owned by the Company
SH Xianzhui	● A PRC limited liability company ● Incorporated on May 2023	60% owned by Highlight WFOE

	1	Disposed on September 28, 2022
	2	Disposed on June 26, 2023
	3	Disposed on September 26, 2023

Contractual Arrangements

Wuge, Yuanma, Highlight Media is controlled through contractual agreements in lieu of direct equity ownership by the Company or any of its subsidiaries. Such contractual arrangements consist of a series of five agreements, consulting services agreement, equity pledge agreement, call option agreement, voting rights proxy agreement, and operating agreement.

Material terms of each of the VIE agreements with Wuge are described below. The VIE agreements with Wuge were terminated and the Company disposed Wuge as of September 28, 2022.

Technical Consultation and Services Agreement.

Pursuant to the technical consultation and services agreement between Wuge and Tongrong Technology (Jiangsu) Co., Ltd., a then indirect subsidiary of the Company (“Tongrong WFOE”), dated January 3, 2020, Tongrong WFOE has the exclusive right to provide consultation services to Wuge relating to Wuge’s business, including but not limited to business consultation services, human resources development, and business development. Tongrong WFOE exclusively owns any intellectual property rights arising from the performance of this agreement. Tongrong WFOE has the right to determine the service fees based on Wuge’s actual operation on a quarterly basis. This agreement will be effective as long as Wuge exists. Tongrong WFOE may terminate this agreement at any time by giving 30 days’ prior written notice to Wuge.

Equity Pledge Agreement.

Under the equity pledge agreement among Tongrong WFOE, Wuge and the shareholders of Wuge dated January 3, 2020, the shareholders of Wuge pledged all of their equity interests in Wuge to Tongrong WFOE to guarantee Wuge’s performance of relevant obligations and indebtedness under the technical consultation and services agreement. In addition, the shareholders of Wuge will complete the registration of the equity pledge under the agreement with the competent local authority. If Wuge breaches its obligation under the technical consultation and services agreement, Tongrong WFOE, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. This pledge will remain effective until all the guaranteed obligations are performed or the shareholders of Wuge cease to be shareholders of Wuge.

Equity Option Agreement.

Under the equity option agreement among Tongrong WFOE, Wuge and the shareholders of Wuge dated January 3, 2020, each of the shareholders of Wuge irrevocably granted to Tongrong WFOE or its designee an option to purchase at any time, to the extent permitted under PRC law, all or a portion of his equity interests in Wuge. Also, Tongrong WFOE or its designee has the right to acquire any and all of its assets of Wuge. Without Tongrong WFOE’s prior written consent, Wuge’s shareholders cannot transfer their equity interests in Wuge and Wuge cannot transfer its assets. The acquisition price for the shares or assets will be the minimum amount of consideration permitted under the PRC law at the time of the exercise of the option. This pledge will remain effective until all options have been exercised.

Voting Rights Proxy and Financial Support Agreement.

Under the voting rights proxy and financial support agreement among Tongrong WFOE, Wuge and the shareholders of Wuge dated January 3, 2020, each Wuge Shareholder irrevocably appointed Tongrong WFOE as its attorney-in-fact to exercise on such shareholder’s behalf any and all rights that such shareholder has in respect of his equity interests in Wuge, including but not limited to the power to vote on its behalf on all matters of Wuge requiring shareholder approval in accordance with the articles of association of Wuge. The proxy agreement is for a term of 20 years and can be extended by Tongrong WFOE unilaterally by prior written notice to the other parties.

On January 11, 2021, Makesi WFOE entered into a series of assignment agreements with Tongrong WFOE, Wuge and the shareholders of Wuge, pursuant to which Tongrong WFOE assign all its rights and obligations under the VIE agreements to Makesi WFOE. The VIE agreements and the assignment agreements granted Makesi WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Wuge, including absolute rights to control the management, operations, assets, property and revenue of Wuge. The assignment did not have any impact on Company’s consolidated financial statements.

~~JM GLOBAL HOLDING COMPANY~~

~~Condensed Interim Statements~~On September 28, 2022, Makesi WFOE entered into a termination agreement with Wuge and the shareholders of ~~Operations (Unaudited)~~

For the Three Months Ended September 30, For the Nine Months Ended September 30, For the Nine Months Ended September 30,
2017 2016 2017 2016

Revenue $ - $ - $ - $ -

Operating expenses 371,161 96,174 615,384 512,981

Loss from operations (371,161 ) (96,174 ) (615,384 ) (512,981 )

Interest income 94,560 17,513 227,603 53,497
Net loss attributable to common stock (excluding shares subject to possible redemption) $ (276,601 ) $ (78,661 ) $ (387,781 ) $ (459,484 )

Basic and diluted net loss per share $ (0.11 ) $ (0.03 ) $ (0.15 ) $ (0.18 )

Weighted average number of common stock outstanding
Basic and diluted (excluding shares subject to possible redemption) 2,562,500 2,562,500 2,562,500 2,562,500

~~The accompanying notes are an integral part~~Wuge to terminate the VIE agreements and to cancel the shares previously issued to the shareholders of Wuge, based on the average closing price of $0.237 per share of the ~~unaudited condensed interim financial statements.~~

~~JM GLOBAL HOLDING COMPANY~~

~~Condensed Interim Statements of Stockholders’ Equity~~

~~For~~Company during the ~~periods ended December 31, 2016 and September~~ 30 ~~2017 (Unaudited)~~

Common Stock Additional Total
Number Paid-in Accumulated Stockholders’
of Shares Amount Capital Deficit Equity

Balance, December 31, 2015 2,562,500 256 10,857,228 (234,205 ) 10,623,279

Cancellation of Common stock issuable to Firstrust - (65,066 ) - (65,066 )

Stock-based compensation recorded for options issued to a director by the Sponsor 15,546 - 15,546

Net loss - - - (541,616 ) (541,616 )

Balance, December 31, 2016 2,562,500 $ 256 10,807,708 (775,821 ) 10,032,143

Net loss - - - (387,781 ) (387,781 )

Balance, September 30, 2017 2,562,500 $ 256 $ 10,807,708 $ (1,163,602 ) $ 9,644,362

~~The accompanying notes are an integral part~~trading days immediately prior to the date of the ~~unaudited condensed interim~~termination agreement. As a result of such termination, the Company no longer treats Wuge as a consolidated affiliated entity or consolidates the financial ~~statements.~~

~~JM GLOBAL HOLDING COMPANY~~

~~Condensed Interim Statements~~results and balance sheet of ~~Cash Flows (Unaudited)~~

Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016

Cash flows from operating activities:
Net loss $ (387,781 ) $ (459,484 )
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issuable for consulting fees 97,600
Stock-based compensation for director fees 15,546
Changes in operating assets and liabilities
Increase in prepaid expenses (7,042 ) (3,882 )
Increase (decrease) in accounts payable 72,139 (26,970 )
Increase in accrued expenses 131,692 18,077
Net cash used in operating activities (190,992 ) (359,113 )

Cash flows from investing activities:

Withdrawal from Trust Account upon redemption of 963,112 shares 9,631,120
Interest income withdrawal (reinvested) in Trust Account 43,485 (53,497 )
Net cash provided by (used in) investing activities 9,674,605 (53,497 )

Cash flows from financing activities:
Redemption of 963,112 shares (9,631,120 ) -
Net cash used in financing activities (9,631,120 ) -

Net change in cash (147,507 ) (412,610 )
Cash, beginning of period 150,306 623,044

Cash, end of period $ 2,799 $ 210,434

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Non-cash operating and financing activities
Payments made directly to a vendor by an affiliate of China Sunlong Environmental Technology, Inc. $ 30,000 $ -
Cancellation of common stock issued for future services included in unamortized prepaid expenses $ - $ 65,066

~~The accompanying notes are an integral part of~~Wuge in the ~~unaudited condensed interim~~Company’s consolidated financial ~~statements.~~

~~JM GLOBAL HOLDING COMPANY~~

~~NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS (unaudited)~~

~~September 30, 2017~~statements under U.S. GAAP.

~~1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS~~Material terms of each of the VIE agreements with Yuanma are described below. The Company disposed TMSR HK, Makesi WFOE and Yuanma on June 26, 2023.

Technical Consultation and Services Agreement.

Pursuant to the technical consultation and services agreement between WFOE and Yuanma dated June 21, 2022, WFOE has the exclusive right to provide consultation services to Yuanma relating to Yuanma’s business, including but not limited to business consultation services, human resources development, and business development. WFOE exclusively owns any intellectual property rights arising from the performance of this agreement. WFOE has the right to determine the service fees based on Yuanma’s actual operation on a quarterly basis. This agreement will be effective for 20 years and can be extended by WFOE unilaterally by prior written notice to the other parties. WFOE may terminate this agreement at any time by giving a 30 days’ prior written notice to Yuanma. If any party breaches the agreement and fails to cure within 30 days from the written notice from the non-breach party, the non-breach party may (i) terminate the agreement and request the breaching party to compensate the non-breaching party’s loss or (ii) request special performance by the breaching party and the breaching party to compensate the non-breaching party’s loss.

~~Organization~~Equity Pledge Agreement.

Under the equity pledge agreement among WFOE, Yuanma and ~~General~~

~~JM Global Holding Company (the “Company,” “we” or “us” or “our”) is a blank check company incorporated~~Yuanma Shareholders dated June 21, 2022, Yuanma Shareholders pledged all of their equity interests in ~~Delaware on April 10, 2015. The Company was formed for~~Yuanma to WFOE to guarantee Yuanma’s performance of relevant obligations and indebtedness under the ~~purpose~~technical consultation and services agreement. In addition, Yuanma Shareholders will complete the registration of acquiring, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, exchangeable share transaction or other similar business transaction, one or more operating businesses or assets (“Business Combination”). The Company has neither engaged in any operations nor generated any operating revenue to date. The Company’s sponsor is Zhong Hui Holding Limited, a Seychelles limited company (the “Sponsor”). The Company has selected December 31 as its fiscal year end.

~~Financing~~

~~The registration statement for~~ the ~~Company’s initial public offering (the “Public Offering”) (as described in Note 4) was declared effective by~~equity pledge under the ~~United States Securities and Exchange Commission (“SEC”) on July 23, 2015. The Sponsor purchased, simultaneously~~agreement with the ~~closing of~~competent local authority. If Yuanma breaches its obligation under the Public Offering on July 29, 2015, 250,000 units at $10.00 per unit in a private placement for an aggregate price of $2,500,000. Each unit purchased is substantially identical to the units sold in the Public Offering, except that the Sponsor has agreed that it will not seek redemption of the stock contained within such units. In addition, the Sponsor purchased an aggregate of 3,000,000 units in the Public Offering. The Sponsor had agreed that it will not seek redemption of 1,000,000 shares of the 3,000,000 shares purchased in the Public Offering. In the event that the Company is unable to complete its initial Business Combination within the required time frame, the non-redeemable 1,000,000 Sponsor sharestechnical consultation and services agreement, WFOE, as pledgee, will be entitled to certain rights, including the ~~liquidation rights described~~right to sell the pledged equity interests. This pledge will remain effective until all the guaranteed obligations are performed or the Yuanma Shareholders cease to be shareholders of Yuanma.

Equity Option Agreement.

Under the equity option agreement among WFOE, Yuanma and Yuanma Shareholders dated June 21, 2022, each of Yuanma Shareholders irrevocably granted to WFOE or its designee an option to purchase at any time, to the extent permitted under PRC law, all or a portion of his equity interests in Yuanma. Also, WFOE or its designee has the ~~“Business Combination” section. In October 2017,~~right to acquire any and all of its assets of Yuanma. Without WFOE’s prior written consent, Yuanma’s shareholders cannot transfer their equity interests in Yuanma and Yuanma cannot transfer its assets. The acquisition price for the ~~Company agreed to permit its Sponsor to redeem an additional 350,000~~shares or assets will be the minimum amount of consideration permitted under the PRC law at the time of the non-redeemable shares. As a result, the number of non-redeemable Sponsor shares was reduced to 650,000 (See Note 10). The Company initially had until July 29, 2017 to consummate its initial Business Combination. This date has now been extended to January 29, 2018 as described in Note 2 below. If the Company is unable to consummate its initial Business Combination within such time period, the Company will distribute the aggregate amount then on deposit in the Trust Account pro rata to its public shareholders by wayexercise of the ~~redemption of their shares~~option. This pledge will remain effective until all options have been exercised.

Voting Rights Proxy and ~~will cease all operations except for~~Financial Support Agreement.

Under the ~~purposes of winding up of~~voting rights proxy and financial support agreement among WFOE, Yuanma and Yuanma Shareholders dated June 21, 2022, each Yuanma Shareholder irrevocably appointed WFOE as its ~~affairs, as further described herein. In such event, the Company’s warrants will expire worthless. The Company expects the per share redemption price~~attorney-in-fact to ~~be $10.00 per common share, without taking into account any interest earned~~exercise on such ~~funds. However, the Company may not be able to distribute~~shareholder’s behalf any and all rights that such ~~amounts as a result~~shareholder has in respect of claims of creditors which may take priority over the claims of our public shareholders. In that case, it may be possible that the per-share value of the residual assets remaining available for distribution will be less than the price per Unithis equity interests in ~~the Public Offering.~~

Upon the closing of the Public Offering and the private placement, $50,000,000 was placed in a trust account (the “Trust Account”), with Continental Stock Transfer & Trust Company acting as trustee. A total of approximately $40.4 million remains in the Trust Account as of September 30, 2017 (See Note 7).

~~Going Concern and Liquidation~~

None of our Sponsor, stockholders, officers or directors, or third parties, are under any obligation to advance us funds, or to invest in us. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of our business plan, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all.

~~JM GLOBAL HOLDING COMPANY~~

~~NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS (unaudited)~~

~~September 30, 2017~~

~~1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS~~ ~~(continued)~~

~~Going Concern and Liquidation~~~~(continued)~~

Additionally, the Company has until January 29, 2018 (See Note 2) to complete its initial business combination. If the Company has not completed its initial business combination by that time, the Company will distribute the aggregate amount then on deposit in the Trust Account, pro rata, to our public shareholders by way of redemption and cease all operations except for purposes of the winding up of our affairs.

These conditions raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

~~Trust Account~~

An amount equal to 100% of the gross proceeds of the Public Offering received on July 29, 2015 is held in a Trust Account invested in U.S. government securities meeting the conditions of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), having a maturity of 180 days or less or any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the 1940 Act, as determined by the Company until the earlier of (i) the consummation of a Business Combination or (ii) the distribution of the Trust Account.

Other than the withdrawal of interest to pay taxes or for working capital, if any, none of the funds held in trust may be released until the earlier of: (i) the completion of the Business Combination; or (ii) the redemption of 100% of the outstanding public shares included in the units sold in the Public Offering if the Company is unable to complete the Business Combination within the required timeframe. On July 27, 2017, in connection with the Special Meeting (see Note 2), the Company and Continental entered into the Trust Amendment, pursuant to which the date on which to commence liquidation of the Trust Account established in connection with the Company’s initial Public Offering in the event the Company has not consummated a Business Combination was extended from July 29, 2017 to January 29, 2018.

~~Business Combination~~

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering and the private placement, although substantially all of the net proceeds of the Public Offering and the private placement are intended to be generally applied toward consummating a Business Combination. There is no assurance that the Company will be able to successfully effect a Business Combination.

~~JM GLOBAL HOLDING COMPANY~~

~~NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS (unaudited)~~

~~September 30, 2017~~

~~1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS~~ ~~(continued)~~

~~Business Combination~~~~(continued)~~

The Company, after signing a definitive agreement for the acquisition of one or more target businesses or assets, may decide to not submit the transaction for stockholder approval, unless otherwise required by law. The Company will proceed with a Business Combination if it is approved by the board of directors. In the event that the Company is required to seek stockholder approval in connection with its initial Business Combination, the Company will proceed with a Business Combination only if a majority of the aggregate outstanding shares that are voted in favor of the Business Combination. In connection with such a vote, the Company will provide its stockholders with the opportunity to redeem their shares of common stock upon the consummation of its initial Business Combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account,Yuanma, including any amounts representing interest earned on the Trust Account, less any interest released to the Company for working capital purposes or the payment of taxes, divided by the number of then outstanding shares of common stock that were sold as part of the Units in the Public Offering, which the Company refers to as its public shares, subject to the limitations described within the registration statement and any limitations (including but not limited to ~~cash requirements) agreed~~the power to ~~in connection with the negotiation~~vote on its behalf on all matters of terms of a proposed Business Combination. These shares of common stock, excluding the 1,000,000 non-redeemable shares of the 3,000,000 shares purchased in the Public Offering by the Sponsor, are recorded at a redemption value as of September 30, 2017 and December 31, 2016 and classified as temporary equity upon the completion of the Public Offering,Yuanma requiring shareholder approval in accordance with ~~ASC Topic 480 “Distinguishing Liabilities from Equity”.~~the articles of association of Yuanma. The ~~Company subsequently agreed~~proxy agreement is for a term of 20 years and can be extended by WFOE unilaterally by prior written notice to ~~permit its Sponsor to redeem an additional 350,000 of~~ the ~~1,000,000 non-redeemable shares. However, in no event will the Company redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001.~~

The Company has until January 29, 2018 (the “Combination Period”) to consummate its initial Business Combination. If the Company is unable to complete its initial Business Combination within the required timeframe the Company will (i) cease all operations except for the purposes of winding up of its affairs; (ii) distribute the aggregate amount then on deposit in the Trust Account, including a portion of the interest earned thereon which was not previously used for working capital, but net of any taxes,~~pro rata~~ to its public stockholders by way of redemption of its public shares (which redemption would completely extinguish such holders’ rights as stockholders, including the right to receive further liquidation distributions, if any); and (iii) as promptly as possible following such redemption, dissolve and liquidate the balance of its net assets to its remaining stockholders, as part of its plan of dissolution and liquidation; in the event of such distribution, it is possible that the per-share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per Unit in the Public Offering.

