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Certain third-party shareholders of Shantou Hongrui and Zhixin signed consents with the Company for the year ended December 31, 2020, which stated that the Company has the power and control to direct the activities that most significantly impact Shantou Hongrui and Zhixin and they unconditionally vote by consensus with the Company in all the board decisions. As such, the Company consolidates the financial results of Shantou Hongrui and Zhixin based on the voting power. Security deposits represent contract fulfillment deposits required by customer for specific projects, rent deposits and etc. The Company had unsecured, interest-bearing loan receivables from various third parties. The maturity of these loans are generally within one year. As of December 31, 2020 and 2019, the loans to third parties amounted to $704,981 and $740,000 with annual interest rates approximately 8% and 5.3%. Pursuant to the agreement with Shenzhen Kezhi Technology Co., Ltd.(“Kezhi”) on September 25, 2020 and a series of amendments entered during the period from September 25, 2020 to May 16, 2021, the Company intends to expand to media business through Kezhi. The Company originally planned to acquire certain media business assets from Kezhi, however, due to uncertainties in COVID-19, the Company and Kezhi ultimately reached into a final agreement (“Final agreement”) on May 16, 2021. Pursuant to the Final agreement, the Company agreed to extend a working capital support loan to Kezhi in aggregated of $68,095,019 with expected annual returns over two years and coupon interest rate of 5%. The expected annual return is as follows: For the year ended December 31, 2020 and 2019, certain application development service arrangements included sales of IT equipment. 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(&#x201c;Powerbridge&#x201d; or the &#x201c;Company&#x201d;), is a company that was established under the laws of the Cayman Islands on July 27, 2018 as a holding company. The Company, through its subsidiaries (collectively the &#x201c;Company&#x201d;), is a provider of software application and technology services to corporate and government customers engaged in global trade. Mr. Ban Lor, the Company&#x2019;s Chairman of the Board and Chief Executive Officer (&#x201c;CEO&#x201d;), together with his brother, Mr. Stewart Lor, the Company&#x2019;s Chief Financial Officer (&#x201c;CFO&#x201d;) are the ultimate Controlling Shareholders of the Company.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Initial Public Offering </font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 4, 2019, the Company consummated its initial public offering (&#x201c;IPO&#x201d;) of 2,012,500 Ordinary Shares at a price of $5.00 per shares including the exercise in full of the underwriters' over-allotment option of 262,500 ordinary shares at IPO price of $5.00 per share. The gross proceeds from the IPO was $10,062,500 and the net proceeds was $8,021,987. 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Consequently, the Company has experienced delayed customer payments and rescheduled customer orders. Since the COVID-19 pandemic has been gradually contained in China, our revenue and gross margin for the year ended December 31, 2020 has not been adversely affected. However, any potential impact to the Company&#x2019;s results will depend on, to a large extent, future developments and new information that may emerge regarding the duration and severity of the COVID-19 and the actions taken by government authorities and other entities to contain the COVID-19 or treat its impact, almost all of which are beyond the Company&#x2019;s control.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Reorganization</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A reorganization of the Company&#x2019;s legal structure was completed on August 27, 2018. The reorganization involved the incorporation of Powerbridge, a Cayman Islands holding company, and its wholly owned subsidiaries, Powerbridge Technologies Co., Limited (&#x201c;Powerbridge HK&#x201d;), a holding company incorporated on July 27, 2018 under the laws of Hong Kong; and the transfer of all equity ownership of Zhuhai Powerbridge Technology Co., Ltd. (&#x201c;Powerbridge Zhuhai&#x201d;) to Powerbridge HK from the former shareholders of Powerbridge Zhuhai through an investment holding company. In consideration of the transfer, the Company issued 11,508,747 shares of the Company with par value 0.001 per share to the former shareholders of Powerbridge Zhuhai. On February 10, 2019, the board of directors approved a reverse stock split of the Company&#x2019;s authorized number of Ordinary Shares at a ratio of 1-0.6. After the reverse stock split, the Company&#x2019;s authorized number of Ordinary Shares was 30,000,000 shares with par value of $0.00166667 per share and 6,905,248 shares were issued and outstanding immediately after the reverse stock split. The Company has retroactively adjusted all shares and per share data for all the periods presented.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Prior to the reorganization, Powerbridge Zhuhai&#x2019;s equity interests were held by the former shareholders through an investment holding company, of which the Controlling Shareholders owned 84.9% of equity interest of Powerbridge Zhuhai. Powerbridge Zhuhai was incorporated on October 30, 1997 in Zhuhai, Guangdong province under the laws of the People&#x2019;s Republic of China (the &#x201c;PRC&#x201d; or &#x201c;China&#x201d;). Powerbridge Zhuhai is an operating subsidiary that provides global trade software application and technology services to corporate and government customers located in the PRC. Beijing Powerbridge Technology Co., Ltd. (&#x201c;Powerbridge Beijing&#x201d;), a company conducting engineering and IT research and development activities, was incorporated on September 28, 2017 in Beijing under the laws of PRC, with Powerbridge Zhuhai owning 55% and Mr. Tianfei Feng owning 45% of equity interest. Since inception, Powerbridge Zhuhai and Mr. Tianfei Feng have only made nominal investments in Powerbridge Beijing and no substantial business operations have occurred; as a result, Powerbridge Zhuhai and Mr. Tianfei Feng agreed to deregister the entity. Mr. Tianfei Feng later became the Company&#x2019;s Chief Research and Development Officer and the technology research and development activities originally conducted in Powerbridge Beijing are now conducted through the Beijing branch of Powerbridge Zhuhai. Powerbridge Beijing was deregistered on October 25, 2018.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 7, 2018, the former shareholders transferred their 100% ownership interest in Powerbridge Zhuhai to Powerbridge HK, which is 100% owned by Powerbridge. After the reorganization, Powerbridge owns 100% equity interests of Powerbridge HK and Powerbridge Zhuhai. All shareholders have the same ownership interest in Powerbridge as in Powerbridge Zhuhai prior to the reorganization.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Since the Company and its subsidiaries are effectively controlled by the same group of the shareholders before and after the reorganization, they are considered under common control. The above mentioned transactions were accounted for as a recapitalization. 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(&#x201c;Powerbridge HK&#x201d;)</td><td style="width: 1%">&#xa0;</td> <td style="vertical-align: top; width: 1%; text-align: right">&#xa0;</td><td style="vertical-align: top; width: 9%; text-align: right">100</td><td style="vertical-align: top; width: 1%; text-align: left">%</td><td style="width: 1%">&#xa0;</td> <td style="vertical-align: top; width: 15%; text-align: center">July 27, 2018</td><td style="width: 1%">&#xa0;</td> <td style="vertical-align: top; width: 15%; text-align: center">Hong Kong, PRC</td><td style="width: 1%">&#xa0;</td> <td style="vertical-align: top; width: 15%; text-align: left; padding-left: 0">Investment holding</td></tr> <tr style="vertical-align: bottom; "> <td style="vertical-align: top; text-align: left">Hongding Technology Co., Ltd</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: right">&#xa0;</td><td style="vertical-align: top; text-align: right">100</td><td style="vertical-align: top; text-align: left">%</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">July 28, 2020</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">Hong Kong, PRC</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: left; padding-left: 0">Investment holding</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="vertical-align: top; text-align: left">Zhuhai Powerbridge Technologies Co., Ltd. (&#x201c;Powerbridge Zhuhai&#x201d;)</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: right">&#xa0;</td><td style="vertical-align: top; text-align: right">100</td><td style="vertical-align: top; text-align: left">%</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">October 30, 1997</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">the PRC</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: left; padding-left: 0">software application and technology services</td></tr> <tr style="vertical-align: bottom; "> <td style="vertical-align: top; text-align: left">Shenzhen Hongding Interconnect Technology Co., Ltd</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: right">&#xa0;</td><td style="vertical-align: top; text-align: right">100</td><td style="vertical-align: top; text-align: left">%</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">October 21, 2020</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">the PRC</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: left; padding-left: 0">software application and technology services</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="vertical-align: top; text-align: left">Shantou Hongrui Information Tehcnology Co., Ltd.&#xa0;&#xa0;(&#x201c;Shantou Hongrui&#x201d;)*</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: right">&#xa0;</td><td style="vertical-align: top; text-align: right">38</td><td style="vertical-align: top; text-align: left">%</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">On August 19, 2019</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">the PRC</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: left; padding-left: 0">software application and technology services</td></tr> <tr style="vertical-align: bottom; "> <td style="vertical-align: top; text-align: left">Ningbo Powerbridge Pet Product Cross-border E-Commerce Service Co., Ltd.