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) permits emerging growth companies to delay complying with new or revised financial accounting standards that do not yet apply to private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act). The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of its financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

~~JM GLOBAL HOLDING COMPANY~~

~~NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS (unaudited)~~

~~September 30, 2017~~

~~2. EXTENSION, TRUST AMENDMENT AND AGREEMENT FOR BUSINESS COMBINATION~~

~~Extension~~other parties.

On July 27, 2017, at the Special Meeting of Stockholders (the “Special Meeting”), the Company’s stockholders approved the following items: (i) an amendment (the “Extension Amendment”) to the Company’s Certificate of Incorporation to extend the date by which the Company has to consummate a Business Combination (the “Extension”) from July 29, 2017 to January 29, 2018 (the “Extended Date”); and (ii) an amendment (the “Trust Amendment”) to the investment management trust agreement, dated July 23, 2015, by and between the Company and Continental Stock Transfer & Trust Company (“Continental”), to extend the date on which to commence liquidating the Trust Account in the event the Company has not consummated a Business Combination to the Extended Date. The Company received 98.3% of the affirmative vote of the Company’s outstanding shares of common stock to approve the Extension Amendment and the Trust Amendment. The purpose of the Extension was to allow the Company more time to complete a Business Combination.

~~Trust Amendment~~

Following redemptions of 963,112 of the Company’s shares in connection with the Extension, a total of approximately $40.4 million remains in the Trust Account. On July 27, 2017, in connection with the Special Meeting, the Company and Continental entered into the Trust Amendment, pursuant to which the date on which to commence liquidation of the Trust Account established in connection with the Company’s initial Public Offering in the event the Company has not consummated a Business Combination was extended from July 29, 2017 to January 29, 2018.

~~Business combination~~

~~General Terms, Effects, and Consideration~~

~~On August 28, 2017,~~June 26, 2023, the Company entered into a ~~Share Exchange~~share purchase agreement with a buyer unaffiliated with the Company. Pursuant to the agreement, the Company agreed to sell and the buyer agreed to purchase all the issued and outstanding equity interest in TMSR HK. The purchase price for the transaction contemplated by the Agreement ~~with China Sunlong Environmental Technology, Inc.,~~was $100,000. TMSR HK has a ~~Cayman Islands company (“CaymanCo”),~~direct wholly-owned subsidiary, Makesi WFOE, and an indirect wholly-owned subsidiary, Yuanma. The sale of TMSR included the sale of Makesi WFOE and Yuanma. None of TMSR HK, Makesi WFOE or Yuanma had any assets, employees or operation. The sale of TMSR did not have any material impact on the Company’s consolidated financial statements.

Material terms of each of ~~CaymanCo’s shareholders (collectively,~~ the “Sellers”), the Company’s sponsor, Zhong Hui Holding Limited, in the capacity as the representative for the Company’s stockholders prior to the closing of the Business Combination (as defined below) (the “Purchaser Representative”),VIE agreements with Highlight Media are described below. The VIE agreements with Highlight Media were terminated and ~~Chuanliu Ni, in the capacity as the representative for the Sellers (the “Seller Representative”), pursuant to which, among other things and subject to the terms and conditions contained therein,~~ the Company ~~will effect an acquisition~~disposed Highlight Media as of CaymanCo, which primarily conducts its business through its indirect wholly-owned subsidiaries, Hubei Shengrong Environmental Protection Energy-Saving Science and Technology Co. Ltd. (“Hubei Shengrong”) and Tianjin Commodity Exchange Company Limited (“TJComex” and collectively with CaymanCo and its subsidiaries, the “Sunlong”) by acquiring from the Sellers all outstanding equity interests of CaymanCo (the “Business Combination”).September 26, 2023.

~~JM GLOBAL HOLDING COMPANY~~Technical Consultation and Services Agreement.

~~NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS (unaudited)~~

~~September 30, 2017~~

~~2. EXTENSION, TRUST AMENDMENT AND AGREEMENT FOR BUSINESS COMBINATION~~ ~~(continued)~~

~~Business combination~~ ~~(continued)~~

Pursuant to the ~~Share Exchange Agreement, in exchange for~~technical consultation and services agreement between Highlight Media and Makesi WFOE dated September 16, 2022, Makesi WFOE has the exclusive right to provide consultation services to Highlight Media relating to Highlight Media’s business, including but not limited to business consultation services, human resources development, and business development. Makesi WFOE exclusively owns any intellectual property rights arising from the performance of this agreement. Makesi WFOE has the right to determine the service fees based on Highlight Media’s actual operation on a quarterly basis. This agreement will be effective as long as Highlight Media exists. Makesi WFOE may terminate this agreement at any time by giving a 30 days’ prior written notice to Highlight Media.

Equity Pledge Agreement.

Under the equity pledge agreement among Makesi WFOE, Highlight Media and the shareholders of Highlight Media dated September 16, 2022, the shareholders of Highlight Media pledged all of their equity interests in Highlight Media to Makesi WFOE to guarantee Highlight Media’s performance of relevant obligations and indebtedness under the ~~outstanding shares~~technical consultation and services agreement. In addition, the shareholders of ~~Sunlong,~~Highlight Media will complete the Company will issue a number of shares of our common stock (the “Exchange Shares”) at $10.00 per share based on an adjusted equity valuation of CaymanCo (the “Adjusted Equity Value”) determined by starting with a base valuation of $92.0 million, deducting the amount of indebtedness (net of cash) of Sunlong asregistration of the closing, deducting the amount of unpaid transaction expenses incurred by Sunlong, and increasing (or decreasing if negative) such valuation to the extent that the net working capital (excluding indebtedness, cash and transaction expenses) of Sunlong as of the closing is greater than $26.55 million.. Ten percent (10%) of the Exchange Shares (“Escrow Shares”) will be deposited in escrow at the closing of the Business Combination (which is also referred to herein as the closing) and subject to forfeiture back to us (along with dividends and other earnings otherwise payable with respect to such Escrow Shares) in the event that the Purchaser Representative successfully brings an indemnification claimequity pledge under the Exchange Agreement on behalf of our shareholders. The Exchange Shares, including the Escrow Shares, will be allocated among the Sellers pro-rata based on each Seller’s ownership of CaymanCo prior to the Business Combination. The Exchange Shares will be subject to a lock-up as set forth in the Lock-Up Agreement as described elsewhere in the preliminary proxy statement filedagreement with the ~~Securities~~competent local authority. If Highlight Media breaches its obligation under the technical consultation and ~~Exchange Commission on October 11, 2017.~~

The Escrow Shares will be held in an escrow account maintained by a mutually agreed escrow agent (the “Escrow Agent”). While the Escrow Shares are held in escrow, any dividends and other distributions otherwise payable with respect to the Escrow Shares will be held back by JM Global and not paid until the Escrow Shares are released from escrow to the Sellers, but the Sellersservices agreement, Makesi WFOE, as pledgee, will be entitled to ~~vote~~certain rights, including the ~~Escrow Shares.~~right to sell the pledged equity interests. This pledge will remain effective until all the guaranteed obligations are performed or the shareholders of Highlight Media cease to be shareholders of Highlight Media.

Equity Option Agreement.

Under the equity option agreement among Makesi WFOE, Highlight Media and the shareholders of Highlight Media dated September 16, 2022, each of the shareholders of Highlight Media irrevocably granted to Makesi WFOE or its designee an option to purchase at any time, to the extent permitted under PRC law, all or a portion of his equity interests in Highlight Media. Also, Makesi WFOE or its designee has the right to acquire any and all of its assets of Highlight Media. Without Makesi WFOE’s prior written consent, Highlight Media’s shareholders cannot transfer their equity interests in Highlight Media and Highlight Media cannot transfer its assets. The ~~Business Combination~~acquisition price for the shares or assets will be ~~accounted for~~the minimum amount of consideration permitted under the PRC law at the time of the exercise of the option. This pledge will remain effective until all options have been exercised.

Voting Rights Proxy and Financial Support Agreement.

Under the voting rights proxy and financial support agreement among Makesi WFOE, Highlight Media and the shareholders of Highlight Media dated September 16, 2022, each Highlight Media Shareholder irrevocably appointed Makesi WFOE as ~~a “reverse merger”~~its attorney-in-fact to exercise on such shareholder’s behalf any and all rights that such shareholder has in respect of his equity interests in Highlight Media, including but not limited to the power to vote on its behalf on all matters of Highlight Media requiring shareholder approval in accordance with ~~accounting principles generally accepted in~~ the ~~U.S. Under this method~~articles of ~~accounting, the Company will~~association of Highlight Media. The proxy agreement is for a term of 20 years and can be treated as the “acquired” company for financial reporting purposes. This determination was primarily based on Sunlong comprising ongoing operations of the combined company, Sunlong’s senior management comprising the senior management of the combined company, and Sunlong stockholders having a majority of the voting power of the combined company. For accounting purposes, Sunlong will be deemed to be the accounting acquirer in the transaction and, consequently, the transaction will be treated as a recapitalization of Sunlong (i.e., a capital transaction involving the issuance of stockextended by the Company for the stock of Sunlong). Accordingly, the consolidated assets, liabilities and results of operations of Sunlong will become the historical financial statements of the combined company, and the Company’s assets, liabilities and results of operations will be consolidated with Sunlong beginning on the acquisition date.

~~Representations and Warranties~~

~~The Share Exchange Agreement contains a number of representations and warranties made~~Makesi WFOE unilaterally by the Company, on the one hand, and Sunlong, on the other hand, made for the benefit of the other, which in certain cases are subject to specified exceptions and qualifications contained in the Share Exchange Agreement or in information provided pursuant to certain disclosure schedules to the Share Exchange Agreement. The representations and warranties are customary for transactions similar to the Business Combination. Each representation, warranty, covenant, undertaking and agreement contained in the Share Exchange Agreement will expire as of, and will not survive, the consummation of the Business Combination.

~~Conditions to Closing~~

On February 27, 2023, Highlight WFOE entered into a series of assignment agreements with ~~respect~~Makesi WFOE, Highlight Media and Highlight Shareholders, pursuant to ~~CaymanCo,~~which Makesi WFOE assign all its ~~subsidiaries) since~~rights and obligations under the VIE agreements to Highlight WFOE. The VIE agreements and the assignment agreements grant Highlight WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Highlight Media, including absolute rights to control the management, operations, assets, property and revenue of Highlight Media. The assignment does not have any impact on Company’s consolidated financial statements.

On September 26, 2023, Highlight WFOE entered into a termination agreement with Highlight Media and the shareholders of Highlight Media to terminate the VIE Agreements and sold the interest in the VIE Agreements for a purchase price of $100,000. As a result of such termination, the Company no longer treats Highlight Media as a consolidated affiliated entity or consolidates the financial results and balance sheet of Highlight Media in the Company’s consolidated financial statements under U.S. GAAP.

As of the date of the Share Exchange Agreement (v) the approval by the Company’s shareholders of the election of certain directors to serve as directors on its board of directors, (vi) that upon the closing, and after giving effect to the redemptions,this report, the Company ~~has at least $5,000,001~~primary operations are focused on the Highlight Media business that is in ~~net tangible assets (excluding~~enterprise brand management service in China, and on the ~~assets~~AI Catalysis business that is in the livestreaming market with focus on e-commerce and ~~liabilities~~livestreaming interactive game in the United States. All Wuge digital door signs business have been disposed.

Note 2 – Summary of ~~Sunlong), and (vii) that the net working capital of Sunlong shall be at least $22,000,000.~~significant accounting policies

~~JM GLOBAL HOLDING COMPANY~~

~~NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS (unaudited)~~

~~September 30, 2017~~

~~2. EXTENSION, TRUST AMENDMENT AND AGREEMENT FOR BUSINESS COMBINATION~~ ~~(continued)~~

~~Termination~~

The Share Exchange Agreement may be terminated under certain customary and limited circumstances at any time prior to closing, including by either party if the transactions contemplated by the Share Exchange Agreement have not been completed by January 29, 2018; provided that the party seeking to terminate shall not have breached in any material respect its obligations in any manner that has proximately caused the failure to consummate the Business Combination. If the Share Exchange Agreement is terminated, all further obligations of the parties under the Share Exchange Agreement will terminate and will be of no further force and effect (except that certain obligations related to public announcements, confidentiality, termination and termination fees, waiver against trust, and certain general provisions will continue in effect), and neither the Company nor Sunlong will have any further liability to any other party thereto except for liability for liability for any fraud claims or willful breach of the Merger Agreement prior to such termination. In the event that JM Global terminates the Share Exchange Agreement for a breach by CaymanCo or the Sellers, CaymanCo will be required to pay to JM Global as liquidated damages a termination fee equal to $500,000, plus transaction expenses incurred by JM Global and its affiliates, provided that CaymanCo and the Sellers will not be relieved of liability for any fraud claims or willful breach of the Share Exchange Agreement prior to such termination.

~~Other Agreements~~

The Business Combination also calls for additional agreements, including, among others, the Escrow Agreement, the Non-competition Agreements, the Lock-Up Agreements, and the Registration Rights Agreement, as described elsewhere in the preliminary proxy statement filed with the Securities and Exchange Commission on October 11, 2017.

~~3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~

Basis of presentation

The accompanying ~~unaudited interim~~consolidated financial statements ~~are presented~~have been prepared in ~~U.S. dollars in conformity~~accordance with accounting principles generally accepted in the United States of America ~~(‘‘GAAP’’~~(“U.S. GAAP”) for ~~interim~~ information and in accordance with the instructions to Form 10-Q and Article 8 and Article 10 of Regulation S-X. Accordingly, since they are interim statements, the accompanying financial statements do not include all of the information and notes required by GAAP for a complete financial statement presentation. These financial statements should be read in conjunction with the Company’s annual Form 10-K filing. In the opinion of management, the interim financial statements reflect all adjustments (consisting of normal, recurring adjustments) that are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. Interim results are not necessarily indicative of results for a full year and pursuant to the rules and regulations of the ~~SEC.~~Securities Exchange Commission (“SEC”).

~~Net loss per common share~~Principles of consolidation

The ~~Company complies with accounting and disclosure requirements~~unaudited condensed financial statements of FASB ASC Topic 260, “Earnings Per Share.” Net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding for the period. At September 30, 2017, the Company ~~did not have any dilutive securities~~include the accounts of GDC and ~~other contracts that could, potentially, be exercised or converted into common stock~~its wholly owned subsidiaries and ~~then share in the earnings of the Company. As a result, diluted loss per common share is the same as basic loss per common share for the periods presented.~~

~~JM GLOBAL HOLDING COMPANY~~

~~NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS (unaudited)~~

~~September 30, 2017~~VIE. All intercompany transactions and balances are eliminated upon consolidation.

~~3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~ ~~(continued)~~

~~Concentration of credit risk~~

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times may exceed the Federal Depository Insurance Corporation coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

~~Fair value of financial instruments~~

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature.

Use of estimates and assumptions

The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and ~~disclosure~~disclosures of contingent assets and liabilities atas of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the ~~reporting period.~~periods presented. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include the useful lives of intangible assets, deferred revenues and plant and equipment, impairment of long-lived assets, collectability of receivables, present value and lease liabilities. Actual results could differ from ~~those~~these estimates.

~~Income taxes~~Foreign currency translation and transaction

The reporting currency of the Company is the U.S. dollar. The Company in China conducts its businesses in the local currency, Renminbi (RMB), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period. The statement of income accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Translation adjustments included in accumulated other comprehensive income amounted to $71,468 and $179,460 as of September 30, 2023 and December 31, 2022, respectively. The balance sheet amounts, with the exception of shareholders’ equity at September 30, 2023 and December 31, 2022 were translated at 7.30 RMB and 6.38 RMB to $1.00, respectively. The shareholders’ equity accounts were stated at their historical rate. The average translation rates applied to statement of income accounts for the nine months ended September 30, 2023 and 2022 were 7.03 RMB and 6.61 RMB, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet.

The PRC government imposes significant exchange restrictions on fund transfers out of the PRC that are not related to business operations. These restrictions have not had a material impact on the Company because it has not engaged in any significant transactions that are subject to the restrictions.

Accounts receivable, net

Accounts receivable include trade accounts due from customers. An allowance for doubtful accounts may be established and recorded based on management’s assessment of potential losses based on the credit history and relationships with the customers. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable.

Prepayments

Prepayments are funds deposited or advanced to outside vendors for future inventory or services purchases. As a standard practice in China, many of the Company’s vendors require a certain amount to be deposited with them as a guarantee that the Company will complete its purchases on a timely basis. This amount is refundable and bears no interest. The Company has legally binding contracts with its vendors, which require any outstanding prepayments to be returned to the Company when the contract ends.

Plant and equipment

Plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method after consideration of the estimated useful lives of the assets and estimated residual value. The estimated useful lives and residual value are as follows:

		Useful Life				Estimated Residual Value
Office equipment and furnishing			5 years				5	%

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives.

Intangible assets

Intangible assets represent software, and it is stated at cost, less accumulated amortization. Research and development costs associated with internally developed patents are expensed when incurred. Amortization expense is recognized on the straight-line basis over the estimated useful lives of the assets. The software has finite useful lives and is amortized using a straight-line method that reflects the estimated pattern in which the economic benefits of the intangible asset are to be consumed. The Company amortizes the cost of software, over their useful life using the straight-line method. The Company also re-evaluates the periods of amortization to determine whether subsequent events and circumstances revised estimates of useful lives. The estimated useful life is as follows:

		Useful Life
Software		5 years

Lease

The Company ~~complies with~~determines if an arrangement is a lease at inception. Leases that transfer substantially all of the ~~accounting~~benefits and ~~reporting requirements~~risks incidental to the ownership of ~~FASB ASC Topic 740, “Income Taxes”, which requires~~assets are accounted for as finance leases as if there was an acquisition of an asset and ~~liability~~incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases. The Company has no significant finance leases.

The Company recognizes lease liabilities and corresponding right-of-use assets on the balance sheet for leases. Operating lease right- of-use assets are included in non-current prepayments, receivables and other assets and operating lease liabilities are included in current accrued expenses, accounts payable and other liabilities and other non-current liabilities on the consolidated balance sheets. Operating lease right-of-use assets and operating lease liabilities are initially recognized based on the present value of future lease payments at lease commencement. The operating lease right-of-use asset also includes any lease payments made prior to lease commencement and the initial direct costs incurred by the lessee and is recorded net of any lease incentives received. As the interest rates implicit in most of the leases are not readily determinable, the Company uses the incremental borrowing rates based on the information available at lease commencement to determine the present value of the future lease payments. Operating lease expenses are recognized on a straight-line basis over the term of the lease.

Goodwill

Goodwill represents the excess of the consideration paid of an acquisition over the fair value of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill is not amortized and is tested for impairment at least annually, more often when circumstances indicate impairment may have occurred. Goodwill is carried at cost less accumulated impairment losses. In accordance with ASC 350, the Company may first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. In the qualitative assessment, the Company considers factors such as macroeconomic conditions, industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations, business plans and strategies of the reporting unit, including consideration of the impact of the COVID-19 pandemic. Based on the qualitative assessment, if it is more likely than not that the fair value of a reporting unit is less than the carrying amount, the quantitative impairment test is performed. The Company may also bypass the qualitative assessment and proceed directly to perform the quantitative impairment test. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. If the carrying amount of a reporting unit exceeds its fair value, the amount by which the carrying amount exceeds the reporting unit’s fair value is recognized as impairment. Application of a goodwill impairment test requires significant management judgment, including the identification of reporting units, allocation of assets, liabilities and goodwill to reporting units, and determination of the fair value of each reporting unit.

Impairment for long-lived assets

Long-lived assets, including plant, equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values.

Fair value measurement

The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash, notes receivable, accounts receivable, other receivables, prepayments, accounts payable, other payables and accrued liabilities, customer deposits and taxes payable to approximate their fair values because of their short term nature.

The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and ~~reporting~~enhance disclosure requirements for fair value measures. The three levels are defined as follow:

●

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

●

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

●

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest.

Customer deposits

Highlight Media typically receives customer deposits for services to be rendered from its customers. As Highlight Media delivers the services, it will recognize these deposits to results of operations in accordance to its revenue recognition policy.

Revenue recognition

On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (ASC 606) using the modified retrospective method for contracts that were not completed as of January 1, 2018. This did not result in an adjustment to retained earnings upon adoption of this new guidance as the Company’s revenue, other than retainage revenues, was recognized based on the amount of consideration we expect to receive in exchange for satisfying the performance obligations. However, the impact of the Company’s retainage revenue was not material as of the date of adoption, and as a result, did not result in an adjustment.

The core principle underlying the revenue recognition ASU is that the Company will recognize revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Company’s revenue streams are primarily recognized at a point in time.

The ASU requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The application of the five-step model to the revenue streams compared to the prior guidance did not result in significant changes in the way the Company records its revenue. Upon adoption, the Company evaluated its revenue recognition policy for all revenue streams within the scope of the ASU under previous standards and using the five-step model under the new guidance and confirmed that there were no differences in the pattern of revenue recognition except its retainage revenues.

An entity will also be required to determine if it controls the goods or services prior to the transfer to the customer in order to determine if it should account for the arrangement as a principal or agent. Principal arrangements, where the entity controls the goods or services provided, will result in the recognition of the gross amount of consideration expected in the exchange. Agent arrangements, where the entity simply arranges but does not control the goods or services being transferred to the customer, will result in the recognition of the net amount the entity is entitled to retain in the exchange.

The company, as a principal, provides services to clients under separate contracts, generating revenue. The pricing terms specified in the contracts are fixed. An obligation to perform is identified in contracts with clients. Revenue is recognized over the period in which the services are earned.

Payments received prior to the relevant criteria for revenue recognition are met, are recorded as customer deposits.

The Company’s disaggregate revenue streams from continuing operations are summarized as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2023		2022		2023		2022

Software copyright	$	-	$	-	$	150,000	$	-
Total revenues	$	-	$	-	$	150,000	$	-

Income taxes

The Company accounts for income taxes in accordance with U.S. GAAP for income taxes. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred ~~income tax assets~~taxes is accounted for using the asset and ~~liabilities are computed for~~liability method in respect of temporary differences arising from differences between the ~~financial statement and tax bases~~carrying amount of assets and liabilities ~~that will result~~ in ~~future~~the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable ~~or deductible amounts, based on enacted~~temporary differences. Deferred tax ~~laws and rates applicable~~assets are recognized to the ~~periods in~~extent that it is probable that taxable profit will be available against which ~~the~~deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to ~~affect taxable income. Valuation allowances~~apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are ~~established,~~reduced by a valuation allowance when, ~~necessary, to reduce~~in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets towill not be realized. Current income taxes are provided for in accordance with the ~~amount expected to be realized.~~laws of the relevant taxing authorities.

~~FASB ASC Topic 740 prescribes~~An uncertain tax position is recognized as a ~~recognition threshold and a measurement attribute for~~benefit only if it is “more likely than not” that the ~~financial statement recognition and measurement of~~ tax ~~positions taken or expected to~~position would be ~~taken~~sustained in a tax ~~return. For those benefits to be recognized,~~examination, with a tax ~~position must be more-likely-than-not~~examination being presumed to ~~be sustained upon examination by taxing authorities.~~occur. The ~~Company recognizes accrued~~amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest ~~and penalties~~incurred related to ~~unrecognized~~underpayment of income tax ~~benefits~~are classified as income tax ~~expense. There were~~expense in the period incurred. The Company incurred no ~~unrecognized tax benefits as~~such penalties and interest for the three months ended September 30, 2023 and 2022. As of September 30, ~~2017. No amounts~~2023, the Company’s PRC tax returns filed for 2020, 2021 and 2022 remain subject to examination by any applicable tax authorities.

Earnings per share

Basic earnings per share are computed by dividing income available to common shareholders of the Company by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common shares were ~~accrued~~exercised and converted into common shares. 9,079,348 and 10,500,000 of outstanding warrants which is equivalent to convertible of 4,539,674 and 5,250,000 common shares were excluded from the diluted earnings per share calculation due to its antidilutive effect for the ~~payment of interest and penalties at~~three months ended September 30, ~~2017.~~2023 and 2022, respectively. 824,000 of outstanding options were excluded from the diluted earnings per share calculation due to its antidilutive effect for the three months ended September 30, 2023 and 2022.

Reclassification

Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings (loss) or and financial position.

Recently accounting pronouncements

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08), which clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. The new amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The amendments should be applied prospectively to business combinations occurring on or after the effective date of the amendments, with early adoption permitted. The Company is currently ~~not aware~~evaluating the impact of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.the new guidance on the consolidated financial statements.

In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”, which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The ~~Company may be~~amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. This guidance also requires certain disclosures for equity securities subject to ~~potential examination by U.S. federal, U.S. states or foreign jurisdiction authorities~~contractual sale restrictions. The new guidance is required to be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the ~~areas~~date of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with U.S. federal, U.S. state and foreign tax laws.adoption. This guidance is effective for fiscal years beginning after 15 December 2023, including interim periods within those fiscal years. Early adoption is permitted. The ~~Company’s management~~Company does not expect that the ~~total amount~~adoption of ~~unrecognized tax benefits~~this guidance will ~~materially change over~~have a material impact on the ~~next twelve months.~~financial position, results of operations and cash flows.

~~JM GLOBAL HOLDING COMPANY~~

~~NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS (unaudited)~~

~~September 30, 2017~~

~~3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~ ~~(continued)~~

~~Cash~~In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”, which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. This guidance also requires certain disclosures for equity securities subject to contractual sale restrictions. The new guidance is required to be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption. This guidance is effective for the Company for the year ending March 31, 2025 and interim reporting periods during the year ending March 31, 2025. Early adoption is permitted. The Company does not expect that the adoption of this guidance will have a material impact on the financial position, results of operations and cash ~~equivalents~~flows.

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2017 and December 31, 2016.

~~Cash and securities held in Trust Account~~

~~At September 30, 2017 and December 31, 2016, substantially all of the assets held in the Trust Account were held in U.S. Treasury Bills.~~

~~Accrued expenses and due to affiliate~~

Accrued expenses represent amounts the Company owes to its vendors for services that have been provided but not paid for, state franchise tax as well as an affiliate of the Sunlong advanced to the Company for paying the Company’s working capital. These advances are non-interest bearing, unsecured and payable on demand. At September 30, 2017 and December 31, 2016 there was approximately $214,000 and $83,000, respectively, accrued for state franchise tax and third party advance in the Company’s accrued expenses.

~~Due to affiliate represents entity costs and offering costs paid by an affiliate on behalf of the Company. These advances are non-interest bearing, unsecured and payable on demand.~~

~~Redeemable common stock~~

As discussed in Note 5, 4,000,000 of the 5,000,000 shares of common stock sold as part of the units in the Public Offering contain a redemption feature which allows for the redemption of common stock under the Company’s liquidation or tender offer/stockholder approval provisions. In accordance with ASC 480, redemption provisions not solely within the control of the Company require the security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of ASC 480. Although the Company did not specify a maximum redemption threshold, its charter provides that in no event will it redeem its Public Shares in an amount that would cause its net tangible assets (stockholders’ equity) to be less than $5,000,001. As described in Note 2, in connection with the Extension, 963,112 of the Company’s outstanding shares of common stock were redeemed in July, 2017. Accordingly, at September 30, 2017 and December 31, 2016, 3,036,888 and 4,000,000 Public Shares were classified outside of permanent equity at its redemption value, respectively. In addition to the 4,000,000 common stock with a redemption feature, the Company subsequently agreed to permit its Sponsor to redeem an additional 350,000 of the non-redeemable shares. As a result, the Company has a total of 3,386,888 shares of redeemable common stock as of the date of this report.

~~Recently issued accounting standards~~

~~Management~~ does not believe ~~that any~~other recently issued but not yet effective accounting ~~pronouncements,~~standards, if currently adopted, would have a material effect on the Company’s ~~interim~~unaudited condensed consolidated balance sheets, statements of income and comprehensive income and statements of cash flows.

Note 3 – Business combination and restructuring

Highlight Media

On September 16, 2022, the Company entered into a share purchase agreement with Highlight Media and all the shareholders of Highlight Media (“Highlight Media Shareholders”). Pursuant to the share purchase agreement, the Company agreed to issue an aggregate of 9,000,000 shares of the Company’s common stock to the Highlight Media Shareholders, in exchange for Highlight Media Shareholders’ agreement to enter into, and their agreement to cause Highlight Media to enter into, certain VIE agreements (“VIE Agreements”) with Makesi WFOE the Company’s indirectly owned subsidiary, through which Makesi WFOE shall have the right to control, manage and operate Highlight Media in return for a service fee equal to 100% of Highlight Media’s net income (the “Acquisition”). On September 16, 2022, Makesi WFOE entered into a series of VIE Agreements with Highlight Media and the Highlight Media Shareholders. The VIE Agreements are designed to provide Makesi WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Highlight Media, including absolute rights to control the management, operations, assets, property and revenue of Highlight Media. Highlight Media, founded in 2016, is an integrated marketing service agency, focusing on enterprise brand management, crisis public relations, intelligent public opinion monitoring, media PR, financial and economic we-media operation, digital face application, large-scale exhibition services and other businesses. It is committed to becoming a modern science and technology media organization that fully empowers the development of customer enterprises in the era of artificial intelligence and big data. The Acquisition closed on September 29, 2022.

On February 27, 2023, Highlight WFOE entered into a series of assignment agreements (the “Assignment Agreements”) with Makesi WFOE, Highlight Media and Highlight Shareholders, pursuant to which Makesi WFOE assign all its rights and obligations under the VIE Agreements to Highlight WFOE (the “Assignment”). The VIE Agreements and the Assignment Agreements grant Highlight WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Highlight Media, including absolute rights to control the management, operations, assets, property and revenue of Highlight Media. The Assignment does not have any impact on Company’s consolidated financial statements.

The Company’s acquisition of Highlight Media was accounted for as a business combination in accordance with ASC 805. The Company has allocated the purchase price of Highlight Media based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. Other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed, plant and equipment, and intangible assets identified as of the acquisition date and considered a number of factors including valuations from independent appraisers. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in general and administrative expenses.

The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase price allocation at the date of the acquisition of Highlight Media based on a valuation performed by an independent valuation firm engaged by the Company:

Total consideration at fair value

2,250,000

	Fair Value
Cash	$	47,498
Other current assets		107,828
Plant and equipment		1,205
Other noncurrent assets		-
Goodwill		2,121,947
Total asset		2,278,478
Accounts payable		14,170
Taxes Payable		363
Other Payable		13,945
Total liabilities		28,478
Net asset acquired	$	2,250,000

Approximately $2.1 million of goodwill arising from the acquisition consists largely of synergies expected from combining the operations of the Company and Highlight Media. None of the goodwill is expected to be deductible for income tax purposes.

Note 4 – Variable interest entity

Wuge

On January 3, 2020, Tongrong WFOE entered into contractual arrangements with Wuge and its shareholders. The significant terms of these contractual arrangements are summarized in “Note 1 - Nature of business and organization” above. As a result, the Company classified Wuge as VIE.

On September 28, 2022, Makesi WFOE entered into a termination agreement with Wuge and the shareholders of Wuge to terminate the VIE agreements and to cancel the shares previously issued to the shareholders of Wuge, based on the average closing price of $0.237 per share of the Company during the 30 trading days immediately prior to the date of the termination agreement. As a result of such termination, the Company no longer treats Wuge as a consolidated affiliated entity or consolidates the financial results and balance sheet of Wuge in the Company’s consolidated financial statements under U.S. GAAP.

Yuanma

On June 21, 2022, Makesi WFOE entered into a series of contractual arrangements with Yuanma and its shareholders. The significant terms of these contractual arrangements are summarized in “Note 1 - Nature of business and organization” above. As a result, the Company classified Yuanma as VIE.

On June 26, 2023, GDC entered into a share purchase agreement with a buyer unaffiliated with the Company. Pursuant to the agreement, the Company agreed to sell and the buyer agreed to purchase all the issued and outstanding equity interest in TMSR HK. The purchase price for the transaction contemplated by the Agreement was $100,000. The sale of TMSR HK included the sale of Makesi WFOE and Yuanma. None of TMSR HK, Makesi WFOE or Yuanma had any assets, employees or operation. The sale of TMSR HK did not have any material impact on the Company’s consolidated financial statements.

Highlight Media

On September 16, 2022, Makesi WFOE entered into contractual arrangements with Highlight Media and its shareholders. The significant terms of these contractual arrangements are summarized in “Note 1 - Nature of business and organization” above. As a result, the Company classifies Highlight Media as VIE.

On February 27, 2023, Highlight WFOE entered into a series of assignment agreements with Makesi WFOE, Highlight Media and Highlight Shareholders, pursuant to which Makesi WFOE assign all its rights and obligations under the VIE agreements to Highlight WFOE. The VIE agreements and the assignment agreements granted Highlight WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Highlight Media, including absolute rights to control the management, operations, assets, property and revenue of Highlight Media. The assignment did not have any impact on Company’s consolidated financial statements.

A VIE is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. Makesi WFOE is deemed to have a controlling financial interest and be the primary beneficiary of Highlight Media because it has both of the following characteristics:

(1)

The power to direct activities at Highlight Media that most significantly impact such entity’s economic performance, and

(2)

The obligation to absorb losses of, and the right to receive benefits from Highlight Media that could potentially be significant to such entity.

Accordingly, the accounts of Highlight Media are consolidated in the accompanying financial statements pursuant to ASC 810-10, Consolidation. In addition, its financial positions and results of operations are included in the Company’s consolidated financial statements prior to September 30, 2023.

On September 26, 2023, Highlight WFOE entered into a termination agreement with Highlight Media and the shareholders of Highlight Media to terminate the VIE Agreements and sell the interest in the VIE Agreements for a purchase price of $100,000. As a result of such termination, the Company no longer treats Highlight Media as a consolidated affiliated entity or consolidates the financial results and balance sheet of Highlight Media in the Company’s consolidated financial statements under U.S. GAAP.

The carrying amount of the VIE’s assets and liabilities are as follows:

	September 30,		December 31,
	2023		2022
Cash and cash equivalents		-		215,880
Accounts receivable, net		-		194,520
Other receivables, net		-		78,293
Prepayments		-		-
Total current assets	$	-	$	488,693
Plants and equipment		-		502
Goodwill		-		2,190,485
Total assets		-		2,679,680
Current liabilities		-		333,784
Non-current liabilities		-		-
Total liabilities		-		333,784
Net assets	$	-	$	2,345,896

Accounts payable	$	-	$	116,105
Other payables and accrued liabilities		-		13,469
Other payables – related party		-		-
Tax payables		-		195,732
Customer Advances		-		8,478
Wages payable		-		-
Total current liabilities		-		333,784
Lease liabilities – non-current		-		-
Total liabilities	$	-	$	333,784

The summarized operating results of the VIE’s are as follows:

	12		For the Nine Months Ended September 30,
			2023
Operating revenues		$	-
Gross profit			-
Income from operations			-
Net loss		$	-

The balance of $100,000 on September 30, 2023 is the consideration required to be received upon disposal of Highlight Media.

The balance of $948,000 on December 31, 2022 is the consideration required to be received upon disposal of Wuge, the shares that have cancelled their corresponding value on March 9, 2023.

Depreciation expense for the nine months ended September 30, 2023 and 2022 amounted to $751 and $33,192, respectively.

Amortization expense for the nine months ended September 30, 2023 and 2022 amounted to $162,500 and $98, respectively.

The changes in the carrying amount of goodwill by business units are as follows:

The above balances represent travel advances to the Chief Executive Officer of the Company.

The above payables represent interest free loans and advances. These loans and advances are unsecured and due on demand.