&#xa0;&#xa0;&#xa0;(&#x201c;Ningbo Powerbridge&#x201d;)</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: right">&#xa0;</td><td style="vertical-align: top; text-align: right">60</td><td style="vertical-align: top; text-align: left">%</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">September 29, 2019</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">the PRC</td><td>&#xa0;</td> <td style="text-align: left; padding-left: 0; vertical-align: top">E-commerce</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="vertical-align: top; text-align: left">Shenzhen Honghao Internet Technology Co., Ltd (&#x201c;Honghao&#x201d;)</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: right">&#xa0;</td><td style="vertical-align: top; text-align: right">100</td><td style="vertical-align: top; text-align: left">%</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">July 28, 2020</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">the PRC</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: left; padding-left: 0">software application and technology services</td></tr> <tr style="vertical-align: bottom; "> <td style="vertical-align: top; text-align: left">Wuhan Honggang Tehcnology Co., Ltd (&#x201c;Honggang&#x201d;)</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: right">&#xa0;</td><td style="vertical-align: top; text-align: right">60</td><td style="vertical-align: top; text-align: left">%</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">June 21, 2019</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">the PRC</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: left; padding-left: 0">software application and technology services</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="vertical-align: top; text-align: left">Chongqing Powerbridge Zhixin Technology Co., Ltd* (&#x201c;Zhixin&#x201d;)</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: right">&#xa0;</td><td style="vertical-align: top; text-align: right">45</td><td style="vertical-align: top; text-align: left">%</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">September 2, 2019</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">the PRC</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: left; padding-left: 0">software application and technology services</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">* Certain third-party shareholders of Shantou Hongrui and Zhixin signed consents with the Company for the year ended December 31, 2020, which stated that the Company has the power and control to direct the activities that most significantly impact Shantou Hongrui and Zhixin and they unconditionally vote by consensus with the Company in all the board decisions. As such, the Company consolidates the financial results of Shantou Hongrui and Zhixin based on the voting power.</p><br/> 2012500 5.00 262500 5.00 10062500 8021987 11508747 0.001 ratio of 1-0.6. 30000000 6905248 6905248 0.849 0.55 0.45 1.00 1.00 1.00 <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; text-align: left; vertical-align: bottom"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#xa0;</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Major subsidiaries</b></p></td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; vertical-align: bottom; font-weight: bold; text-align: center">Percentage of<br/> Ownership</td><td style="text-align: left; padding-bottom: 1.5pt; font-weight: bold; vertical-align: top">&#xa0;</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; font-weight: bold; text-align: center">Date of<br/> Incorporation</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; font-weight: bold; text-align: center">Place of<br/> Incorporation</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; padding-left: 0; font-weight: bold; text-align: center">Major Operation</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="vertical-align: top; width: 40%; text-align: left">Powerbridge Technologies Co., Ltd. (&#x201c;Powerbridge HK&#x201d;)</td><td style="width: 1%">&#xa0;</td> <td style="vertical-align: top; width: 1%; text-align: right">&#xa0;</td><td style="vertical-align: top; width: 9%; text-align: right">100</td><td style="vertical-align: top; width: 1%; text-align: left">%</td><td style="width: 1%">&#xa0;</td> <td style="vertical-align: top; width: 15%; text-align: center">July 27, 2018</td><td style="width: 1%">&#xa0;</td> <td style="vertical-align: top; width: 15%; text-align: center">Hong Kong, PRC</td><td style="width: 1%">&#xa0;</td> <td style="vertical-align: top; width: 15%; text-align: left; padding-left: 0">Investment holding</td></tr> <tr style="vertical-align: bottom; "> <td style="vertical-align: top; text-align: left">Hongding Technology Co., Ltd</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: right">&#xa0;</td><td style="vertical-align: top; text-align: right">100</td><td style="vertical-align: top; text-align: left">%</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">July 28, 2020</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">Hong Kong, PRC</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: left; padding-left: 0">Investment holding</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="vertical-align: top; text-align: left">Zhuhai Powerbridge Technologies Co., Ltd. (&#x201c;Powerbridge Zhuhai&#x201d;)</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: right">&#xa0;</td><td style="vertical-align: top; text-align: right">100</td><td style="vertical-align: top; text-align: left">%</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">October 30, 1997</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">the PRC</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: left; padding-left: 0">software application and technology services</td></tr> <tr style="vertical-align: bottom; "> <td style="vertical-align: top; text-align: left">Shenzhen Hongding Interconnect Technology Co., Ltd</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: right">&#xa0;</td><td style="vertical-align: top; text-align: right">100</td><td style="vertical-align: top; text-align: left">%</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">October 21, 2020</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">the PRC</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: left; padding-left: 0">software application and technology services</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="vertical-align: top; text-align: left">Shantou Hongrui Information Tehcnology Co., Ltd.&#xa0;&#xa0;(&#x201c;Shantou Hongrui&#x201d;)*</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: right">&#xa0;</td><td style="vertical-align: top; text-align: right">38</td><td style="vertical-align: top; text-align: left">%</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">On August 19, 2019</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">the PRC</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: left; padding-left: 0">software application and technology services</td></tr> <tr style="vertical-align: bottom; "> <td style="vertical-align: top; text-align: left">Ningbo Powerbridge Pet Product Cross-border E-Commerce Service Co., Ltd.&#xa0;&#xa0;&#xa0;(&#x201c;Ningbo Powerbridge&#x201d;)</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: right">&#xa0;</td><td style="vertical-align: top; text-align: right">60</td><td style="vertical-align: top; text-align: left">%</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">September 29, 2019</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">the PRC</td><td>&#xa0;</td> <td style="text-align: left; padding-left: 0; vertical-align: top">E-commerce</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="vertical-align: top; text-align: left">Shenzhen Honghao Internet Technology Co., Ltd (&#x201c;Honghao&#x201d;)</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: right">&#xa0;</td><td style="vertical-align: top; text-align: right">100</td><td style="vertical-align: top; text-align: left">%</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">July 28, 2020</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">the PRC</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: left; padding-left: 0">software application and technology services</td></tr> <tr style="vertical-align: bottom; "> <td style="vertical-align: top; text-align: left">Wuhan Honggang Tehcnology Co., Ltd (&#x201c;Honggang&#x201d;)</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: right">&#xa0;</td><td style="vertical-align: top; text-align: right">60</td><td style="vertical-align: top; text-align: left">%</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">June 21, 2019</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">the PRC</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: left; padding-left: 0">software application and technology services</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="vertical-align: top; text-align: left">Chongqing Powerbridge Zhixin Technology Co., Ltd* (&#x201c;Zhixin&#x201d;)</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: right">&#xa0;</td><td style="vertical-align: top; text-align: right">45</td><td style="vertical-align: top; text-align: left">%</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">September 2, 2019</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: center">the PRC</td><td>&#xa0;</td> <td style="vertical-align: top; text-align: left; padding-left: 0">software application and technology services</td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">* Certain third-party shareholders of Shantou Hongrui and Zhixin signed consents with the Company for the year ended December 31, 2020, which stated that the Company has the power and control to direct the activities that most significantly impact Shantou Hongrui and Zhixin and they unconditionally vote by consensus with the Company in all the board decisions. As such, the Company consolidates the financial results of Shantou Hongrui and Zhixin based on the voting power.</p> 1.00 2018-07-27 Hong Kong, PRC Investment holding 1.00 2020-07-28 Hong Kong, PRC Investment holding 1.00 1997-10-30 the PRC software application and technology services 1.00 2020-10-21 the PRC software application and technology services 0.38 2019-08-19 the PRC software application and technology services 0.60 2019-09-29 the PRC E-commerce 1.00 2020-07-28 the PRC software application and technology services 0.60 2019-06-21 the PRC software application and technology services 0.45 2019-09-02 the PRC software application and technology services <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 2 &#x2014; Summary of significant accounting policies</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Basis of presentation</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (&#x201c;U.S. GAAP&#x201d;) and pursuant to the rules and regulations of the Securities Exchange Commission (&#x201c;SEC&#x201d;).&#xa0;</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Principles of consolidation</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The consolidated financial statements include the financial statements of the Company and its subsidiaries. All intercompany transactions and balances are eliminated upon consolidation. All significant intercompany transactions and balances between the Company and its subsidiaries are eliminated upon consolidation.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of&#xa0;directors.