As of September 30, 2023, the Company subscribed to a total of $2,500,000 in convertible notes of Liquid Marketplace Corp and DigiTrax Entertainment Inc.

Leases are classified as operating leases or finance leases in accordance with ASC 842. The Company’s operating leases mainly related to the rights to use building and office facilities. For leases with terms greater than 12 months, the Company records the related asset and liability at the present value of lease payments over the term. Certain leases include rental escalation clauses, renewal options and/or termination options, which are factored into the Company’s determination of lease payments when appropriate.

The balances for the operating leases where the Group is the lessee are presented as follows within the consolidated balance sheets:

Future lease payments under operating leases as of September 30, 2023 were as follows:

GDC was organized in the state of Delaware in April 2015 and the nine months ended September 30, 2023 amounted to nil. As of September 30, 2023, GDC’s net operating loss carry forward for United States income taxes was approximately $0. The net operating loss carry forwards are available to reduce future years’ taxable income through year 2038. Management believes that the realization of the benefits from these losses appears uncertain due to the Company’s operating history and continued losses in the United States. Accordingly, the Company has provided a 100% valuation allowance on the deferred tax asset to reduce the asset to zero. Management reviews this valuation allowance periodically and makes changes accordingly.

On December 22, 2017, the “Tax Cuts and Jobs Act” (“The 2017 Tax Act”) was enacted in the United States. Under the provisions of the Act, the U.S. corporate tax rate decreased from 34% to 21%. The 2017 Tax Act imposed a global intangible low-taxed income tax (“GILTI”), which is a new tax on certain off-shore earnings at an effective rate of 10.5% for tax years beginning after December 31, 2017 (increasing to 13.125% for tax years beginning after December 31, 2025) with a partial offset for foreign tax credits. The Company determined that there is no impact of GILTI for the nine months ended September 30, 2023 and 2022, which the Company believes that it will be imposed a minimum tax rate of 10.5% and to the extent foreign tax credits are available to reduce its US corporate tax, which may result in no additional US federal income tax being due.

China Sunlong is incorporated in the Cayman Islands and are not subject to tax on income or capital gains under current Cayman Islands law. In addition, upon payments of dividends by China Sunlong to its shareholders, no Cayman Islands withholding tax will be imposed.

Citi Profit BVI is incorporated in the British Virgin Islands and are not subject to tax on income or capital gains under current British Virgin Islands law. In addition, upon payments of dividends by these entities to their shareholders, no British Virgin Islands withholding tax will be imposed.

TMSR HK and Highlight HK are incorporated in Hong Kong and are subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax law, TMSR HK is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends.

Makesi WFOE, Highlight WFOE, Highlight Media and SH Xianzhui are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the “EIT Laws”), Chinese enterprises are subject to income tax at a rate of 25% after appropriate tax adjustments.

Bad debt allowances must be approved by the Chinese tax authority prior to being deducted as an expense item on the tax return. Significant components of deferred tax assets were as follows:

Enterprises or individuals who sell commodities, engage in repair and maintenance or import and export goods in the PRC are subject to a value added tax in accordance with PRC laws. The value added tax (“VAT”) standard rates are 6% to 17% of the gross sales price and changed to 6% to 16% of gross sales starting in May 2018. The VAT standard rates changed to 6% to 13% of the gross sales prices starting in April 2019. A credit is available whereby VAT paid on the purchases of semi-finished products or raw materials used in the production of the Company’s finished products can be used to offset the VAT due on sales of the finished products and services.

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and accounts receivable. As of September 30, 2023 and December 31, 2022, $1,143,611 and $215,880 and were deposited with various financial institutions located in the PRC, respectively. As of September 30, 2023 and December 31, 2022, $503,537 and $173,228 were deposited with one financial institution located in the U.S., respectively. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness.

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

The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by Highlight WFOE only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the accompanying unaudited condensed consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of Highlight WFOE.

Highlight WFOE and Highlight Media are required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, Highlight WFOE may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion fund and staff bonus and welfare fund at its discretion. Highlight Media may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by State Administration of Foreign Exchange.

As a result of the foregoing restrictions, Highlight WFOE and Highlight Media are restricted in their ability to transfer their net assets to the Company. Foreign exchange and other regulation in the PRC may further restrict Highlight WFOE and Highlight Media from transferring funds to Highlight HK in the form of dividends, loans and advances. As of September 30, 2023 and December 31, 2022, amounts restricted are the net assets of Highlight WFOE and Highlight Media which amounted to nil and $492,315, respectively.

On May 4, 2023, the Company sold an aggregate of 310,168 shares of common stock of the Company, par value $0.0001 per share, and pre-funded warrants to purchase up to an aggregate of 844,351 shares of common stock are sold to certain purchasers, pursuant to a securities purchase agreement, dated May 1, 2023, as amended on May 16, 2023. The purchase price of each share of common stock is $8.35. The purchase price of each pre-funded warrant is $8.349, which equals the price per share of common stock being sold to the public in this offering, minus $0.001. The RD Offering is being made pursuant to a shelf registration statement (No. 333-254366) on Form S-3, which was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on March 26, 2021, and related prospectus supplement.

In the concurrent PIPE offering, the Company sold warrants to purchase up to 1,154,519 shares of common stock to the Purchasers, pursuant to a private warrant securities purchase agreement, dated May 1, 2023. In connection with the offering, the Company paid Univest Securities, LLC, the placement agent, a total cash fee equal to 7.0% of the aggregate gross proceeds received in the offering, a non-accountable expense allowance equal to 1% of the aggregate gross proceeds, and reimbursement for certain out-of-pocket accountable expenses incurred in this offering in the amount of $150,000. In addition, the Company issued to the placement agent warrants to purchase up to 115,452 shares of common stock at an exercise price of $10.02 per share, which represents 120% of the offering price of each share. The net proceeds from the Offering, after deducting placement agent discounts and commissions and estimated offering expenses payable by the Company, are approximately $8.5 million (assuming the warrants are not exercised). The Company used the net proceeds from the Offering for working capital and general corporate purposes.

On June 22, 2023, the Company entered into a software purchase agreement with Northeast Management LLC, a seller unaffiliated with the Company. Pursuant to the agreement, the Company agreed to purchase and the seller agreed to sell all of seller’s right, title, and interest in and to the certain software. The purchase price of the software shall be $750,000, payable in the form of issuance of 187,500 shares of common stock of the Company, valued at $4.00 per share. The Company plans to use the software to develop video games. On June 26, 2023, the Company issued the shares to the seller’s designees and the transaction was completed.

On July 29, 2015, the Company sold ~~5,000,000~~10,000,000 units at a purchase price of ~~$10.00~~$5.00 per unit (“Public Units”) in ~~the Public Offering.~~its initial public offering. Each Public Unit consists of one share of the Company’s common stock, $0.0001 par value, and one ~~common stock purchase~~ warrant. The Company did not register the shares of common stock issuable upon exercise of the warrants at the time of the Public Offering. However, the Company has agreed to use its best efforts to file and have an effective registration statement covering the shares of common stock issuable upon exercise of the warrants, to maintain a current prospectus relating to those shares of common stock until the earlier of the date the warrants expire or are redeemed and, the date on which all of the warrants have been exercised and to qualify the resale of such shares under state blue sky laws, to the extent an exemption is not available. Each warrant will entitle the holder to purchase one-half of one share of common stock at an exercise price of ~~$5.75~~$2.88 per half share ($~~11.50~~5.75 per whole share). Warrants may be exercised only for a whole number of shares of common stock. No fractional shares will be issued upon exercise of the warrants. The warrants will become exercisable on ~~the later of (a)~~ 30 days after the consummation of its initial Business Combination ~~or (b) 12 months from the closing of the Public Offering.~~with China Sunlong on February 6, 2018. The warrants will expire at 5:00 p.m., New York time, five years after the consummation of its initial Business Combination or earlier upon redemption or liquidation. On the exercise of any warrant, the warrant exercise price will be paid directly to us and not placed in the Trust Account.expired on February 5, 2023. The warrants will be redeemable by the Company at a price of $0.01 per warrant upon 30 days prior written notice after the warrants become exercisable, only in the event that the last sale price of the common stock equals or exceeds ~~$24.00~~$12.00 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which notice of redemption is given.

The ~~Company paid an upfront underwriting discount of $1,250,000 (approximately 2.5%~~sponsor of the ~~gross proceeds of the Public Offering) to the underwriters at~~Company purchased, simultaneously with the closing of the Public ~~Offering. The amount was charged~~Offering on July 29, 2015, 500,000 units at $5.00 per unit in a private placement for an aggregate price of $2,500,000. Each unit purchased is substantially identical to the ~~additional paid~~units sold in ~~capital account.~~the Public Offering.

The Company sold to the underwriter (and/or its designees), for $100, as additional compensation, an option to purchase up to a total of ~~400,000~~800,000 units exercisable at ~~$10.00~~$5.00 per unit (or an aggregate exercise price of $4,000,000) upon the closing of the Public Offering. Since the option is not exercisable until the earliest on the closing the initial Business Combination, the option will effectively represent the right to purchase up to ~~400,000~~800,000 shares of common stock and ~~400,000~~800,000 warrants to purchase ~~200,000~~400,000 shares at ~~$11.50~~$5.75 per full share for an aggregate maximum amount of $6,300,000. The units issuable upon exercise of this option are identical to those issued in the Public Offering. ~~(See Note 6).~~

~~September 30, 2017~~The aforementioned warrants and options are deemed to be effective on February 6, 2018, the date of the consummation of its initial business combination with China Sunlong, as the Company was deemed to be the accounting acquiree in the transaction and the transaction was treated as a recapitalization of China Sunlong.

~~In April 2015,~~After the ~~Sponsor purchased 1,504,688 shares~~1-for-30 reverse stock split effective on November 9, 2022, all options, warrants and other convertible securities of the ~~Company’s common stock (the “Founder Shares”) for $25,000, or $0.01662 per share, which included an aggregate of 192,188 Founder Shares that were subject to forfeiture by the Sponsor~~Company outstanding immediately prior to the ~~extent that~~reverse stock split were adjusted by dividing the ~~overallotment option was not exercised by the underwriter. In June 2015, our Sponsor transferred 164,063 Founder Shares to each~~number of Tim Richerson, our Chief Executive Officer, and Peter Nathanial, our President, as well as 3,000 Founder Shares to each of Messrs. Jetta and Qu, our independent directors. These 334,126 Founder Shares were not subject to forfeiture in the event the underwriter’s overallotment option was not exercised in full. The Founder Shares are identical to the shares of common stock ~~included~~into which the options, warrants and other convertible securities are exercisable or convertible by thirty (30) and multiplying the exercise or conversion price thereof by thirty (30), all in accordance with the ~~Units sold in~~terms of the ~~Public Offering, except that (1) the founder shares are~~plans, agreements or arrangements governing such options, warrants and other convertible securities and subject to ~~certain transfer restrictions, as described in more detail below, and (2) our initial stockholders have agreed: (i)~~rounding to ~~waive their redemption rights with respect to their founder shares in connection with~~ the consummation of a Business Combination and (ii) to waive their redemption rights with respect to their founder shares if we fail to complete our Business Combination within the required timeframe. However, our initial stockholders will be entitled to redemption rights with respect to any public shares they hold by way of public market purchase if we fail to consummate a Business Combination within such time period. If we submit our initial Business Combination to our public stockholders for a vote, our initial stockholders have agreed to vote their shares and any public shares held in favor of our initial Business Combination. The initial stockholders own founder shares equal to 20.0% of the Company’s issued and outstanding shares (not including the placement shares).nearest whole share.

On ~~September 8, 2015, the Sponsor forfeited 192,188 Founder Shares since the overallotment was not exercised, so that the initial stockholders owned 20.0% of the Company’s issued and outstanding~~February 18, 2021, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain purchasers, pursuant to which, on February 22, 2021, we sold (i) 138,889 shares of common stock, ~~(not including the placement shares).~~

~~Our initial stockholders have agreed not~~(ii) registered warrants (the “Registered Warrants”) to transfer, assign or sell any of their Founder Shares until one year after our initial Business Combination (the “lock up”). Notwithstanding the foregoing, if the last sale price of our common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial Business Combination, or if we consummate a transaction after our initial Business Combination which results in our stockholders having the right to exchange their shares for cash or property, the Founder Shares will be released from the lock-up.

~~The Sponsor purchased~~purchase an aggregate of 3,000,000 units in the Public Offering. The Sponsor has agreed that it will not seek redemption of 1,000,000 shares included in such units. Subsequent to September 30, 2017, the Company agreed to permit the Sponsor to redeem an additional 350,000 of such non-redeemable shares, such that the Sponsor may redeem up to ~~an aggregate of 2,350,000 shares on the same terms as the Public Shares.~~

In July 2015, the Sponsor purchased 250,000 placement units, each consisting of one share of common stock and one warrant to purchase one-half of one share of common stock at a price of $5.75 per half share, at a price of $10.00 per unit ($2,500,000 in the aggregate,) in a private placement that occurred simultaneously with the completion of the Public Offering. In addition, possible working capital loans by our Sponsor, management team, their affiliates and other third parties may be converted into warrants of the post-business combination entity at a price of $0.50 per warrant (a maximum of 1,000,000 warrants if up to $500,000 is loaned and that amount is converted into warrants). The placement warrants, and the loan warrants, if any, are (or will be) identical to the warrants sold in the Public Offering, except that, if held by our Sponsor or its permitted assigns, they (a) may be exercised for cash or on a cashless basis; (b) are not subject to being called for redemption and (c) they (including the common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30 days after the consummation of our initial Business Combination. The Sponsors have agreed that the warrants purchased will not be sold or transferred until 30 days following consummation of a Business Combination, subject to certain limited exceptions. If the Company does not complete a Business Combination, then the proceeds will be part of the liquidating distribution to the public stockholders and the warrants issued to the initial stockholders will expire worthless.

The private placement warrants and the common shares issuable upon exercise of the private placement warrants will not be transferable, assignable or salable until 30 days after the consummation of our initial Business Combination and the placement warrants will be non-redeemable so long as they are held by our Sponsor or its affiliates or designees. If the private placement warrants are held by someone other than the Sponsor, or its respective permitted transferees, the private placement warrants will be redeemable by us and exercisable by such holders on the same basis as the warrants included in the Units sold in the Public Offering.

For the period from April 10, 2015 (inception) through December 31, 2016, the Company’s Sponsor advanced to us a total, net of repayments, of $140,500 which has been used for the payment of costs associated with the Public Offering. These advances are non-interest bearing, unsecured and due on demand. Total amounts due to the sponsor were $140,500 at September 30, 2017 and December 31, 2016, respectively.

For the period from April 10, 2015 (inception) through December 31, 2016, an officer of the Company advanced us approximately $53,000 for expenses related to the Public Offering. These advances were repaid as of December 31, 2016.

In order to finance transaction costs in connection with an intended initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we consummate an initial Business Combination, we would repay such loaned amounts. In the event that the initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment, other than the interest income earned thereon. Up to $1,000,000 of such loans may be convertible into warrants of the post Business Combination entity at a price of $0.50 per warrant at the option of the lender. The warrants would be identical to the placement warrants. The terms of such loans by our Sponsors, officers and directors, if any, have not been determined and no written agreements exist with respect to such loans.

~~The underwriter was entitled to an underwriting discount of two and a half percent (2.5%), which was paid in cash.~~

The Company sold to the underwriter (and/or its designees), for $100, as additional compensation, an option to purchase up to a total of 400,000 units exercisable at $10.00 per unit (or an aggregate exercise price of $4,000,000) upon the closing of the Public Offering. Since the option is not exercisable until the earliest on the closing of our initial Business Combination, the option will effectively represent the right to purchase up to 400,00054,646 shares of common stock and ~~400,000~~(iii) unregistered warrants (the “Unregistered Warrants”) to purchase ~~200,000~~up to 84,244 shares (the “Warrant Shares”) of common stock in a registered direct offering (the “Registered Direct Offering”) and a concurrent private placement (the “Private Placement,” and together with the Registered Direct Offering, the “Offering”). The terms of the Offering were previously reported in a Form 8-K filed with the SEC on February 18, 2021 and the closing of the Offering was reported in a Form 8-K filed with the Commission on February 22, 2021.

The Registered Warrants have a term of five years and are exercisable immediately at ~~$11.50~~an exercise price of $201.60 per ~~full~~ share, ~~for an aggregate maximum amount of $6,300,000. The units issuable upon exercise of this option are identical~~subject to ~~those offered~~adjustments thereunder, including a reduction in the ~~Public Offering. This option may be exercised during~~exercise price, in the ~~five-year period from~~event of a subsequent offering at a price less than the then current exercise price, to the same price as the price in such offering (a “Price Protection Adjustment”).

The Unregistered Warrants have a term of five and one-half years and are first exercisable on the date that is the earlier of (i) six months after the date of ~~the Public Offering commencing on the later of the consummation of an initial Business Combination and the one-year anniversary of~~issuance or (ii) the date of the Public Offering. The Company accounts for the fair value of the unit purchase option, net of the receipt of the $100 cash payment, as an expense of the Public Offering resulting in a charge directly to stockholders’ equity. The Company estimates the fair value of this unit purchase option is approximately $2.02 per unit (for a total fair value of approximately $669,114) using a Black-Scholes option-pricing model. The fair value of the unit purchase option granted to the underwriter is estimated as of the date of grant using the following assumptions: (1) expected volatility of 11.15%, (2) risk-free interest rate of 1.36% and (3) expected life of 5 years. Because the Company’s units do not have a trading history, the volatility assumption is based on information currently available to management. The volatility assumption was calculated using the average volatility of exchange-traded funds tracking various indices, which are representative of the sectors on which the company intends to focus for the initial business transaction, including: Fidelity Select Consumer Staples Portfolio, Rydex Consumer Products Fund, Icon Consumer Staples, Putnam Global Consumer Fund, and Vanguard Consumer Staples ETF. The Company believes that the volatility estimate is a reasonable benchmark to use in estimating the expected volatility of the units. Although an expected life of five years was used in the calculation, if the Company does not consummate a Business Combination within the prescribed time period and it liquidates, the option will become worthless. The unit purchase option may be exercised for cash or on a “cashless” basis, at the holder’s option, such that the holder may use the appreciated value of the unit purchase option (the difference between the exercise prices of the unit purchase option and the underlying warrants and the market price of the Units and underlying shares of common stock) to exercise the unit purchase option without the payment of cash.