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Non-controlling interest represents the portion of the net assets of a subsidiaries attributable to interests that are not owned by the Company. The non-controlling interest is presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Non-controlling interest&#x2019;s operating result is presented on the face of the consolidated statements of income and comprehensive income as an allocation of the total income for the year between non-controlling shareholders and the shareholders of the Company.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Liquidity </font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the year ended December 31, 2020, the Company had working capital of $1.3 million and incurred a net loss of $18.4 million. For fiscal 2020, the Company had operation cash flow of $1.1 million. The Company has historically funded its working capital needs primarily from public offering, operations, bank loans, advance payments from customers and shareholders. The working capital requirements are affected by the efficiency of operations, the numerical volume and dollar value of revenue contracts, the progress or execution on customer contracts, and the timing of accounts receivable collections. The COVID-19 pandemic created significant economic uncertainty and volatility in the credit and capital markets since December 2019. Many customers have delayed their payments to the Company, which caused the significant increase in the Company&#x2019;s aged accounts receivable balance over one year in fiscal 2019. In early 2020, Chinese government took strict and efficient measures to control and eliminate the spreading of COVID-19 pandemic and many of our customers started to reopen business and bring operation to normal level in the second half of 2020. After evaluating the age of the balance, the customer&#x2019;s payment history, current credit-worthiness, and current economic trends, the Company reduced the provision for doubtful accounts for fiscal 2020.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In assessing its liquidity, the Company monitors and analyzes its cash on hand, its ability to generate sufficient revenue sources in the future and its operating and capital expenditure commitments. As of December 31, 2020, the Company had cash of approximately $8.4 million. To support its working capital, the Company entered into several securities purchase agreement in 2021. On January 8, 2021, the Company entered into a securities purchase agreement with Uptown Capital, LLC, pursuant to which the Company issued an unsecured promissory note on in the original principal amount of $1,650,000, convertible into ordinary shares, par value $0.00166667 per share, of the Company, for $1,500,000 in gross proceeds. On February 23, 2021, the Company entered into a Sales Agreement with A.G.P./Alliance Global Partners, as sales agent, pursuant to which the Company may offer and sell up to $30,000,000 of its ordinary shares, par value $0.00166667 per share. On April 9, 2021, the Company entered into a securities purchase agreement with YA II PN, LTD., pursuant to which the Company sells convertible notes in the principal amount of US$7,000,000 and a warrant to purchase 571,429 Ordinary Shares, for gross proceeds of approximately US$6,790,000. The Company believes that its cash on hand and financing cash flows will be sufficient to fund its operations over at least the next 12 months from the date of this report. However, the Company may need additional cash resources in the future if the Company experiences changed business conditions or other developments, and may also need additional cash resources in the future if the Company wishes to pursue opportunities for investment, acquisition, strategic cooperation or other similar actions. If it is determined that the cash requirements exceed the Company&#x2019;s amounts of cash on hand, the Company may seek to issue debt or equity securities or obtain a credit facility.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Use of estimates</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company&#x2019;s consolidated financial statements include but not limited to the useful lives of property and equipment and capitalized development cost, impairment of long-lived assets, valuation of accounts receivables, loans to third parties, revenue recognition and realization of deferred tax assets and uncertain tax positions. Actual results could differ from these estimates.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Foreign currency translation</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The functional currencies of the Company are the local currency of the county in which the subsidiaries operates. The Company&#x2019;s financial statements are reported using U.S. Dollars. The results of operations and the consolidated statements of cash flows denominated in foreign currencies are translated at the average rates of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currencies is translated at the historical rates of exchange at the time of capital contributions. Because cash flows are translated based on the average translation rates, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income (loss) included in consolidated statements of changes in equity. Gains and losses from foreign currency transactions are included in the consolidated statement of operations and comprehensive income (loss).</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Fair value measurement</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">ASC 825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">&#x25cf;</font></td> <td style="text-align: justify"><font style="font-size: 10pt">Level 1 &#x2014; inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.</font></td></tr> </table><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">&#x25cf;</font></td> <td style="text-align: justify"><font style="font-size: 10pt">Level 2 &#x2014; inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data.</font></td></tr> </table><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">&#x25cf;</font></td> <td style="text-align: justify"><font style="font-size: 10pt">Level 3 &#x2014; inputs to the valuation methodology are unobservable.</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unless otherwise disclosed, the fair value of the Company&#x2019;s financial instruments including cash, notes and accounts receivable, due from related parties, prepayments, deposits and other current assets, notes and accounts payable, customer deposits, salaries and benefits payables, due to related party and taxes payable approximates their recorded values due to their short-term maturities. The fair value of the long-term prepayments, deposits and other assets and loans to third parties approximate their carrying amounts because the deposits were paid in cash.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company elected the fair value option to account for its convertible loan. The Company engaged an independent valuation firm to perform the valuation. The fair value of the convertible loans is calculated using the binomial tree model. The convertible loans are classified as level 3 instruments as the valuation was determined based on unobservable inputs which are supported by little or no market activity and reflect the Company&#x2019;s own assumptions in measuring fair value. Significant estimates used in developing the fair value of the convertible loans include time to maturity, risk-free interest rate, straight debt discount rate, probability to convert and expected timing of conversion. Refer to Note 9 for additional information.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As the inputs used in developing the fair value for level 3 instruments are unobservable, and require significant management estimate, a change in these inputs could result in a significant change in the fair value measurement.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following is a reconciliation of the beginning and ending balances for convertible loans measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of December 31, 2020:</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: right">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Opening balance</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="width: 88%; text-align: left">Issuance of convertible loan</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">50,000,000</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Loss on change in fair value of convertible loan</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">15,258,333</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Conversion of convertible loan</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(65,258,333</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">Total</td><td style="font-weight: bold; padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">-</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Cash and cash equivalent</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Cash and cash equivalent comprise cash at banks and on hand, which includes deposits with original maturities of three months or less with commercial banks in PRC. As of December 31, 2020 and 2019, cash balances were $8,389,704 and $5,772,055, respectively.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Restricted cash</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Restricted cash mainly represents security deposits as required by certain customers on the Company&#x2019;s projects. The deposits in restricted bank accounts cannot be withdrawn until the Company completes the related projects. Restricted cash is classified as either current or non-current based on when the funds will be released in accordance with the terms of the respective agreements. As of December 31, 2020 and 2019, restricted cash consists of cash equivalents of $nil and $172,369 used as collateral to secure bank borrowings (Note 8). The Company is required to keep certain amounts on deposit that are subject to withdrawal restrictions. Upon the maturity of the bank borrowings, the Company is required to deposit the remainder to the escrow account to settle the bank borrowings. The bank borrowings are generally short term in nature due to their short maturity period of three months to one year; thus, the related restricted cash is classified as a current asset.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Accounts receivable, net</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Accounts receivable, net, is stated at the original invoiced amount net of write-offs and allowance for doubtful accounts. The Company reviews the accounts receivable on a periodic basis and makes allowances when there is doubt as to the collectability of individual balances. Past-due balances over 90 days are reviewed individually for collectability. In evaluating the collectability of individual accounts receivable balances, the Company considers several factors, including the age of the balance, the customer&#x2019;s payment history, current credit-worthiness, and current economic trends. Accounts receivable balances are written off after all collection efforts have been exhausted. Typically, the Company includes unbilled receivables in accounts receivable for contracts on which revenue has been recognized, but for which the customer has not yet been billed. Unbilled receivables, substantially all of which are expected to be billed within one year are stated at their estimated realizable value and consist of costs and fees billable on contract completion or the occurrence of contractual payment phase.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Notes receivable</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Notes receivable represents guaranteed bank drafts that are non-interest bearing and due within six months. Such bank drafts have been arranged by certain customers with the related financial institutions to settle their purchases from the Company. The carrying amount of notes receivable approximates fair value.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Prepayments, deposits and other assets, net</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Prepayment, deposit and other assets, net, primarily consists of advances to suppliers for purchasing goods or services that have not been received or provided; security deposits made to our customers; advances to employees and loan receivables from business partners. Prepayment, deposit and other assets are classified as either current or non-current based on the terms of the respective agreements. These advances are unsecured and are reviewed periodically to determine whether their carrying value has become impaired.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Property and equipment, net</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Property and equipment, net, mainly comprise furniture and furniture, vehicles, computer and equipment are stated at cost less accumulated depreciation and impairment. Property and equipment are depreciated over the estimated useful lives of the assets on a straight-line basis, after considering the estimated residual value.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The estimated useful lives are as follows:</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom; "> <td style="width: 84%; text-align: justify">&#xa0;</td> <td style="width: 1%; text-align: justify">&#xa0;</td> <td style="border-bottom: black 1.5pt solid; width: 15%; text-align: center"><font style="font-size: 10pt"><b>Useful Life</b></font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Office equipment, fixtures and furniture</font></td> <td style="text-align: justify">&#xa0;</td> <td style="text-align: center"><font style="font-size: 10pt"><b>3-10 years</b></font></td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify"><font style="font-size: 10pt">Automobiles</font></td> <td style="text-align: justify">&#xa0;</td> <td style="text-align: center"><font style="font-size: 10pt"><b>5-8 years</b></font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Capitalized development costs and software acquired</font></td> <td style="text-align: justify">&#xa0;</td> <td style="text-align: center"><font style="font-size: 10pt"><b>5-10 years</b></font></td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify"><font style="font-size: 10pt">Computer equipment</font></td> <td style="text-align: justify">&#xa0;</td> <td style="text-align: center"><font style="font-size: 10pt"><b>5 years</b></font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and the related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is charged to the statement of income and comprehensive income.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Capitalized development costs</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company follows the provisions of Accounting Standards Codification (&#x201c;ASC&#x201d;) 350-40, &#x201c;Internal Use Software.&#x201d; ASC 350-40 provides guidance on capitalization of the costs incurred for computer software developed or obtained for internal use. The Company expenses all costs incurred during the preliminary project stage of its development, and capitalizes costs incurred during the application development stage. Costs incurred relating to upgrades and enhancements to the application are capitalized if it is determined that these upgrades or enhancements add additional functionality to the application. The capitalized development cost is amortized on a straight-line basis over the estimated useful life, which is generally five years. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Impairment for long-lived assets</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Long-lived assets, including property, equipment, furniture and fixtures and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. When these events occur, the Company measures impairment by comparing the carrying values of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amounts of the assets, the Company would recognize an impairment loss based on the excess of the carrying value over the assessed discounted cash flow amount. For the years ended December 31, 2020, 2019 and 2018, the Company recognized nil impairment for the long-lived assets.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Revenue recognition</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company adopted ASC Topic 606 Revenue from Contracts with Customers (&#x201c;ASC 606&#x201d;) on January 1, 2019 using the modified retrospective approach. Revenues for the year ended December 31, 2019 were presented under ASC 606, and revenues for the years ended December 31, 2018 were not adjusted and continue to be presented under ASC Topic 605, Revenue Recognition. There is no adjustment to the opening balance of retained earnings at January 1, 2019 since there was no change to the timing and pattern of revenue recognition upon adoption of ASC 606. Under ASC 606, revenue is recognized when control of promised goods or services is transferred to the Company&#x2019;s customers in an amount of consideration to which an entity expects to be entitled to in exchange for those goods or services and is recorded net of value-added tax (&#x201c;VAT&#x201d;).To achieve that core principle, the Group applies the following steps:</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Step 1: Identify the contract (s) with a customer</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Step 2: Identify the performance obligations in the contract</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Step 3: Determine the transaction price</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Step 4: Allocate the transaction price to the performance obligations in the contract</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company derives its revenues from three sources: (1) revenue from application development services, (2) revenue from consulting and technical support services, and (3) revenue from subscription services. All of the Company&#x2019;s contracts with customer do not contain cancelable and refund-type provisions.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(1) Revenue from application development service</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&#x2019;s application development service contracts are primarily on a fixed-price basis, which require the Company to perform services including project planning, project design, application development and system integration based on customers&#x2019; specific needs. These services also require significant production and customization. Upon delivery of the services, customer acceptance is generally required. In the same contract, the Company is generally required to provide post-contract customer support (&#x201c;PCS&#x2019;) for a period from three months to three years (&#x201c;PCS period&#x201d;) after the customized application development services are delivered. The type of services for PCS clause is generally not specified in the contracts or as stand-ready services on when-and-if-available basis. The unspecified PCS is stand-ready service on when-and-if-available basis. It grants the customers on line and telephone access to technical support personnel during the term of the service. Specified PCS includes specified service term in the contract such as training.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&#x2019;s application development service revenues are generated primarily from contracts with PRC government or related agencies and state-owned enterprises. The contracts contain negotiated billing terms which generally include multiple payment phases throughout the contract term and a significant portion (30% - 50%) of contract amount usually is billed upon the completion of the related projects. Pursuant to the contract terms, the Company has enforceable right on payments for the work performed.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company sometimes provides a warranty for its application development service contracts. The warranty period is typically 12-36 months upon the completion of the application development service. In accordance with ASC 606-10-25-19, the Company believes the warranty provision in the contracts generally represents service-type warranty, which is a distinct performance obligation and the Company also provides the similar service on standalone basis and customers can benefit from the related service-type warranty service. For the service warranty component, the customer simultaneously receives and consumes the benefits provided by the company performance over the warranty term, therefore, the service warranty is satisfied over time. The revenue allocated to the service warranty is recognized over the warranty period.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company assesses that application development service, PCS or specific service and service-type warranty service, if applicable, are distinct performance obligations in the application development service contracts. The Company provides these services on standalone basis and customers are able to benefit from each of the service on its own. In addition, the timing of delivery of these performance obligations can be separately identifiable in the contracts. The transaction price is allocated to these identified performance obligations based on the relative standalone selling prices. The transaction price allocated to PCS or unspecific service and service-type warranty, if applicable, on a straight-line method over the contractual period. Revenue allocated to specified PCS is recognized as the related services are rendered. The transaction price allocated to application development service is recognized over time as the Company&#x2019;s performance creates or enhances the project controlled by the customer and the control is transferred continuously to our customers. The Company uses an input method based on cost incurred as the Company believes that this method most accurately reflects the Company&#x2019;s progress toward satisfaction of the performance obligation, which usually takes less than one year. Under this method, the transaction price allocated to application development service is recognized as work is performed based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligations.&#xa0;</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Incurred costs include all direct material, labor and subcontract costs, and those indirect costs related to application development performance, such as indirect labor, supplies, and tools. Cost-based input method requires the Company to make estimates of revenues and costs to complete the construction. In making such estimates, significant judgment is required to evaluate assumptions related to the costs to complete the application development, including materials, labor, and other system costs. The Company&#x2019;s estimates are based upon the professional knowledge and experience of our engineers and project managers to assess the contract&#x2019;s schedule, performance, technical matters. The Company has adequate cost history and estimating experience, and with respect to which management believes it can reasonably estimate total development costs. If the estimated costs are greater than the related revenues, the Company recognizes the entire estimated loss in the period the loss becomes known and can be reasonably estimated. Changes in estimates for application development services include but not limited to cost forecast changes and change orders. The cumulative effect of changes in estimates is recorded in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated. To date, the Company has not incurred a material loss on any contracts. However, as a policy, provisions for estimated losses on such engagements will be made during the period in which a loss becomes probable and can be reasonably estimated. If contract modifications result in additional goods or services that are distinct from those transferred before the modification, they are accounted for prospectively as if the Company entered into a new contract. If the goods or services in the modification are not distinct from those in the original contract, sales and gross profit are adjusted using the cumulative catch-up method for revisions in estimated total contract costs and contract values.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In certain application development service arrangements, the Company sells and delivers IT equipment on standalone basis prior to the delivery of the services. In these cases, the Company controls the IT equipment before they are transferred to the customer. The Company has the right to direct the suppliers and control the goods or assets transferred to its customers. Thus, the Company considers it should recognize revenue as a principal in the gross amount of consideration to which it is entitled in exchange for the IT equipment delivered. The Company assesses the sale of equipment is separately identifiable from other promises in the contract and it is distinct performance obligation within the context of the contract. Accordingly, the revenue from the related IT equipment based on its relative standalone selling price is recognized upon customer acceptance after delivery.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(2) Revenue from consulting and technical support services</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Revenue from consulting and technical support services is primarily comprised of fixed-fee contracts, which require the Company to provide professional consulting and technical support services over contract terms beginning on the commencement date of each contract, which is the date its service is made available to customers. Billings to the customers are generally on a monthly or quarterly basis over the contract term, which is typically 12 to 24 months. The consulting and technical support services contracts typically include a single performance obligation. The revenue from consulting and technical support services is recognized over the contract term on a straight-line basis as customers receive and consume benefits of such services.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(3) Revenue from subscription services</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Revenue from subscription services is comprised of subscription fees from customers accessing the Company&#x2019;s software-as-a-service applications for a subscribed period. The Company&#x2019;s monthly or quarterly billing to customer is on the basis of number of uses or the actual usage by the customers. The subscription arrangements are considered service contracts because customers does not have the right to take possession of the software and can only benefit from the software when provided the right to access the software. Accordingly, the subscription services contracts typically include a single performance obligation. The revenue from subscription services is recognized over the contract term on a straight-line basis or based on the actual usage as customers receive and consume benefits of such services.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Revenue includes reimbursements of travel and out-of-pocket expense, with equivalent amounts of expense recorded in cost of revenue. The Company reports revenues net of value added tax (&#x201c;VAT&#x201d;). The Company&#x2019;s subsidiary in PRC are subject to a 6% to 13% value added tax (&#x201c;VAT&#x201d;) and related surcharges on the revenues earned from providing services.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Practical Expedient and Exemptions</i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company does not disclose the value of unsatisfied performance obligations within one year by applying the right to invoice practical expedient provided by ASC 606-10-55-18.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><i><font style="text-decoration:underline">Contract costs</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Contract costs include contract acquisition costs and contract fulfillment costs which are all recorded within prepayments, deposits, and other assets in the consolidated balance sheets.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Contract acquisition costs&#xa0;consist of incremental costs incurred by the Company to originate contracts with customers. Contract acquisition costs, which generally include costs that are only incurred as a result of obtaining a contract, are capitalized when the incremental costs are expected to be recovered over the contract period. All other costs incurred regardless of obtaining a contract are expensed as incurred. Contract acquisition costs are amortized over the period the costs are&#xa0;expected to contribute directly or indirectly to future cash flows, which is generally&#xa0;over the contract term, on a basis consistent with the transfer of goods or services to the customer to which the costs relate. Contract fulfillments costs&#xa0;consist of costs incurred by the Company to fulfill a contract with a customer and are capitalized when the costs generate or enhance resources that will be used in satisfying future performance obligations of the contract and the costs are expected to be recovered. Capitalized contract fulfillment costs generally include&#xa0;contracted services, direct labor, materials, and allocable overhead directly related to resources required to fulfill the contract.&#xa0;Contract fulfillment costs are recognized in cost of revenue during the period that the related costs are expected to contribute directly or indirectly to future cash flows, which is generally over the contract term, on a basis consistent with the transfer of goods or services to the customer to which the costs are related. The contract fulfillment cost amounted to $4,041,585 and $2,999,411 as of December 31, 2020 and 2019, respectively. There was no contract acquisition costs as of December 31, 2020 and 2019.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><i><font style="text-decoration:underline">Contract balance</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accounts receivable includes both unbilled accounts receivable and billed accounts receivable. The Company records unbilled accounts receivable for revenue that has been recognized in advance of billing the customer, which is common for application development service contracts. The unbilled accounts receivable represents the Company&#x2019;s right to consideration in exchange for the service that the Company has performed to the customer before payment is due and the unbilled account receivable will be reclassified into billed accounts receivable when the Company has the right to invoice. Contract liabilities are presented as customer deposits and deferred revenue on the consolidated balance sheet. Contract liabilities relate to payments received in advance of completion of performance obligations under a contract. Contract liabilities are recognized as revenue upon the completion of performance obligations. As of December 31, 2020 and 2019, the balance of customer deposits amounted to $573,243 and $270,793, respectively. As of December 31, 2020 and 2019, the balance of deferred revenue amounted to $1,095,279 and $869,396, respectively.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Government subsidies</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Government subsidies mainly represent amounts granted by local government authorities as an incentive for companies to promote development of the local technology industry. The Company receives government subsidies related to government sponsored projects, and records such government subsidies as a liability when it is received. The Company records government subsidies as other income when there is no further performance obligation.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Advertising expenditures</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Advertising expenditures are expensed as incurred and such expenses were minimal for the periods presented. Advertising expenditures have been included as part of selling and marketing expenses. For the years ended December 31, 2020, 2019 and 2018, the advertising expense amounted to $53,445, $61,174 and 21,168, respectively.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Operating leases</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A lease for which substantially all the benefits and risks incidental to ownership remain with the lessor is classified by the lessee as an operating lease. All leases of the Company are currently classified as operating leases. The Company records the total expenses on a straight-line basis over the lease term.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Income taxes</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">An uncertain tax position is recognized as a benefit only if it is &#x201c;more likely than not&#x201d; that the tax position would be sustained in a tax examination. The 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 &#x201c;more likely than not&#x201d; test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. No significant penalties or interest relating to income taxes have been incurred during the years ended December 31, 2020, 2019 and 2018. All of the tax returns of the Company&#x2019;s subsidiary in China remain subject to examination by the tax authorities for five years from the date of filing.