~~A total of $50,000,000, which includes $47,500,000 of the net proceeds from the Public Offering and $2,500,000 from~~obtains stockholder approval approving the sale of the ~~Private~~securities sold under the Securities Purchase Agreement, to purchase an aggregate of up to 84,244 shares of common stock. The Unregistered Warrants ~~has been placed in the Trust Account. As~~have an exercise price of ~~September 30, 2017~~$201.60 per share, subject to adjustments thereunder, including (x) a Price Protection Adjustment and ~~December 31, 2016, the balance in the Trust Account was $40,434,721 and $50,109,326, respectively.~~

As of September 30, 2017, the Company’s Trust Account consisted of $40,329,255 in U.S. Treasury Bills, $65,385 in accrued interest and $40,081 in cash. As of December 31, 2016, the Company’s Trust Account consisted of $49,940,597 in U.S. Treasury Bills, $5,400 in accrued interest and $163,329 in cash. The Company classifies its U. S. Treasury and equivalent securities as held-to-maturity in accordance with FASB ASC 320 “Investments - Debt and Equity Securities”. Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying September 30, 2017 and December 31, 2016 balance sheets and adjusted for the amortization or accretion of premiums or discounts.

~~The carrying amount, excluding interest income, gross unrealized holding gains and fair value of held-to-maturity securities at September 30, 2017 and December 31, 2016 are as follows:~~

~~As discussed in Note 2, the Trust Amendment extended the date on which to commence liquidating the Trust Account~~(y) in the event the ~~Company has not consummated~~exercise price is more than $183.00, a ~~Business Combination from July 29, 2017 to January 29, 2018. In July, 2017, 963,112~~reduction of the ~~Company’s outstanding shares of common stock were redeemed which left approximately $40.4 million in the Trust Account at September 30, 2017.~~

~~8. FAIR VALUE MEASUREMENTS~~exercise price to $183.00, upon obtaining such stockholder approval.

The Company complies with ASC 820, “Fair Value Measurement”, for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

The following table’s present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2017, and December 31, 2016, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and includes situations where there is little, if any, market activity for the asset or liability:

As discussed in Note 2, the Trust Amendment extended the date on which to commence liquidating the Trust Account in the event the Company has not consummated a Business Combination from July 29, 2017 to January 29, 2018. In connection with the Extension, 963,112 of the Company’s outstanding shares of common stock were redeemed in July 2017, which left approximately $40.4 million in the Trust Account.

~~On October 30, 2015, the Company entered into a twelve-month consulting agreement (the “Agreement”) with FirsTrust China Ltd. (the “Consultant”),~~Offering was conducted pursuant to ~~which the Consultant agreed to provide advisory services relating to potential business combination transactions and the Company agreed to pay the Consultant~~ a monthly fee of $20,000, payable quarterly in advance. In addition, the Company agreed to issue to the Consultant 20,000 restricted shares of the Company’s common stock upon the closing of the Company’s initial Business Combination. The Company estimated the fair value of the shares issuable to the Consultant to be $195,200 and has fully expensed the amount as of December 31, 2016. The Consultant was entitled to piggy-back registration rights relating to such shares similar to the piggy-back registration rights granted to the Company’s initial stockholders. During the year ended December 31, 2016, the Company recorded $150,134 in its consulting expenses.

~~On June 10, 2016,~~placement agency agreement, dated February 18, 2021 (the “Placement Agency Agreement”), between the Company and Univest Securities, LLC (the “Placement Agent”), on a “reasonable best efforts” basis. The Company paid the ~~Consultant entered into~~Placement Agent a ~~termination agreement, pursuant~~cash fee of $2,310,000, including $2,000,000 in commission which was equal to eight percent (8.0%) of the aggregate gross proceeds raised in this Offering, $250,000 in non-accountable expense which was equal to one percent (1%) of the aggregate gross proceeds raised in the Offering, and $60,000 in accountable expenses. Additionally, the Company ~~and Consultant mutually agreed to terminate the Agreement in exchange for a $60,000 termination fee. Further, the Consultant agreed that the Company shall have no further obligations~~issued to the ~~Consultant, including but not limited~~Placement Agent warrants to ~~the Company’s obligation~~purchase up to ~~issue shares to the Consultant upon the closing of the Company’s initial Business Combination. Accordingly, the Company wrote off the unamortized $65,066 prepaid consulting expenses.~~

The Company agreed to permit its Sponsor to redeem an additional 350,000 of the non-redeemable shares and resulted in a total of 4,350,000 shares of redeemable common stock (see Note 3). As described in Note 2, in connection with the Extension, there were redemptions of 963,112 of the Company’s shares of common stock. Accordingly, at September 30, 2017 and December 31, 2016, 3,036,888 and 4,000,000 Public Shares were classified outside of permanent equity at its redemption value, respectively. In addition to the 4,000,000 common stock with a redemption feature, the Company subsequently agreed to permit its Sponsor to redeem an additional 350,000 of the non-redeemable shares. As a result, the Company has a total of 3,386,888 shares of redeemable common stock as of the date of this report.

~~The Company is authorized to issue 15,000,000~~6,945 shares of common stock, with a term of five years first exercisable six months after the date of issuance and at an exercise price of $180.00 per share.

Pursuant to the Securities Purchase Agreement, we are required to hold a meeting of our stockholders not later than April 29, 2021 to seek such approval as may be required from our stockholders (the “Stockholder Approval”), in accordance with applicable law, the applicable rules and regulations of the Nasdaq Stock Market, our certificate of incorporation and bylaws and the Nevada Revised Statutes with respect to the issuance of the securities in the Offering, including the Warrants sold in the Private Placement, so that the issuance by us of shares of common stock in excess of the 231,802 shares (19.99% of the shares of common stock outstanding as of February 17, 2021, the date prior to entering into the Securities Purchase Agreement) in the aggregate (the “Issuable Maximum”), will be in compliance with Nasdaq Listing Rules 5635(a) and 5635(d) as described herein, and investors in the Offering will be able to exercise the Warrants prior to six months after the closing of the Offering.

On April 29, 2021, we held a special meeting of stockholders and approved the issuance of shares of common stock in excess of the 231,802 shares. The exercise price of the Unregistered Warrants was reduced to $183.00.

On May 1, 2023, the Company entered into a placement agency agreement, as amended on May 16, 2023 (the “Placement Agency Agreement”), with Univest Securities, LLC (the “Placement Agent”). Pursuant to the Placement Agency Agreement, the Placement Agent agrees to use its reasonable best efforts to sell the Company’s common stock in a registered direct offering (the “RD Offering”), and a concurrent private placement (the “PIPE Offering”, together with the RD Offering, collectively the “Offering”). The Placement Agent has no obligation to buy any of the securities from us or to arrange for the purchase or sale of any specific number or dollar amount of securities.

In the RD Offering, an aggregate of 310,168 shares of common stock (the “Common Shares”) of the Company, par value of $0.0001 per ~~share. Holders~~share, and pre-funded warrants to purchase up to an aggregate of 844,351 shares of common stock (the “Pre-Funded Warrants”, and the common stock underlying such warrants, the “Pre-Funded Warrant Shares”) are sold to certain purchasers (the “Purchasers”), pursuant to a securities purchase agreement, dated May 1, 2023, as amended on May 16, 2023 (the “RD Securities Purchase Agreement”). The purchase price of each Common Share is $8.35. The purchase price of each Pre-funded Warrant is $8.349, which equals the price per Common Share being sold to the public in the Offering, minus $0.001. The RD Offering is being made pursuant to a shelf registration statement (No. 333-254366) on Form S-3, which was declared effective by the U.S. Securities and Exchange Commission on March 26, 2021, and related prospectus supplement.

In connection with the Pre-Funded Warrant Shares, “Pre-funded” refers to the fact that the purchase price of the warrants in the offering includes almost the entire exercise price that will be paid under the Pre-funded Warrants, except for a nominal remaining exercise price of $0.001. The purpose of the Pre-funded Warrants is to enable Purchasers that may have restrictions on their ability to beneficially own more than 4.99% (or, upon election of the holder, 9.99%) of the Company’s outstanding common stock following the consummation of the offering the opportunity to make an investment in the Company without triggering their ownership restrictions, by receiving Pre-funded Warrants in lieu of the Company’s common stock ~~are entitled~~which would result in such ownership of more than 4.99% (or 9.99%), and receive the ability to ~~one vote~~exercise their option to purchase the shares underlying the Pre-funded Warrants at such nominal price at a later date. In the RD Offering, each Pre-funded Warrant is exercisable for ~~each~~one share of our common ~~stock. At September 30, 2017~~stock, with an exercise price equal to $0.001 per share, at any time that the Pre-funded Warrant is outstanding. The Pre-funded Warrants will be exercisable immediately after issuance and ~~December 31, 2016, there were 5,599,388 and 6,562,500~~will expire five (5) years from the date of issuance. The holder of a Pre-funded Warrant will not be deemed a holder of our underlying common stock until the Pre-funded Warrant is exercised.

In the concurrent PIPE Offering, warrants to purchase up to 1,154,519 shares of common stock ~~issued~~(the “Unregistered Warrants”, and ~~outstanding (including 3,036,888~~the common stock underlying such warrants, the “Unregistered Warrant Shares”) are also sold to the Purchasers, pursuant to a private warrant securities purchase agreement, dated May 1, 2023. The Unregistered Warrants are exercisable immediately after issuance and ~~4,000,000~~will expire five (5) years from the date of issuance. The Exercise Price of the Unregistered Warrants is $8.35, subject to adjustment as provided in the form of Unregistered Warrants.

The Company also paid the Placement Agent a total cash fee equal to 7.0% of the aggregate gross proceeds received in the Offering and a non-accountable expense allowance equal to 1% of the aggregate gross proceeds. The Placement Agent were also reimbursed for certain out-of-pocket accountable expenses incurred in this offering up to $150,000. The Placement Agent also received warrants to purchase up to 115,452 shares of common stock ~~subject~~(equal to ~~redemption, respectively), respectively.~~5.0% of the aggregate number of Common Shares, Pre-Funded Warrant Shares, and the Unregistered Warrant Shares) at an exercise price of $10.02 per share, which represents 120% of the offering price of each Common Share. The Placement Agent’s warrants will have substantially the same terms as the Unregistered Warrants.

From time to time, the Company may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity.

The Company ~~is authorized~~follows ASC 280, Segment Reporting, which requires that companies disclose segment data based on how management makes decision about allocating resources to segments and evaluating their performance. The Company’s chief operating decision maker evaluates performance and determines resource allocations based on a number of factors, the primary measure being income from operations.

The Company’s remain business segment and operations are Highlight Media (prior to September 30, 2023) and AI Catalysis. The Company’s consolidated results of operations and consolidated financial position from continuing operations are almost all attributable to Highlight Media and AI Catalysis; accordingly, management believes that the consolidated balance sheets and statement of operations provide the relevant information to assess Highlight Media and AI Catalysis’s performance.

The following depicts the result of operations for the discounted operations of Highlight Media for the nine months ended September 30, 2023 and Wuge for the nine months ended September 30, 2022, respectively.

~~In July 2016, the board of directors of the Company appointed two new directors. In August, the Sponsor granted an option to each of the two new directors to acquire 6,000~~400,000 shares of common stock of the Company, valued at a$2.7820 per share, the average closing bid price of ~~$9.79 per share exercisable commencing six months after~~the common stock of GDC as of the five trading days immediately preceding the date of the Agreement, to Beijing Hehe or its assigns. The closing of the ~~initial Business Combination~~transaction shall take place within thirty (30) days from the execution of the Agreement. The Agreement is effective for thirty (30) days from the date of the Agreement, which can be extended for additional thirty (30) days upon all parties’ written agreement. The Company or Highlight WFOE may terminate the Agreement at any time with a three (3) day advance written notice to Beijing Hehe.

On November 1, 2023, the Company entered into a placement agency agreement (the “Placement Agency Agreement”), with Univest Securities, LLC (the “Placement Agent” or “Univest”). Pursuant to the Placement Agency Agreement, the Placement Agent agrees to use its reasonable best efforts to sell the Company’s common stock (the “Common Stock”) in a registered direct offering (the “Offering”). The Placement Agent has no obligation to buy any of the securities from us or to arrange for the purchase or sale of any specific number or dollar amount of securities.

In the Offering, (i) an aggregate of 1,436,253 shares of common stock (the “Common Shares”) of the Company, par value $0.0001 per share, (ii) pre-funded warrants to purchase up to an aggregate of 1,876,103 shares of common stock (the “Pre-Funded Warrants”, and ~~expiring~~the common stock underlying such warrants, the “Pre-Funded Warrant Shares”), and (iii) registered warrants to purchase up to an aggregate of 3,312,356 shares of common stock (the “Registered Warrants”, and the common stock underlying such warrants, the “Registered Warrant Shares”) are sold to certain purchasers (the “Purchasers”), pursuant to a securities purchase agreement, dated October 31, 2023 (the “Securities Purchase Agreement”). The purchase price of each Common Share is $3.019. The purchase price of each Pre-funded Warrant is $3.018, which equals the price per Common Share being sold in this Offering, minus $0.001. The Pre-funded Warrants will be exercisable immediately after issuance and will expire five (5) years from the ~~closing~~date of issuance. The Registered Warrants will be exercisable immediately and will expire five (5) years from the date of issuance.

The Offering is being made pursuant to a shelf registration statement (No. 333-254366) on Form S-3, which was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on March 26, 2021, and related prospectus supplement.

The net proceeds from the Offering, after deducting placement agent discounts and commissions and estimated offering expenses payable by the Company, are approximately $9.05 million (assuming the Registered Warrants are not exercised). The Company intends to use the net proceeds from the Offering for working capital and general corporate purposes.

Pursuant to the Placement Agency Agreement, the Company has agreed to pay the Placement Agent a total cash fee equal to 7.0% of the ~~initial Business Combination.~~aggregate gross proceeds received in the Offering. The Company ~~estimates~~also agreed to reimburse the ~~fair value of the purchase options at $15,546 using a Black-Scholes option-pricing model and recorded $15,546 as compensation~~Placement Agent certain out-of-pocket accountable expenses ~~accordingly for the year ended December 31, 2016.~~

In ~~addition~~concurrent with the Offering, on November 1, 2023, the Company entered into certain warrant exchange agreements (the “Warrant Exchange Agreements”) with certain holders of warrants issued by the Company on May 16, 2023 in a private placement (the “Existing Warrants”), to purchase up to 1,154,519 shares of the Company’s Common Stock (the “Holders”). Pursuant to the ~~4,000,000 common stock with a redemption feature,~~Warrant Exchange Agreements, the Holders shall surrender the Existing Warrants, and the Company ~~subsequently agreed~~shall cancel the Existing Warrants and shall issue to ~~permit its Sponsor~~Holders pre-funded warrants to ~~redeem an additional 350,000~~purchase up to 577,260 shares of the ~~non-redeemable shares~~Company’s Common Stock (the “Exchange Warrants”). The Exchange Warrants were issued to Holders on November 3, 2023 and ~~resulted in a total of 4,350,000 shares of redeemable common stock. As a result,~~the warrant exchange closed on the same day.

On November 17, 2023, the Company ~~has a total of 3,386,888 shares of redeemable common stock as of the date of this report.~~

~~In October 2017,~~entered into an ~~affiliate of the Sunlong further advanced approximately $30,000 to the Company for working capital purposes. The advance is non-interest bearing, unsecured and due on demand.~~

~~In October 2017, Zhong Hui Holding Limited sold an aggregate of 170,000 founder shares to the Company’s CEO and President at the purchase price of $0.017 per share, pursuant~~amendment to the Securities ~~Assignment~~Purchase Agreement ~~dated October 11, 2017.~~ with the Purchasers, pursuant to which Exhibit B to the Securities Purchase Agreement (form of Registered Warrants) was deleted and replaced with an amended and restated the Form of Registered Warrant, to remove Section 2(b) Adjustment Upon Issuance of Common Stock and Section 2(e) Other Events.

The Registered Warrants that were issued to Purchasers under the Securities Purchase Agreement were returned to and cancelled by the Company on November 17, 2023. Concurrently, the Company issued amended and restated Registered Warrants to each Purchaser.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOF OPERATIONS

~~References to the “Company,” “us” or “we” refer to JM Global Holding Company.~~ The following discussion and analysis of the ~~Company’s~~results of our operations and financial condition ~~and results of operations~~ should be read in conjunction with ~~the interim~~our unaudited condensed financial statements, and the notes ~~thereto contained~~to those unaudited condensed financial statements that are included elsewhere in this ~~quarterly report on Form 10-Q (“Report”). Certain information contained~~Report. All monetary figures are presented in ~~the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.~~U.S. dollars, unless otherwise indicated.

~~All statements other than statements of historical fact included in this Report including, without limitation, statements under “Management’s~~Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward- looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national, and local general economic and market conditions; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of ~~Financial Condition~~significant customers or suppliers; fluctuations and ~~Results of Operations” regarding the Company’s financial position,~~difficulty in forecasting operating results; change in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ~~plans~~ability to protect technology; the risk of foreign currency exchange rate; and objectives of management for future operations, are forward looking statements. When used in this Report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relateother risks that might be detailed from time to us or the Company’s management, identify forward looking statements. Such forward looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated by the forward looking statements as a result of certain factors detailedtime in our filings with the Securities and Exchange ~~Commission (the “SEC”).~~Commission.

~~The following discussion~~Although the forward-looking statements in this Report reflect the good faith judgment of our management, such statements can only be based on facts and ~~analysis~~factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward- looking statements. You are urged to carefully review and consider the various disclosures made by us in this report as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations ~~should~~and prospects.