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Value added tax </font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Revenue represents the invoiced value of service, net of VAT. The VAT is based on gross sales price and VAT rates range up to 13%, depending on the type of service provided. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in taxes payable. All of the VAT returns filed by the Company&#x2019;s subsidiary in China, have been and remain subject to examination by the tax authorities for five years from the date of filing.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Employee defined contribution plan</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Full time employees of the Company in the PRC participate in a government mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require that the Company make contributions to the government for these benefits based on a certain percentage of the employee&#x2019;s salaries. The Company has no legal obligation for the benefits beyond the contributions. The total amount was expensed as incurred.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">(Loss) earnings per share</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company computes (loss) earnings per share (&#x201c;EPS&#x201d;) in accordance with ASC 260, &#x201c;Earnings per Share&#x201d;. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common share outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential Ordinary Shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential Ordinary Shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the year ended December 31, 2020 and 2019, since the company had a loss, basic and dilutive loss per share are the same. For the years ended December 31, 2018, there were nil potential dilutive ordinary shares.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Share-Based compensation</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company accounts for share-based awards to employees and nonemployees directors and consultants in accordance with the provisions of ASC 718, Compensation&#x2014;Stock Compensation, and under the recently issued guidance following FASB&#x2019;s pronouncement, ASU 2018-07, Compensation&#x2014;Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. Under ASC 718, and applicable updates adopted, for employee stock-based awards, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting on a straight-line basis over the requisite service period for the entire award. For the non-employee stock-based awards, the fair value of the awards to non-employees are measured every reporting period based on the value of the Company&#x2019;s common stock.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Comprehensive income (loss)</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under U.S. GAAP are recorded as an element of shareholders&#x2019; equity but are excluded from net income. Other comprehensive income (loss) consists of a foreign currency translation adjustment resulting from the Company not using the U.S. dollar as its functional currencies.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Statement of Cash Flows</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In accordance with ASC 230, &#x201c;Statement of Cash Flows,&#x201d; cash flows from the Company&#x2019;s operations are formulated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Commitments and Contingencies</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the normal course of business, the Company is subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters, such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments including historical and the specific facts and circumstances of each matter.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Segment reporting </font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.45pt">The Company&#x2019;s chief operating decision maker (&#x201c;CODM&#x201d;) has been identified as its CEO, who reviews the consolidated results when making decisions about allocating resources and assessing performance of the Company as a whole and hence, the Company has only one reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. The Company&#x2019;s long-lived assets are substantially all located in the PRC and all of the Company&#x2019;s revenues are derived from the PRC. Therefore, no geographical segments are&#xa0;presented.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Concentrations of Risks</font></p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">(a)</font></td> <td style="text-align: justify"><font style="font-size: 10pt">Concentration of credit risk</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Assets that potentially subject the Company to significant concentration of credit risk primarily consist of cash, restricted cash, accounts receivable and other current assets. The maximum exposure of such assets to credit risk is their carrying amounts as at the balance sheet dates. As of December 31, 2020 and 2019, the aggregate amount of cash and restricted cash of $8,365,573 and $5,606,425, respectively, were held at major financial institutions in PRC, which the management believes are of high credit quality. On May&#xa0;1, 2015, China&#x2019;s new Deposit Insurance Regulation came into effect, pursuant to which banking financial institutions, such as commercial banks, established in China are required to purchase deposit insurance for deposits in RMB and in foreign currency placed with them. Such Deposit Insurance Regulation would not be effective in providing complete protection for the Group&#x2019;s accounts, as its aggregate deposits are much higher than the compensation limit. However, the Group believes that the risk of failure of any of these Chinese banks is remote. Bank failure is uncommon in China and the Group believes that those Chinese banks are financially sound based on public available information. The Company conducts credit evaluations of its customers and suppliers, and generally does not require collateral or other security from them. The Company establishes an accounting policy for allowance for doubtful accounts on the individual customer&#x2019;s and supplier&#x2019;s financial condition, credit history, and the current economic conditions.</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">(b)</font></td> <td style="text-align: justify"><font style="font-size: 10pt">Foreign currency risk</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A majority of the Company&#x2019;s expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries&#x2019; assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People&#x2019;s Bank of China (&#x201c;PBOC&#x201d;). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&#x2019;s functional currency is the RMB, and the Company&#x2019;s financial statements are presented in U.S. dollars. The RMB depreciated by 1.3% in fiscal year 2019 and appreciated by 6.3% in fiscal year 2020. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. The change in the value of the RMB relative to the U.S. dollar may affect our financial results reported in the U.S. dollar terms without giving effect to any underlying changes in our business or results of operations. Currently, our assets, liabilities, revenues and costs are denominated in RMB. To the extent that the Company needs to convert U.S. dollars into RMB for capital expenditures and working capital and other business purposes, appreciation of RMB against U.S. dollar would have an adverse effect on the RMB amount the Company would receive from the conversion. Conversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making payments for dividends, strategic acquisition or investments or other business purposes, appreciation of U.S. dollar against RMB would have a negative effect on the U.S. dollar amount available to the Company.</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">(c)</font></td> <td style="text-align: justify"><font style="font-size: 10pt">Significant customers</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the year ended December 31, 2020, one customer accounted for 25.7% of the Company&#x2019;s total revenues. For the year ended December 31, 2019, two customers accounted 21.8% and 10.7% of the Company&#x2019;s total revenues. For the year ended December 31, 2018, no customer accounted for more than 10% of the Company&#x2019;s total revenues. As of December 31, 2020, no customer accounted for more than 10% of the Company&#x2019;s accounts receivable. As of December 31, 2019, one customer accounted 12.8% of the Company&#x2019;s accounts receivable.</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">(d)</font></td> <td style="text-align: justify"><font style="font-size: 10pt">Significant suppliers</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the year ended December 31, 2020, one supplier accounted for 21.3% of the Company&#x2019;s total purchases. For the year ended December 31, 2019, one supplier accounted for 22.7% of the Company&#x2019;s total purchases. For the year ended December 31, 2018, three suppliers accounted for 12.9%, 11.2% and 10.3% of the Company&#x2019;s total purchases. As of December 31, 2020, one supplier accounted for 11.9% of the Company&#x2019;s total accounts payable. As of December 31, 2019, one supplier accounted for 11.4% of the Company&#x2019;s total accounts payable.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Recently issued accounting pronouncements</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company considers the applicability and impact of all accounting standards updates (&#x201c;ASUs&#x201d;). Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended ("the JOBS Act"), the Company meets the definition of an emerging growth company, or EGC, and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.4pt">In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a right-of-use asset and lease liability on the balance sheet for all leases, including operating leases, with a term in excess of 12 months. The guidance also expands the quantitative and qualitative disclosure requirements. In July 2018, the FASB issued updates to the lease standard making transition requirements less burdensome. The update provides an option to apply the transition provisions of the new standard at its adoption date instead of at the earliest comparative period presented in the company&#x2019;s financial statements. The new guidance requires the lessee to record operating leases on the balance sheet with a right-of-use asset and corresponding liability for future payment obligations. FASB further issued ASU 2018-11 &#x201c;Target Improvement&#x201d; and ASU 2018-20 &#x201c;Narrow-scope Improvements for Lessors.