GD Culture Group Limited, formerly known as JM Global Holding Company, TMSR Holding Company Limited and Code Chain New Continent Limited (“GDC” or the “Company”), focuses its business on three segments mainly through one of its subsidiaries, AI Catalysis Corp.: 1) AI-driven digital human creation and customization; 2) Live streaming and ecommerce and 3) Live Streaming Interactive Game. The company has relentlessly been focusing on serving its customers and creating value for them through the continual innovation and optimization of its products and services.

For AI-Driven Digital Human sector, the Company uses AI algorithms and software to generate realistic 3D or 2D digital human models. AI algorithms and machine learning models are used to simulate human characteristics, such as facial expressions, body movements, and even speech patterns. These models can be ~~read~~customized to create and personalize lifelike digital representations of humans. Customization may involve adjusting facial features, body proportions, skin textures, hair styles, clothing, and more. Once created and customized, digital humans find applications in ~~conjunction~~a wide range of industries, including gaming, entertainment, advertising, education, and more. Depending on the specific industry and use case, the Company helps the customers to define the objectives to achieve with digital humans, choose the technology for character customization, then create unique aviators and deploy in the chosen platform.

For e-Commerce and Live Streaming sector, the Company applies Digital Human technology in live streaming e-commerce businesses. Livestream usage is taking off globally. The integration of cutting-edge AI digital human technologies and live streaming platforms will transform the way businesses, sellers and consumers engage in online commerce. Digital anchors can offer long-duration intelligent live broadcasting. It also supports customized avatars that perfectly adapt to different live streaming scenarios. The company has introduced online e-commerce businesses on TikTok.

For Live Streaming Interactive Game sector, the Company has launched a live-streamed game called "Trible Light." This game is owned by the company, and we independently operate it. Currently, the game is being livestreamed on TikTok (TikTok account: almplify001). In addition to "Trible Light," we have also introduced other licensed games on the same TikTok account, providing a diverse gaming experience for our players.

We generate our revenue primarily from: 1) Service revenue and advertising revenue from Digital Human Creation and Customization; 2) Products’ Sales revenue from social live streaming ecommerce business; and 3) Virtual paid gifts revenue from live streaming interactive gaming.

Our principal executive office is located at 810 Seventh Avenue, 22nd Floor, New York, NY 10019, and our telephone number is: +1-347-2590292.

Prior to September 28, 2022, we also conducted business through Wuge Network Games Co., Ltd. (“Wuge”). Makesi WFOE had a series of contractual arrangement with Wuge that established a VIE structure. For accounting purposes, Makesi WFOE was the primary beneficiary of Wuge. Accordingly, under U.S. GAAP, GDC treated Wuge as the consolidated affiliated entity and has consolidated Yuanma’s financial results in Wuge’s financial statements prior to September 28, 2022. Wuge focused its business on research, development and application of Internet of Things (IoT) and electronic tokens Wuge digital door signs. On September 28, 2022, Makesi WFOE entered into a termination agreement with Wuge and the shareholders of Wuge to terminate the VIE agreements and to cancel the shares previously issued to the shareholders of Wuge, based on the average closing price of $0.237 per share of the Company during the 30 trading days immediately prior to the date of the termination agreement. As a result of such termination, the Company no longer treats Wuge as a consolidated affiliated entity or consolidates the financial results and balance sheet of Wuge in the Company’s consolidated financial statements under U.S. GAAP.

Prior to June 26, 2023, we had a subsidiary TMSR HK, which owns 100% equity interest in Makesi WFOE. Makesi WFOE had a series of contractual arrangement with Yuanma that established a VIE structure. For accounting purposes, Makesi WFOE was the primary beneficiary of Yuanma. Accordingly, under U.S. GAAP, GDC treated Yuanma as the consolidated affiliated entity and has consolidated Yuanma’s financial results in GDC’s financial statements prior to June 26, 2023. On June 26, 2023, GDC entered into a share purchase agreement with a buyer unaffiliated with the Company. Pursuant to the agreement, the Company agreed to sell and the buyer agreed to purchase all the issued and outstanding equity interest in TMSR HK. The purchase price for the transaction contemplated by the Agreement was $100,000. The sale of TMSR HK included the sale of Makesi WFOE and Yuanma. None of TMSR HK, Makesi WFOE or Yuanma had any assets, employees or operation. The sale of TMSR HK did not have any material impact on the Company’s consolidated financial statements.

Prior to September 26, 2023, we also conducted business through Shanghai Highlight Media Co., Ltd. (“Highlight Media”). Highlight WFOE had a series of contractual arrangement with Highlight Media. For accounting purposes, Highlight WFOE was the primary beneficiary of Highlight Media. Accordingly, under U.S. GAAP, GDC treated Highlight Media as the consolidated affiliated entity and has consolidated Highlight Media’s financial results in GDC’s financial statements prior to September 26, 2023. Highlight Media was an integrated marketing service agency, focusing on enterprise brand management, crisis public relations, intelligent public opinion monitoring, media PR, financial and economic we-media operation, digital face application, large-scale exhibition services and other businesses. On September 26, 2023, Highlight WFOE entered into a termination agreement with Highlight Media and the ~~notes thereto contained elsewhere~~shareholders of Highlight Media to terminate the VIE Agreements and sold the interest in the VIE Agreements for a purchase price of $100,000. As a result of such termination, the Company no longer treats Highlight Media as a consolidated affiliated entity or consolidates the financial results and balance sheet of Highlight Media in the Company’s consolidated financial statements under U.S. GAAP.

On October 9, 2023, the Company notified its independent registered public accounting firm, Enrome LLP, its decision to dismiss Enrome LLP as the Company’s auditor. On October 12, 2023, the Audit Committee and the Board of Directors of the Company approved the appointment of HTL International, LLC as its new independent registered public accounting firm to audit the Company’s financial statements.

On August 10, 2023, Highlight WFOE, Beijing Hehe Property Management Co., Ltd. (“Beijing Hehe”), and a third party, established SH Xianzhui under the laws of the People’s Republic of China for social media marketing. Highlight WFOE owns 60% of the equity interest of SH Xianzhui, Beijing Hehe owns 20% of the equity interest of SH Xianzhui and the third party owns the remaining 20% of the equity interest of SH Xianzhui.

On October 27, 2023, the Company entered into an equity purchase agreement with Highlight WFOE and Beijing Hehe, which was amended on November 10, 2023 (such equity purchase agreement, as amended, the “Agreement” for purpose of this section “Investment in SH Xianzhui”), pursuant to which the Highlight WFOE agreed to purchase 13.3333% equity interest in SH Xianzhui from Beijing Hehe and the Company agreed to issue 400,000 shares of common stock of the Company, valued at $2.7820 per share, the average closing bid price of the common stock of GDC as of the five trading days immediately preceding the date of the Agreement, to Beijing Hehe or its assigns. The closing of the transaction shall take place within thirty (30) days from the execution of the Agreement. The Agreement is effective for thirty (30) days from the date of the Agreement, which can be extended for additional thirty (30) days upon all parties’ written agreement. The Company or Highlight WFOE may terminate the Agreement at any time with a three (3) day advance written notice to Beijing Hehe.

In the Offering, (i) an aggregate of 1,436,253 shares of common stock (the “Common Shares”) of the Company, par value $0.0001 per share, (ii) pre-funded warrants to purchase up to an aggregate of 1,876,103 shares of common stock (the “Pre-Funded Warrants”, and the common stock underlying such warrants, the “Pre-Funded Warrant Shares”), and (iii) registered warrants to purchase up to an aggregate of 3,312,356 shares of common stock (the “Registered Warrants”, and the common stock underlying such warrants, the “Registered Warrant Shares”) are sold to certain purchasers (the “Purchasers”), pursuant to a securities purchase agreement, dated October 31, 2023 (the “Securities Purchase Agreement”). The purchase price of each Common Share is $3.019. The purchase price of each Pre-funded Warrant is $3.018, which equals the price per Common Share being sold in this ~~Report. Certain information contained~~Offering, minus $0.001. The Pre-funded Warrants will be exercisable immediately after issuance and will expire five (5) years from the date of issuance. The Registered Warrants will be exercisable immediately and will expire five (5) years from the date of issuance.

Pursuant to the Placement Agency Agreement, the Company has agreed to pay the Placement Agent a total cash fee equal to 7.0% of the aggregate gross proceeds received in the ~~discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.~~Offering. The Company also agreed to reimburse the Placement Agent certain out-of-pocket accountable expenses incurred in this Offering up to $150,000.

~~We are~~In concurrent with the Offering, on November 1, 2023, the Company entered into certain warrant exchange agreements (the “Warrant Exchange Agreements”) with certain holders of warrants issued by the Company on May 16, 2023 in a ~~blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock~~private placement (the “Existing Warrants”), to purchase reorganization or similar business combination with one or more businesses or entities. We consummated our initial public offering on July 29, 2015. We are currently in the process of evaluating and identifying targets for a business combination. We are evaluating acquisition opportunities and, at any given time, may be in various stages of due diligence or preliminary discussions with respectup to a number of potential acquisitions. From time to time, we may enter into non-binding letters of intent, but we are currently not subject to any definitive agreement with respect to any business combination. However, we cannot assure you that we will identify any suitable target candidates or, if identified, that we will be able to complete the acquisition of such candidates on favorable terms or at all. We intend to effectuate our initial business combination using cash from the proceeds1,154,519 shares of the ~~Public Offering~~Company’s Common Stock (the “Holders”). Pursuant to the Warrant Exchange Agreements, the Holders shall surrender the Existing Warrants, and the ~~private placement~~Company shall cancel the Existing Warrants and shall issue to Holders pre-funded warrants to purchase up to 577,260 shares of the Company’s Common Stock (the “Exchange Warrants”). The Exchange Warrants were issued to Holders on November 3, 2023 and the warrant exchange closed on the same day.

On November 17, 2023, the Company entered into an amendment to the Securities Purchase Agreement with the Purchasers, pursuant to which Exhibit B to the Securities Purchase Agreement (form of Registered Warrants) was deleted and replaced with an amended and restated the Form of Registered Warrant, to remove Section 2(b) Adjustment Upon Issuance of Common Stock and Section 2(e) Other Events.

E-commerce and live streaming is a competitive industry. Our competition varies and includes content creators on TikTok and other social media platform. Each of these competitors competes with us based on quality of content, activeness and responsiveness on the social placement, ~~units, our capital stock, debt~~product selection, product quality, customer service, price, store format, location, or a combination of these ~~as the consideration~~factors. Some of these competitors may have been in business longer, may have more experience, or may have greater financial or marketing resources than us. As competition intensifies, our results of operations may be negatively impacted through a loss of sales and decrease in market share.

Our management team comprises executives with extensive experience in technology and content creation. The management team has led us to ~~be paid~~take leaps in ~~our initial business combination.~~

deploying AI technology in live-steaming, e-commerce, gaming and other sectors. The ~~issuance~~loss of ~~additional shares~~any of our ~~stock in a~~key executive team member might affect our business ~~combination:~~and our result of operation.

We are still in an early development stage. We intend to expand our presence on social media to increase the market presence. If we cannot grow market presence and penetrate new markets in an effective and cost-efficient way, our results of operation will be negatively impacted.

~~As indicated in~~ the ~~accompanying financial statements, at~~COVID-19 Pandemic

The COVID-19 pandemic did not have a material impact on our business or results of operation during the nine months ended September 30, ~~2017, we had approximately $3,000 in cash. We expect to incur significant costs in~~2023 and 2022. However, the ~~pursuit of our acquisition plans. We cannot assure you that our plans to complete our initial business combination will be successful.~~

On August 28, 2017, JM Global Holding Company (“JM Global” or the “Company”) entered into a Share Exchange Agreement with China Sunlong Environmental Technology, Inc., a Cayman Islands company (“CaymanCo”), each of CaymanCo’s shareholders (collectively, the “Sellers”), the Company’s sponsor, Zhong Hui Holding Limited, in the capacity as the representative for the Company’s stockholders prior to the closing of the Business Combination (as defined below) (the “Purchaser Representative”), and Chuanliu Ni, in the capacity as the representative for the Sellers (the “Seller Representative”), pursuantextent to which ~~among other things~~the COVID-19 pandemic may negatively impact the general economy and ~~subject~~our business is highly uncertain and cannot be accurately predicted. These uncertainties may impede our ability to ~~the terms~~conduct our operations and ~~conditions contained therein, the Company will effect an acquisition of CaymanCo, which primarily conducts its~~could materially and adversely affect our business, through its indirect wholly-owned subsidiaries, Hubei Shengrong Environmental Protection Energy-Saving Science and Technology Co. Ltd. (“Hubei Shengrong”) and Tianjin Commodity Exchange Company Limited (“TJComex” and collectively with CaymanCo and its subsidiaries, the “Sunlong”) by acquiring from the Sellers all outstanding equity interests of CaymanCo (the “Business Combination”).

Pursuant to the Share Exchange Agreement, in exchange for all of the outstanding shares of Sunlong, the Company will issue a number of shares of our common stock (the “Exchange Shares”) at $10.00 per share based on an adjusted equity valuation of CaymanCo (the “Adjusted Equity Value”) determined by starting with a base valuation of $92.0 million, deducting the amount of indebtedness (net of cash) of Sunlong as of the closing, deducting the amount of unpaid transaction expenses incurred by Sunlong, and increasing (or decreasing if negative) such valuation to the extent that the net working capital (excluding indebtedness, cash and transaction expenses) of Sunlong as of the closing is greater than $26.55 million.. Ten percent (10%) of the Exchange Shares (“Escrow Shares”) will be deposited in escrow at the closing of the Business Combination (which is also referred to herein as the closing) and subject to forfeiture back to us (along with dividends and other earnings otherwise payable with respect to such Escrow Shares) in the event that the Purchaser Representative successfully brings an indemnification claim under the Exchange Agreement on behalf of our shareholders. The Exchange Shares, including the Escrow Shares, will be allocated among the Sellers pro-rata based on each Seller’s ownership of CaymanCo prior to the Business Combination. The Exchange Shares will be subject to a lock-up as set forth in the Lock-Up Agreement as described elsewhere in the preliminary proxy statement filed with the Securities and Exchange Commission on October 11, 2017.

The Business Combination will be accounted for as a “reverse merger” in accordance with accounting principles generally accepted in the U.S. Under this method of accounting, the Company will be treated as the “acquired” company for financial reporting purposes. This determination was primarily based on Sunlong comprising ongoing operations of the combined company, Sunlong’ s senior management comprising the senior management of the combined company, and Sunlong stockholders having a majority of the voting power of the combined company. For accounting purposes, Sunlong will be deemed to be the accounting acquirer in the transaction and, consequently, the transaction will be treated as a recapitalization of Sunlong (i.e., a capital transaction involving the issuance of stock by the Company for the stock of Sunlong). Accordingly, the consolidated assets, liabilitiescondition and results of operations, ~~of Sunlong will become the historical financial statements of the combined company,~~ and ~~the Company’s assets, liabilities~~as a result could adversely affect our stock price and ~~results of operations will be consolidated with Sunlong beginning on the acquisition date.~~create more volatility.

The Share Exchange Agreement contains a number of representations and warranties made by the Company, on the one hand, and Sunlong, on the other hand, made for the benefit of the other, which in certain cases are subject to specified exceptions and qualifications contained in the Share Exchange Agreement or in information provided pursuant to certain disclosure schedules to the Share Exchange Agreement. The representations and warranties are customary for transactions similar to the Business Combination. Each representation, warranty, covenant, undertaking and agreement contained in the Share Exchange Agreement will expire as of, and will not survive, the consummation of the Business Combination.

The obligation of the parties to complete the Business Combination is subject to the fulfillment of certain closing conditions, including, among others: (i) the approval by the Company’s shareholders of the election of certain directors to serve as directors on its board of directors (ii) the expiration or termination of the regulatory waiting periods under any applicable antitrust laws and the receipt of any other required governmental and regulatory approvals and consents, (iii) the entrance by the applicable parties into the Escrow Agreement, the Lock-Up Agreement, the Non-Competition and Non-Solicitation Agreement and the Registration Rights Agreement, (iv) no material adverse effect shall have occurred with respect to the other party (or with respect to CaymanCo, its subsidiaries) since the date of the Share Exchange Agreement (v) the approval by the Company’s shareholders of the election of certain directors to serve as directors on its board of directors, (vi) that upon the closing, and after giving effect to the redemptions, the Company has at least $5,000,001 in net tangible assets (excluding the assets and liabilities of Sunlong), and (vii) that the net working capital of Sunlong shall be at least $22,000,000.

~~We have neither engaged in any operations nor generated any revenues to date. For the period from April 10, 2015 (inception) through~~Three Months Ended September 30, ~~2017, we had a net loss of $1,163,602 and incurred costs of $1,862,816 related to our initial public offering which have been charged to stockholders’ equity.~~2023 vs. September 30, 2022

The Company’s ~~entire activity~~operating expenses include selling, general and administrative (“SG&A”) expenses, and recovery of doubtful accounts.

SG&A expenses increased by approximately $3.6 million from ~~April 10, 2015 (inception) through July 29, 2015, was in preparation~~approximately $0.1 million for our initial public offering, which was consummated on July 29, 2015. Since that date, we have engaged in a search for a business combination. Our operating costs since then include our search for an initial business combination and are largely associated with our governance and public reporting, consulting fees, and state franchise taxes of approximately $1,488,000 through September 30, 2017. Investment income of approximately $336,000 represents the realized and unrealized appreciation on our investment in U.S. treasury bills since our initial public offering. For the three months ended September 30, ~~2017,~~2022 to approximately $3.7 million for the three months ended September 30, 2023. The increase was mainly due to the combined impact of (i) the reduction of impairment of prepayments, (ii) increase in professional service fees incurred for industry research and analysis and daily operation management, (iii) the expansion of our administrative associated personnel cost, and (iv) increase in operating ~~costs included our search~~and lease expenses for offices.