&#x201d; In June 2020, the FASB issued ASU No. 2020-05, &#x201c;Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842) Effective Dates for Certain Entities&#x201d; (&#x201c;ASU 2020-05&#x201d;) in response to the ongoing impacts to businesses in response to the coronavirus (COVID-19) pandemic. ASU 2020-05 provides a limited deferral of the effective dates for implementing previously issued ASU 842 to give some relief to businesses and the difficulties they are facing during the pandemic. ASU 2020-05 affects entities in the &#x201c;all other&#x201d; category and public Not-For-Profit entities that have not gone into effect yet regarding ASU 2016-02, Leases (Topic 842). Entities in the &#x201c;all other&#x201d; category may defer to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. As an emerging growth company, the Company will adopt this guidance effective January 1, 2022. The Company is evaluating the impact on its consolidated financial statements.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (&#x201c;ASU 2020-01&#x201d;), which is intended to clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. ASU 2020-01 is effective for the Company beginning January 1, 2021. The Company does not expect this guidance will have a material impact on its consolidated financial statements.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except for the above-mentioned pronouncements, there are no new recent issued accounting standards that will have a material impact on the consolidated financial position, statements of operations and cash flows.</p><br/> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Basis of presentation</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (&#x201c;U.S. GAAP&#x201d;) and pursuant to the rules and regulations of the Securities Exchange Commission (&#x201c;SEC&#x201d;).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Principles of consolidation</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The consolidated financial statements include the financial statements of the Company and its subsidiaries. All intercompany transactions and balances are eliminated upon consolidation. All significant intercompany transactions and balances between the Company and its subsidiaries are eliminated upon consolidation.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of&#xa0;directors.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Non-controlling interest represents the portion of the net assets of a subsidiaries attributable to interests that are not owned by the Company. The non-controlling interest is presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Non-controlling interest&#x2019;s operating result is presented on the face of the consolidated statements of income and comprehensive income as an allocation of the total income for the year between non-controlling shareholders and the shareholders of the Company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Liquidity </font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the year ended December 31, 2020, the Company had working capital of $1.3 million and incurred a net loss of $18.4 million. For fiscal 2020, the Company had operation cash flow of $1.1 million. The Company has historically funded its working capital needs primarily from public offering, operations, bank loans, advance payments from customers and shareholders. The working capital requirements are affected by the efficiency of operations, the numerical volume and dollar value of revenue contracts, the progress or execution on customer contracts, and the timing of accounts receivable collections. The COVID-19 pandemic created significant economic uncertainty and volatility in the credit and capital markets since December 2019. Many customers have delayed their payments to the Company, which caused the significant increase in the Company&#x2019;s aged accounts receivable balance over one year in fiscal 2019. In early 2020, Chinese government took strict and efficient measures to control and eliminate the spreading of COVID-19 pandemic and many of our customers started to reopen business and bring operation to normal level in the second half of 2020. After evaluating the age of the balance, the customer&#x2019;s payment history, current credit-worthiness, and current economic trends, the Company reduced the provision for doubtful accounts for fiscal 2020.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In assessing its liquidity, the Company monitors and analyzes its cash on hand, its ability to generate sufficient revenue sources in the future and its operating and capital expenditure commitments. As of December 31, 2020, the Company had cash of approximately $8.4 million. To support its working capital, the Company entered into several securities purchase agreement in 2021. On January 8, 2021, the Company entered into a securities purchase agreement with Uptown Capital, LLC, pursuant to which the Company issued an unsecured promissory note on in the original principal amount of $1,650,000, convertible into ordinary shares, par value $0.00166667 per share, of the Company, for $1,500,000 in gross proceeds. On February 23, 2021, the Company entered into a Sales Agreement with A.G.P./Alliance Global Partners, as sales agent, pursuant to which the Company may offer and sell up to $30,000,000 of its ordinary shares, par value $0.00166667 per share. On April 9, 2021, the Company entered into a securities purchase agreement with YA II PN, LTD., pursuant to which the Company sells convertible notes in the principal amount of US$7,000,000 and a warrant to purchase 571,429 Ordinary Shares, for gross proceeds of approximately US$6,790,000. The Company believes that its cash on hand and financing cash flows will be sufficient to fund its operations over at least the next 12 months from the date of this report. However, the Company may need additional cash resources in the future if the Company experiences changed business conditions or other developments, and may also need additional cash resources in the future if the Company wishes to pursue opportunities for investment, acquisition, strategic cooperation or other similar actions. If it is determined that the cash requirements exceed the Company&#x2019;s amounts of cash on hand, the Company may seek to issue debt or equity securities or obtain a credit facility.</p> 1300000 1100000 8400000 1650000 0.00166667 1500000 On April 9, 2021, the Company entered into a securities purchase agreement with YA II PN, LTD., pursuant to which the Company sells convertible notes in the principal amount of US$7,000,000 and a warrant to purchase 571,429 Ordinary Shares, for gross proceeds of approximately US$6,790,000. <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Use of estimates</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company&#x2019;s consolidated financial statements include but not limited to the useful lives of property and equipment and capitalized development cost, impairment of long-lived assets, valuation of accounts receivables, loans to third parties, revenue recognition and realization of deferred tax assets and uncertain tax positions. Actual results could differ from these estimates.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Foreign currency translation</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The functional currencies of the Company are the local currency of the county in which the subsidiaries operates. The Company&#x2019;s financial statements are reported using U.S. Dollars. The results of operations and the consolidated statements of cash flows denominated in foreign currencies are translated at the average rates of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currencies is translated at the historical rates of exchange at the time of capital contributions. Because cash flows are translated based on the average translation rates, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income (loss) included in consolidated statements of changes in equity. Gains and losses from foreign currency transactions are included in the consolidated statement of operations and comprehensive income (loss).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Fair value measurement</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">ASC 825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">&#x25cf;</font></td> <td style="text-align: justify"><font style="font-size: 10pt">Level 1 &#x2014; inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.</font></td></tr> </table><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">&#x25cf;</font></td> <td style="text-align: justify"><font style="font-size: 10pt">Level 2 &#x2014; inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data.</font></td></tr> </table><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">&#x25cf;</font></td> <td style="text-align: justify"><font style="font-size: 10pt">Level 3 &#x2014; inputs to the valuation methodology are unobservable.</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unless otherwise disclosed, the fair value of the Company&#x2019;s financial instruments including cash, notes and accounts receivable, due from related parties, prepayments, deposits and other current assets, notes and accounts payable, customer deposits, salaries and benefits payables, due to related party and taxes payable approximates their recorded values due to their short-term maturities. The fair value of the long-term prepayments, deposits and other assets and loans to third parties approximate their carrying amounts because the deposits were paid in cash.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company elected the fair value option to account for its convertible loan. The Company engaged an independent valuation firm to perform the valuation. The fair value of the convertible loans is calculated using the binomial tree model. The convertible loans are classified as level 3 instruments as the valuation was determined based on unobservable inputs which are supported by little or no market activity and reflect the Company&#x2019;s own assumptions in measuring fair value. Significant estimates used in developing the fair value of the convertible loans include time to maturity, risk-free interest rate, straight debt discount rate, probability to convert and expected timing of conversion. Refer to Note 9 for additional information.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As the inputs used in developing the fair value for level 3 instruments are unobservable, and require significant management estimate, a change in these inputs could result in a significant change in the fair value measurement.