The Company’s other income increased by approximately $47 thousand during the three months ended September 30, 2023, compared to nil for the three months ended September 30, 2022. The increase was due to the accrued interest for the investment in convertible notes.

As a result of the foregoing, loss from continuing operations for the three months ended September 30, 2023 was approximately $3.6 million, an ~~initial business combination and are largely associated with our governance and public reporting, due diligence consulting fees and legal fees~~increase of approximately ~~$371,000~~5552.9%, from approximately loss from continuing operations of $0.1 million for the three months ended September 30, 2022.

The Company’s net loss decreased by approximately $0.6 million, or 13.8%, to approximately $3.5 million net loss for the three months ended September 30, 2023, from approximately $4.1 million net loss for the same period in 2022. The decrease was mainly due to the combined impact of (i) the reduction of impairment of prepayments, (ii) increase in professional service fees incurred for industry research and ~~we recorded approximately $95,000~~analysis and daily operation management, (iii) the expansion of our administrative associated personnel cost, (iv) increase in ~~investment income. For~~operating and lease expenses for offices the reduction of impairment of prepayments, and (v) loss on disposal of Wuge in 2022.

The Company’s revenue consists of software copyright. Total revenues increased by $0.2 million, compared to nil for the nine months ended September 30, ~~2017, our operating costs included our search for an initial business combination and are largely associated with our governance and public reporting,~~2022. The increase was mainly due ~~diligence consulting fees and legal fees~~to the start of approximately $615,000 and we recorded approximately $278,000 in investment income. For the three months ended September 30, 2016, our operating costs included our search for an initial business combination and are largely associated with our governance and public reporting, director fees and consulting feesoperation of ~~approximately $96,000 and we recorded approximately $18,000 in investment income. For~~AI Catalysis.

The Company’s gross profit increased by $0.2 million, during the nine months ended September 30, ~~2016,~~2023, compared to nil for the nine months ended September 30, 2022. The increase was due to the start of operation of AI Catalysis.

The Company’s operating expenses include selling, general and administrative (“SG&A”) expenses, and recovery of doubtful accounts.

SG&A expenses decreased by approximately $15.8 million from approximately $19.7 million for the nine months ended September 30, 2022 to approximately $3.9 million for the nine months ended September 30, 2023. The decrease was mainly due to the combined impact of (i) the reduction of impairment of prepayments, (ii) increase in professional service fees incurred for industry research and analysis and daily operation management, (iii) the expansion of our administrative associated personnel cost, (iv) increase in operating ~~costs included our search~~and lease expenses for ~~an initial business combination~~offices, and ~~are largely associated with our governance and public reporting, director fees and consulting fees~~(v) the reduction of impairment of goodwill.

The Company’s other income increased by approximately $147 thousand during the nine months ended September 30, 2023, compared to nil for the nine months ended September 30, 2022. The increase was due to the accrued interest for the investment in convertible notes.

As a result of the foregoing, loss from continuing operations for the nine months ended September 30, 2023 was approximately $3.6 million, a decrease of approximately ~~$513,000~~$16.1 million, or approximately 81.5%, from approximately loss from operations of $19.7 million for the nine months ended September 30, 2022. The decrease was mainly due to the combined impact of (i) the reduction of impairment of prepayments, (ii) increase in professional service fees incurred for industry research and we recorded approximately $53,000 in investment income. We may need to raise additional capital through loans or additional investments from our sponsor, stockholders, officers, directors, or third parties. In order to fund transaction costs in connection with an intended initial business combination, our sponsor, membersanalysis and daily operation management, (iii) the expansion of our administrative associated personnel cost, (iv) increase in operating and lease expenses for offices, and (v) the reduction of impairment of goodwill.

The Company’s net loss decreased by approximately $19.9 million, or 84.6%, to approximately $3.6 million net loss for the nine months ended September 30, 2023, from approximately $23.5 million net loss for the same period in 2022. The decrease was mainly due to the combined impact of (i) the reduction of impairment of prepayments, (ii) increase in professional service fees incurred for industry research and analysis and daily operation management, ~~team or their affiliates or other third parties may loan us additional amounts, provided any such loans will not have any claim on~~(iii) the ~~proceeds held~~expansion of our administrative associated personnel cost, (iv) increase in operating and lease expenses for offices, and (v) the ~~trust account unless such proceeds are released to us upon completion~~reduction of ~~an initial business combination. If we do not consummate an initial business combination, we may use a portion~~impairment of any working capital held outside the trust account to repay such loaned amounts; however, no proceeds from the trust account may be used for such repayment, other than interest income earned thereon. If such funds are insufficient to repay the loan amounts, the unpaid amounts would be forgiven. Any part or all of such loans may be converted into additional warrants at $0.50 per warrant (a maximum of 1,000,000 warrants if up to $500,000 is loanedgoodwill.

Critical Accounting Policies and ~~that amount is converted into warrants)~~Estimates

The preparation of the post-business combination entity at the option of such parties. The warrants would be identical to the placement warrants issued to our sponsor. None of our sponsors, stockholders, officers or directors, or third parties, are under any obligation to advance us funds, or to invest in us. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of our business plan, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all. These conditions raise substantial doubt about our ability to continue as a going concern.

We are an emerging growth company as defined in the JOBS Act. As an emerging growth company, we have elected, pursuant to Section 107(b) of the JOBS Act, to take advantage of the extended transition period provided in Securities Act Section 7(a)(2)(B) for complying with new or revised accounting standards. We will therefore delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. We may take advantage of this extended transition period until the earlier of the date we (i) are no longer an “emerging growth company” or (ii) affirmatively and irrevocably opt out of the extended transition period provided in Securities Act Section 7(a)(2)(B). As such, ourunaudited condensed financial statements ~~may not be comparable to companies that comply with public company effective dates.~~

Upon the issuance of a new or revised accounting standard that applies to our financial statements and has a different effective date for public and private companies, we will disclose the date on which adoption is required for non-emerging growth companies and the date on which we will adopt the recently-issued accounting standard.

As of September 30, 2017, we had cash of $2,799. Subsequent to September 30, 2017, an affiliate of the Sunlong advanced us approximately $30,000. Until the consummation of our initial public offering on July 29, 2015, the Company’s only source of liquidity was an initial purchase of our shares of common stock and a series of advances made by an affiliate of the Company. These advances are non-interest bearing and unsecured. On July 29, 2015, we consummated our initial public offering of 5,000,000 units at a price of $10.00 per unit. Simultaneously with the consummation of our initial public offering, we consummated the private sale of 250,000 placement units to our sponsor. Each private placement unit consists of one share of common stock and one warrant to purchase one-half of one share of common stock at a price of $5.75 per half share, at a price of $10.00 per unit ($2,500,000 in the aggregate). We received net proceeds from our initial public offering and the private placement of approximately $50,650,000, net of the underwriting commissions and fees of $1,250,000 and offering costs and other expenses of approximately $600,000. $50,000,000 of the proceeds of our initial public offering and the private placement have been deposited in the trust account and are not available to us for operations (except amounts designated to pay taxes and working capital from the interest accrued). At September 30, 2017, we had approximately $3,000 of cash available outside of the trust account to fund our activities to search for an initial business combination. An affiliate of Sunlong orally agreed to fund the Company’s working capital needs through its Extension.

As of September 30, 2017, $40,434,721 was held in the Trust Account and we had cash outside of trust of $2,799 and $92,061 in accounts payable, $176,970 other payable, $37,369 accrued expenses and $140,500 due to affiliates. Through September 30, 2017, the Company had withdrawn $43,485 from interest earned on the trust proceeds and $9,631,120 upon redemption of 963,112 shares of common stock. Subsequent to September 30, 2017 and as of the date of this report, the Company withdrew approximately $28,000 from interest earned on the trust proceeds. Furthermore, no amounts are payable to the underwriters of our initial public offering in the event of a business combination.

As of September 30, 2017, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations. We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.

~~We do not have any long term debt, capital lease obligations, operating lease obligations or purchase obligations.~~

~~The accompanying unaudited interim financial statements are presented in U.S. dollars~~ in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of ~~America (‘‘GAAP’’) for interim information~~commitments and in accordance with the instructions to Form 10-Q and Article 8 and Article 10 of Regulation S-X. Accordingly, since they are interim statements, the accompanying financial statements do not include all of the information and notes required by GAAP for a complete financial statement presentation. These financial statements should be read in conjunction with the Company’s annual Form 10-K filing. In the opinion of management, the interim financial statements reflect all adjustments (consisting of normal, recurring adjustments)contingencies, if any. We have identified certain accounting policies that are ~~necessary~~significant to the preparation of our unaudited condensed consolidated financial statements. These accounting policies are important for ~~a fair presentation~~an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial ~~position,~~conditions and results of operations and ~~cash flows for the interim periods presented. Interim results are not necessarily indicative of results for~~require management’s difficult, subjective, or complex judgment, often as a ~~full year and pursuant to the rules and regulations~~result of the ~~SEC.~~

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding for the period. At September 30, 2017, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted loss per common share is the same as basic loss per common share for the periods presented.

~~The preparation of financial statements in conformity with GAAP requires management~~need to make estimates about the effect of matters that are inherently uncertain and ~~assumptions that affect the reported amounts~~may change in subsequent periods. Certain accounting estimates are particularly sensitive because of ~~assets and liabilities and disclosure of contingent assets and liabilities at the date of the~~their significance to financial statements and because of the ~~reported amounts of revenues~~possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following critical accounting policies involve the most significant estimates and ~~expenses during the reporting period. Actual results could differ from those estimates.~~

The Company complies with the accounting and reporting requirements of FASB ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

FASB ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits as of September 30, 2017. No amounts were accrued for the payment of interest and penalties at September 30, 2017. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

~~The Company may be subject to potential examination by U.S. federal, U.S. states or foreign jurisdiction authorities~~judgments used in the ~~areas~~preparation of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with U.S. federal, U.S. state and foreign tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.our unaudited condensed consolidated financial statements.

The Company considers ~~all~~certain short-term, highly liquid investments with an original maturity of three months or less, when purchased, to be cash equivalents. Cash and cash equivalents primarily represent bank deposits and fixed deposits with maturities of less than three months.

The Company ~~did~~purchases certain liquid short term investments such as money market funds and or other short-term debt securities marketed by large financial institutions. These investments are not ~~have any cash equivalents~~insured against loss of principal. These investments are accounted for as financial instruments that are marked to fair market value at the end of ~~September 30, 2017~~each reporting period. As result of their short maturities, and ~~December 31, 2016.~~limited risk profile, at times, their amortized carrying cost may be the best approximation their fair value.

Accounts receivable include trade accounts due from customers. An allowance for doubtful accounts may be established and ~~securities held~~recorded based on management’s assessment of potential losses based on the credit history and relationships with the customers. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable.

Prepayments are funds deposited or advanced to outside vendors for future inventory purchases. As a standard practice in ~~Trust Account~~

~~At September 30, 2017 and December 31, 2016, substantially all~~China, many of the ~~assets held in the Trust Account were held in U.S. Treasury Bills.~~

~~Accrued expenses and due~~Company’s vendors require a certain amount to ~~affiliate~~

~~Accrued expenses represent amounts~~be deposited with them as a guarantee that the Company ~~owes to~~will complete its purchases on a timely basis. This amount is refundable and bears no interest. The Company has legally binding contracts with its vendors, ~~for services that have been provided but not paid for, state franchise tax as well as an affiliate of the Sunlong advanced~~which require any outstanding prepayments to be returned to the Company when the contract ends.

The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by us. The Company considers the carrying amount of cash, notes receivable, accounts receivable, other receivables, prepayments, accounts payable, other payables and accrued liabilities, customer deposits, short term loans and taxes payable to approximate their fair values because of their short term nature.

The accounting standards define fair value, establish a three-level valuation hierarchy for ~~paying~~disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow:

On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (ASC 606) using the modified retrospective method for contracts that were not completed as of January 1, 2018. This did not result in an adjustment to retained earnings upon adoption of this new guidance as the Company’s ~~working capital. These advances are non-interest bearing, unsecured and payable~~revenue, other than warranty revenues, was recognized based on ~~demand. At September 30, 2017 and December 31, 2016 there was approximately $214,000 and $83,000, respectively, accrued~~the amount of consideration we expect to receive in exchange for ~~state franchise tax and third party advance in~~satisfying the ~~Company’s accrued expenses.~~

~~Due to affiliate represents entity costs and offering costs paid by an affiliate on behalf of~~performance obligations. However, the ~~Company. These advances are non-interest bearing, unsecured and payable on demand.~~

As discussed in Note 5, 4,000,000 of the 5,000,000 shares of common stock sold as part of the units in the Public Offering contain a redemption feature which allows for the redemption of common stock under the Company’s liquidation or tender offer/stockholder approval provisions. In accordance with ASC 480, redemption provisions not solely within the control of the Company require the security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of ASC 480. Although the Company did not specify a maximum redemption threshold, its charter provides that in no event will it redeem its Public Shares in an amount that would cause its net tangible assets (stockholders’ equity) to be less than $5,000,001. As described in Note 2, in connection with the Extension, 963,112impact of the Company’s outstanding shares of common stock were redeemed in July, 2017. Accordingly, at September 30, 2017 and December 31, 2016, 3,036,888 and 4,000,000 Public Shares were classified outside of permanent equity at its redemption value, respectively. In addition to the 4,000,000 common stock with a redemption feature, the Company subsequently agreed to permit its Sponsor to redeem an additional 350,000 of the non-redeemable shares. As a result, the Company has a total of 3,386,888 shares of redeemable common stockwarranty revenue was not material as of the date of ~~this report.~~adoption, and as a result, did not result in an adjustment.

~~Recently issued accounting standards~~The core principle underlying the revenue recognition ASU is that the Company will recognize revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Company’s revenue streams are primarily recognized at a point in time.

~~Management~~The ASU requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The application of the five-step model to the revenue streams compared to the prior guidance did not result in significant changes in the way the Company records its revenue. Upon adoption, the Company evaluated its revenue recognition policy for all revenue streams within the scope of the ASU under previous standards and using the five-step model under the new guidance and confirmed that there were no differences in the pattern of revenue recognition except its warranty revenues.

Revenues from digital doors signs are recognized at a point in time when legal title and control over the sign is transferred to the customer. Management has determined that for the sales of digital door signs there is a single performance obligation that is met when the aforementioned control is transferred. Typically, customers make payment for the product in advance; the Company will record the payment as contract liabilities under the liability account customer deposits until the Company delivers the product by transferring control. Such revenues are recognized at a point in time after all performance obligations are satisfied under the new five-step model.

Payments received prior to the relevant criteria for revenue recognition are met, are recorded as customer deposits.

Starting from July 2016, in the normal course of the Company’s trading of industrial waste materials business, the Company directly purchases the processed industrial waste materials from the Company’s suppliers under the Company’s specifications and drop ships the materials directly to the Company’s customers. The Company would inspect the materials at its customers’ site, during which inspection it temporarily assumes legal title to the materials, and after which inspection legal title is transferred to its customers. In these situations, the Company generally collects the sales proceeds directly from the Company’s customers and pay for the inventory purchases to the Company’s suppliers separately. The determination of whether revenues should be reported on a gross or net basis is based on the Company’s assessment of whether it is the principal or an agent in the transaction. In determining whether the Company is the principal or an agent, the Company follows the new accounting guidance for principal-agent considerations. Since the Company is the primary obligor and is responsible for (i) fulfilling the processed industrial waste materials delivery, (ii) controlling the inventory by temporarily assume legal title to the materials after inspecting the products from our vendors before passing the materials to our customers, and (iii) bearing the back-end risk of inventory loss with respect to any product return from the Company’s customers, the Company has concluded that it is the principal in these arrangements, and therefore report revenues and cost of revenues on a gross basis.

In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this Update affect any entity that is required to apply the provisions of Topic 220, Income Statement – Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP. The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. We do not believe ~~that any~~the adoption of this ASU would have a material effect on our consolidated financial statements.

We do not believe other recently issued but not yet effective accounting ~~pronouncements,~~standards, if currently adopted, would have a material effect on our consolidated balance sheets, statements of income and comprehensive income and statements of cash flows.

The Company has funded working capital and other capital requirements primarily by equity contributions, loans from shareholders, cash flow from operations, short term bank loans, loans from third parties. Cash is required to repay debts and pay salaries, office expenses, income taxes and other operating expenses. As of September 30, 2023, our net working capital was approximately $6.3 million and is expected to continue to generate cash flow by operations from the acquisitions of new companies in the twelve months period.

We believe that current levels of cash and cash flows from operations will be sufficient to meet its anticipated cash needs for at least the next twelve months from the date the consolidated financial statements to be issued. However, it may need additional cash resources in the future if it experiences changed business conditions or other developments, and may also need additional cash resources in the future if it wishes to pursue opportunities for investment, acquisition, strategic cooperation or other similar actions. If it is determined that the cash requirements exceed the Company’s amounts of cash and cash equivalents on hand, the Company may seek to issue debt or equity securities or obtain additional credit facility.

The following summarizes the key components of the Company’s cash flows for the nine months ended September 30, 2023 and 2022.

As of September 30, 2023 and December 31, 2022, the Company had cash in the amount of $1.6 million and $0.4 million, respectively. As of September 30, 2023 and December 31, 2022, $1.1 million and $0.2 million and were deposited with various financial ~~statements.~~institutions located in the PRC, respectively. As of September 30, 2023 and December 31, 2022, $0.5 million and $0.2 million were deposited with one financial institution located in the United States, respectively.

Net cash used in operating activities was approximately $6.5 million for the nine months ended September 30, 2023, as compared to approximately $1.0 million net cash used in operating activities for the September 30, 2022. Net cash used in operating activities was mainly due to the increase of approximately $4.6 million of prepayments, the increase of $0.1 million of prepaid expense-related party, the decrease of approximately $0.2 million of other payables-related parties, and the increase of approximately $0.1 million of customer deposits.

Net cash used in investing activities was $5.0 million for the nine months ended September 30, 2023, as compared to approximately $12.3 million net cash used in investing activities for the nine months ended September 30, 2022. Net cash used in investing activities was mainly due to the purchase of intangible assets with the amount of $2.5 million and investment in convertible notes of Liquid Marketplace Corp and DigiTrax Entertainment Inc. with the amount of $2.5 million.

Net cash provided by financing activities was $12.7 million for the nine months ended September 30, 2023, as compared to nil net cash used in financing activities for the nine months ended September 30, 2022. Net cash provided by financing activities was mainly due to the increase of approximately $8.6 million of issuance of common stock and contribution by noncontrolling shareholder with the amount of $4.1 million.

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and accounts receivable. Cash held at major financial institutions located in the PRC are not insured by the government. While we believe that these financial institutions are of high credit quality, it also continually monitors their credit worthiness.

Accounts receivable are typically unsecured and derived from revenue earned from customers, thereby exposed to credit risk. Credit risk is controlled by the application of credit approvals, limits and monitoring procedures. The Company manages credit risk through ~~September 30, 2017 relates~~in-house research and analysis of the Chinese economy and the underlying obligors and transaction structures. To minimize credit risk, the Company normally require prepayment from the customers prior to begin production or delivery products. The Company identifies credit risk collectively based on industry, geography and customer type. This information is monitored regularly by management.

In measuring the credit risk of our sales to our ~~formation~~customers, the Company mainly reflects the “probability of default” by the customer on its contractual obligations and considers the current financial position of the customer and the ~~preparation for our Initial Public Offering. We did not have any financial instruments that were~~exposures to the customer and its likely future development.

The Company is also exposed to ~~market risks~~liquidity risk which is risk that it is unable to provide sufficient capital resources and liquidity to meet its commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, the Company will turn to other financial institutions and the owners to obtain short-term funding to meet the liquidity shortage.

The Company is also exposed to inflation risk. Inflationary factors, such as increases in raw material and overhead costs, could impair our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and operating expenses as a percentage of sales revenue if the selling prices of our products do not increase with such increased costs.

A majority of the Company’s operating activities and a significant portion of the Company’s assets and liabilities are denominated in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the Peoples’ Bank of China (“PBOC”) or other authorized financial institutions at ~~September 30, 2017.~~exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices and signed contracts. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market.

Under the supervision and with the participation of our management, including our Chief Executive Officers, President and Chief Financial Officer (the “Certifying Officers”), we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this Report.

Disclosure controls and procedures are controls and other procedures ~~that are~~ designed to ensure that information required to be disclosed in our reports filed or submitted under the ~~Securities~~ Exchange Act ~~of 1934, as amended (the “Exchange Act”)~~ is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in ~~company~~our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our ~~Chief Executive Officer and Chief Financial Officer,~~Certifying Officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2017. Based upon his evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act)There were ~~effective.~~

~~During the most recently completed fiscal quarter, there has been~~ no ~~change~~changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that ~~has~~have materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.

~~Factors that could cause~~Investing in our ~~actual results to differ materially from those~~common stock involves a high degree of risk. You should carefully consider the information included in this ~~report are any of~~Quarterly Report on Form 10-Q and the ~~risks described~~risk factors discussed in Part I, “Item 1A. Risk Factors” in our ~~annual report and~~Annual Report on Form 10-K ~~filed with~~for the ~~SEC on March 28, 2017. Any of these factors could result~~fiscal year ended December 31, 2022 before making an investment in ~~a significant or material adverse effect on~~ our common stock. Our business, financial condition, results of operations, or ~~financial condition.~~prospects could be materially and adversely affected if any of these risks occurs, and as a result, the market price of our common stock could decline and you could lose all or part of your investment. Additional ~~risk factors~~risks and uncertainties not ~~presently~~currently known to us or that we currently deem to be immaterial also may ~~also impair~~materially adversely affect our business, financial condition and/or ~~results of operations. As of the date of this Report, there have been~~operating results. There are no material changes to the risk factors ~~disclosed~~described in our ~~annual report and~~Annual Report on Form 10-K ~~filed with~~for the ~~SEC~~fiscal year ended December 31, 2022. This Quarterly Report on ~~March 28, 2017, except we may disclose changes to such~~Form 10-Q also contains forward-looking statements that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results could differ materially and adversely from those anticipated in these forward-looking statements as a result of certain factors, ~~or disclose additional factors from time to time in our future filings with the SEC.~~including those set forth below.

~~None.~~On August 10, 2023, Highlight WFOE, Beijing Hehe, and a third party, established Sha SH Xianzhui under the laws of the People’s Republic of China for social media marketing. Highlight WFOE owns 60% of the equity interest of SH Xianzhui, Beijing Hehe owns 20% of the equity interest of the Joint Venture and the third party owns the remaining 20% of the equity interest of the Joint Venture.

On October 27, 2023, the Company entered into an equity purchase agreement with Highlight WFOE and Beijing Hehe, which was amended on November 10, 2023 (such equity purchase agreement, as amended, the “Agreement” for purpose of this section), pursuant to which the Highlight WFOE agreed to purchase 13.3333% equity interest in SH Xianzhui from Beijing Hehe and the Company agreed to issue 400,000 shares of common stock of the Company, valued at $2.7820 per share, the average closing bid price of the common stock of GDC as of the five trading days immediately preceding the date of the Agreement, to Beijing Hehe or its assigns. The closing of the transaction shall take place within thirty (30) days from the execution of the Agreement. The Agreement is effective for thirty (30) days from the date of the Agreement, which can be extended for additional thirty (30) days upon all parties’ written agreement. The Company or Highlight WFOE may terminate the Agreement at any time with a three (3) day advance written notice to Beijing Hehe.

As of the date of this report, the transaction has not been completed and such shares have not been issued.

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	September 30, 2023			December 31, 2022
Beginning balance	$	(3,120	)	$	-
Addition		-			(3,120	)
Disposal of Highlight Media		2,949			-
Exchange rate effect		171			-
Ending balance	$	-		$	(3,120	)

	September 30, 2023			December 31, 2022
Weighted average discount rate:
Operating lease		5.25 years			N/A

Weighted average discount rate:
Operating lease		4.24	%		N/A

	Operating Leases

FY2024		344,768
FY2025		383,632
FY2026		391,305
FY2027		399,131
FY2028		407,114
Total lease payments		1,925,949
Less: imputed interest		213,549
Present value of lease liabilities ⁽¹⁾		1,712,400

	September 30, 2023			December 31, 2022
Net operating losses carried forward – U.S.	$	276,982		$	4,574,581
Valuation allowance		(276,982	)		(4,574,581	)
Deferred tax assets, net	$	-		$	-

	Description	Total Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Assets:
September 30, 2017	Cash and U.S. Treasury Bills held in Trust Account	$	40,434,721	$	40,394,641	$	-	$	-

December 31, 2016	Cash and U.S. Treasury Bills held in Trust Account	$	50,109,326	$	49,945,997	$	-	$	-

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,			For the Nine Months Ended September 30,
	2017			2016			2017			2016

Revenue	$	-		$	-		$	-		$	-

Operating expenses		371,161			96,174			615,384			512,981

Loss from operations		(371,161	)		(96,174	)		(615,384	)		(512,981	)

Interest income		94,560			17,513			227,603			53,497
Net loss attributable to common stock (excluding shares subject to possible redemption)	$	(276,601	)	$	(78,661	)	$	(387,781	)	$	(459,484	)

Basic and diluted net loss per share	$	(0.11	)	$	(0.03	)	$	(0.15	)	$	(0.18	)

Weighted average number of common stock outstanding
Basic and diluted (excluding shares subject to possible redemption)		2,562,500			2,562,500			2,562,500			2,562,500

	Nine Months Ended September 30, 2017			Nine Months Ended September 30, 2016

Cash flows from operating activities:
Net loss	$	(387,781	)	$	(459,484	)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issuable for consulting fees					97,600
Stock-based compensation for director fees					15,546
Changes in operating assets and liabilities
Increase in prepaid expenses		(7,042	)		(3,882	)
Increase (decrease) in accounts payable		72,139			(26,970	)
Increase in accrued expenses		131,692			18,077
Net cash used in operating activities		(190,992	)		(359,113	)

Cash flows from investing activities:

Withdrawal from Trust Account upon redemption of 963,112 shares		9,631,120
Interest income withdrawal (reinvested) in Trust Account		43,485			(53,497	)
Net cash provided by (used in) investing activities		9,674,605			(53,497	)

Cash flows from financing activities:
Redemption of 963,112 shares		(9,631,120	)		-
Net cash used in financing activities		(9,631,120	)		-

Net change in cash		(147,507	)		(412,610	)
Cash, beginning of period		150,306			623,044

Cash, end of period	$	2,799		$	210,434

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Non-cash operating and financing activities
Payments made directly to a vendor by an affiliate of China Sunlong Environmental Technology, Inc.	$	30,000		$	-
Cancellation of common stock issued for future services included in unamortized prepaid expenses	$	-		$	65,066

	September 30, 2023		December 31, 2022
Accounts receivable	$	150,000	$	197,640
Less: Allowance for doubtful accounts		-		(3,120	)
Total accounts receivable, net	$	150,000	$	194,520

	September 30, 2023		December 31, 2022
Receivable from disposal of Wuge	$	-	$	948,000
Receivable from disposal of Highlight Media		100,000		-
Interest receivable from convertible notes		46,575		-
Others		-		78,293
Total other receivables, net	$	146,575	$	1,026,293

	September 30, 2023			December 31, 2022
Office equipment and furniture	$	9,617		$	10,039
Subtotal		9,617			10,039
Less: accumulated depreciation		(751	)		(9,537	)
Total	$	8,866		$	502

	Highlight Media			Total
Balance as of December 31, 2022	$	2,190,485		$	2,190,485
Impairment		(2,070,753	)		(2,070,753	)
Foreign currency translation adjustment		(119,732	)		(119,732	)
Balance as of September 30, 2023	$	-		$	-

Name of related party	Relationship	September 30, 2023		December 31, 2022
XIAO JIAN WANG	Chief Executive Officer of the Company	$	100,000	$	-
Total		$	100,000	$	-

	September 30, 2023		December 31, 2022
VAT taxes payable	$	-	$	8,478
Other taxes payable		-		-
Total	$	-	$	8,478

	Held-To-Maturity	Carrying Amount		Accrued Interest		Fair Value
September 30, 2017	U.S. Treasury Bills	$	40,329,255	$	65,386	$	40,394,641

December 31, 2016	U.S. Treasury Bills	$	49,940,597	$	5,400	$	49,945,997

	Warrants		Exercisable Into Number of		Weighted Average Exercise		Average Remaining Contractual
	Outstanding		Shares		Price		Life
December 31, 2022		4,539,674		151,323		172.5		0.10
Granted/Acquired		2,114,322		844,351	$	8.53		4.63
Expired		164,675		5,488	$	172.5		0.10
Exercised		844,351		844,351		0.001		-
September 30, 2023		5,644,970		145,835	$	25.03		4.34

	Options		Exercisable Into Number of		Weighted Average Exercise		Average Remaining Contractual
	Outstanding		Shares		Price		Life
December 31, 2022		824,000		27,467	$	150.00		0.10
Granted/Acquired		-		-	$	-		-
Expired		824,000		27,467	$	150.00		0.10
Exercised		-		-		-		-
September 30, 2023		-		-	$	-		-

Total assets as of	September 30, 2023		December 31, 2022
Highlight Media	$	-	$	489,195
SH Xianzhui		3,871,388		-
GDC, AI Catalysis, Citi Profit BVI , TMSR HK , Highlight HK, Highlight WFOE and Makesi WFOE		10,034,903		3,311,713
Total Assets	$	13,906,291	$	3,800,908

	For the Nine Months Ended September 30,
Total revenues of	2023		2022
Highlight Media	$	-	$	-
SH Xianzhui
GDC, AI Catalysis, Citi Profit BVI , TMSR HK , Highlight HK, Highlight WFOE and Makesi WFOE		150,000		-
Total revenues	$	150,000	$	-

	●	~~may significantly dilute the equity interest of investors in our initial public offering;~~

	●	~~may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;~~

	●	could cause a change in control if a substantial number of shares of our common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;

	●	~~may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and~~

	●	~~may adversely affect prevailing market prices for our common stock and/or warrants.~~

	●	~~default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;~~

	●	~~acceleration~~ Impact of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

	●	~~our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand and the lender demands payment;~~

	●	~~limitations on our ability to obtain additional financing if the debt security contains covenants restricting our ability to incur debt;~~

	●	~~our inability to pay dividends on our common stock due to covenants limiting or prohibiting dividends;~~

	●	using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce, or possibly eliminate, the funds available for use as dividends on our common stock, expenses, capital expenditures, acquisitions and other general corporate purposes;

	●	~~limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate.~~

										Percentage
	2023			2022			Change			Change
Revenues
Enterprise brand management		-			-			-			N/A	%
Software copyright		-			-			-			N/A	%

Total revenues		-			-			-			N/A	%

Cost of Revenues
Enterprise brand management service		-			-			-			N/A	%
Software copyright		-			-			-			N/A	%

Total cost of revenues		-			-			-			N/A	%

Gross profit		-			-			-			N/A	%
Operating expenses		3,667,011			64,041			3,602,970			5,626.0	%
Loss from operations		(3,667,011	)		(64,041	)		(3,602,970	)		5,626.0	%
Other income, net		46,839			-			46,839			100.0	%
Loss before income tax from continuing operations		(3,620,172	)		(64,041	)		(3,556,131	)		5,552.9	%
Provision for income taxes		-			-			-			N/A	%
Loss from continuing operations		(3,620,172	)		(64,041	)		(3,556,131	)		5,552.9	%
Net loss attributable to noncontrolling interest		(102,485	)		-			(102,485	)		(100.0	)%
Loss from continuing operations attributable to GD Culture Group Limited		(3,517,687	)		(64,041	)		(3,453,646	)		5,392.9	%
Discontinued operations:
Loss from discontinued operations		(10,358	)		-			(10,358	)		(100.0	)%
Loss on disposal, net of taxes		(230	)		(4,027,930	)		4,027,700			(100.0	)%
Net Loss		(3,528,275	)		(4,091,971	)		563,696			(13.8	)%

										Percentage
	2023			2022			Change			Change
Revenues
Enterprise brand management		-			-			-			N/A	%
Software copyright		150,000			-			150,000			100.0	%

Total revenues		150,000			-			150,000			100.0	%

Cost of Revenues
Enterprise brand management service		-			-			-			N/A%
Software copyright		-			-			-			N/A%

Total cost of revenues		-			-			-			N/A%

Gross profit		150,000			-			150,000			100.0	%
Operating expenses		3,942,947			19,749,408			(15,806,461	)		(80.0	)%
Loss from operations		(3,792,947	)		(19,749,408	)		15,956,461			(80.8	)%
Other income, net		147,018			-			147,018			100.0	%
Loss before income tax from continuing operations		(3,645,929	)		(19,749,408	)		16,103,479			(81.5	)%
Provision for income taxes		-			-			-			N/A%
Loss from continuing operations		(3,645,929	)		(19,749,408	)		16,103,479			(81.5	)%
Net loss attributable to noncontrolling interest		(102,485	)		-			(102,485	)		(100.0	)%
Loss from continuing operations attributable to GD Culture Group Limited		(3,543,444	)		(19,749,408	)		16,205,964			(82.1	)%
Discontinued operations:
Loss from discontinued operations		(61,408	)		303,089			(364,497	)		(120.3	)%
Loss on disposal, net of taxes		(230	)		(4,027,930	)		4,027,700			(100.0	)%
Net Loss		(3,605,082	)		(23,474,249	)		19,869,167			(84.6	)%

Exhibit Number		Description
10.1**31.1		Share Exchange Agreement, dated as of August 28, 2017, by and among JM Global Holding Company, Zhong Hui Holding Limited, in the capacity as the Purchaser Representative thereunder, China Sunlong Environmental Technology, Inc., the shareholders of China Sunlong Environmental Technology, Inc., and Chuanliu Ni, in the capacity as the Seller Representative thereunder.
10.2**		Form of Registration Rights Agreement, by and among JM Global Holding Company, Zhong Hui Holding Limited, in the capacity as the Purchaser Representative, and shareholders of China Sunlong Environmental Technology, Inc. named as Investors therein.
10.3**		Form of Lock-Up Agreement, by and among JM Global Holding Company, Zhong Hui Holding Limited, in the capacity as the Purchaser Representative, and shareholders of China Sunlong Environmental Technology, Inc.
10.4**		Form of Non-Competition and Non-Solicitation Agreement, by and among certain shareholders of China Sunlong Environmental Technology, Inc. and certain other associated persons and entities for the benefit of JM Global Holding Company, Zhong Hui Holding Limited, in the capacity as the Purchaser Representative, and China Sunlong Environmental Technology, Inc.
10.5*		~~Side Letter, dated as of October 10, 2017, by and among JM Global Holding Company, the Reporting Persons and Cantor Fitzgerald & Co.~~
31.1*		Certification of the Chief Executive Officer ~~and~~required by Rule 13a-14(a) or Rule 15d-14(a).
31.2		Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).
~~32.1#~~32.1		Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
32.2		Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.
101.INS*101.INS		Inline XBRL Instance ~~Document~~Document.
101.SCH*101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL*101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase

	~~JM GLOBAL HOLDING COMPANY~~GD CULTURE GROUP LIMITED

Date: November ~~14, 2017~~20, 2023	By:	/s/ ~~Tim Richerson~~Xiaojian Wang
	Name:	~~Tim Richerson~~Xiaojian Wang
	Title:	Chief Executive Officer, President and ~~Chief Financial Officer~~
		~~(Principal Executive~~Chairman of the Board

Date: November 20, 2023	By:	/s/ Zihao Zhao
	Name:	Zihao Zhao
	Title:	Chief Financial Officer and Secretary
		(Principal Financial Officer and Principal Accounting Officer)