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following is a reconciliation of the beginning and ending balances for convertible loans measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of December 31, 2020:</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: right">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Opening balance</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="width: 88%; text-align: left">Issuance of convertible loan</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">50,000,000</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Loss on change in fair value of convertible loan</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">15,258,333</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Conversion of convertible loan</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(65,258,333</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">Total</td><td style="font-weight: bold; padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">-</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#xa0;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Cash and cash equivalent</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Cash and cash equivalent comprise cash at banks and on hand, which includes deposits with original maturities of three months or less with commercial banks in PRC. As of December 31, 2020 and 2019, cash balances were $8,389,704 and $5,772,055, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Restricted cash</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Restricted cash mainly represents security deposits as required by certain customers on the Company&#x2019;s projects. The deposits in restricted bank accounts cannot be withdrawn until the Company completes the related projects. Restricted cash is classified as either current or non-current based on when the funds will be released in accordance with the terms of the respective agreements. As of December 31, 2020 and 2019, restricted cash consists of cash equivalents of $nil and $172,369 used as collateral to secure bank borrowings (Note 8). The Company is required to keep certain amounts on deposit that are subject to withdrawal restrictions. Upon the maturity of the bank borrowings, the Company is required to deposit the remainder to the escrow account to settle the bank borrowings. The bank borrowings are generally short term in nature due to their short maturity period of three months to one year; thus, the related restricted cash is classified as a current asset.</p> 172369 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Accounts receivable, net</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Accounts receivable, net, is stated at the original invoiced amount net of write-offs and allowance for doubtful accounts. The Company reviews the accounts receivable on a periodic basis and makes allowances when there is doubt as to the collectability of individual balances. Past-due balances over 90 days are reviewed individually for collectability. In evaluating the collectability of individual accounts receivable balances, the Company considers several factors, including the age of the balance, the customer&#x2019;s payment history, current credit-worthiness, and current economic trends. Accounts receivable balances are written off after all collection efforts have been exhausted. Typically, the Company includes unbilled receivables in accounts receivable for contracts on which revenue has been recognized, but for which the customer has not yet been billed. Unbilled receivables, substantially all of which are expected to be billed within one year are stated at their estimated realizable value and consist of costs and fees billable on contract completion or the occurrence of contractual payment phase.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Notes receivable</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Notes receivable represents guaranteed bank drafts that are non-interest bearing and due within six months. Such bank drafts have been arranged by certain customers with the related financial institutions to settle their purchases from the Company. The carrying amount of notes receivable approximates fair value.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Prepayments, deposits and other assets, net</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Prepayment, deposit and other assets, net, primarily consists of advances to suppliers for purchasing goods or services that have not been received or provided; security deposits made to our customers; advances to employees and loan receivables from business partners. Prepayment, deposit and other assets are classified as either current or non-current based on the terms of the respective agreements. These advances are unsecured and are reviewed periodically to determine whether their carrying value has become impaired.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Property and equipment, net</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Property and equipment, net, mainly comprise furniture and furniture, vehicles, computer and equipment are stated at cost less accumulated depreciation and impairment. Property and equipment are depreciated over the estimated useful lives of the assets on a straight-line basis, after considering the estimated residual value.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The estimated useful lives are as follows:</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom; "> <td style="width: 84%; text-align: justify">&#xa0;</td> <td style="width: 1%; text-align: justify">&#xa0;</td> <td style="border-bottom: black 1.5pt solid; width: 15%; text-align: center"><font style="font-size: 10pt"><b>Useful Life</b></font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Office equipment, fixtures and furniture</font></td> <td style="text-align: justify">&#xa0;</td> <td style="text-align: center"><font style="font-size: 10pt"><b>3-10 years</b></font></td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify"><font style="font-size: 10pt">Automobiles</font></td> <td style="text-align: justify">&#xa0;</td> <td style="text-align: center"><font style="font-size: 10pt"><b>5-8 years</b></font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Capitalized development costs and software acquired</font></td> <td style="text-align: justify">&#xa0;</td> <td style="text-align: center"><font style="font-size: 10pt"><b>5-10 years</b></font></td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify"><font style="font-size: 10pt">Computer equipment</font></td> <td style="text-align: justify">&#xa0;</td> <td style="text-align: center"><font style="font-size: 10pt"><b>5 years</b></font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and the related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is charged to the statement of income and comprehensive income.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Capitalized development costs</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company follows the provisions of Accounting Standards Codification (&#x201c;ASC&#x201d;) 350-40, &#x201c;Internal Use Software.&#x201d; ASC 350-40 provides guidance on capitalization of the costs incurred for computer software developed or obtained for internal use. The Company expenses all costs incurred during the preliminary project stage of its development, and capitalizes costs incurred during the application development stage. Costs incurred relating to upgrades and enhancements to the application are capitalized if it is determined that these upgrades or enhancements add additional functionality to the application. The capitalized development cost is amortized on a straight-line basis over the estimated useful life, which is generally five years. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Impairment for long-lived assets</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Long-lived assets, including property, equipment, furniture and fixtures and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. When these events occur, the Company measures impairment by comparing the carrying values of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amounts of the assets, the Company would recognize an impairment loss based on the excess of the carrying value over the assessed discounted cash flow amount. For the years ended December 31, 2020, 2019 and 2018, the Company recognized nil impairment for the long-lived assets.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Revenue recognition</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company adopted ASC Topic 606 Revenue from Contracts with Customers (&#x201c;ASC 606&#x201d;) on January 1, 2019 using the modified retrospective approach. Revenues for the year ended December 31, 2019 were presented under ASC 606, and revenues for the years ended December 31, 2018 were not adjusted and continue to be presented under ASC Topic 605, Revenue Recognition. There is no adjustment to the opening balance of retained earnings at January 1, 2019 since there was no change to the timing and pattern of revenue recognition upon adoption of ASC 606. Under ASC 606, revenue is recognized when control of promised goods or services is transferred to the Company&#x2019;s customers in an amount of consideration to which an entity expects to be entitled to in exchange for those goods or services and is recorded net of value-added tax (&#x201c;VAT&#x201d;).To achieve that core principle, the Group applies the following steps:</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Step 1: Identify the contract (s) with a customer</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Step 2: Identify the performance obligations in the contract</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Step 3: Determine the transaction price</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Step 4: Allocate the transaction price to the performance obligations in the contract</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company derives its revenues from three sources: (1) revenue from application development services, (2) revenue from consulting and technical support services, and (3) revenue from subscription services. All of the Company&#x2019;s contracts with customer do not contain cancelable and refund-type provisions.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(1) Revenue from application development service</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&#x2019;s application development service contracts are primarily on a fixed-price basis, which require the Company to perform services including project planning, project design, application development and system integration based on customers&#x2019; specific needs. These services also require significant production and customization. Upon delivery of the services, customer acceptance is generally required. In the same contract, the Company is generally required to provide post-contract customer support (&#x201c;PCS&#x2019;) for a period from three months to three years (&#x201c;PCS period&#x201d;) after the customized application development services are delivered. The type of services for PCS clause is generally not specified in the contracts or as stand-ready services on when-and-if-available basis. The unspecified PCS is stand-ready service on when-and-if-available basis. It grants the customers on line and telephone access to technical support personnel during the term of the service. Specified PCS includes specified service term in the contract such as training.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&#x2019;s application development service revenues are generated primarily from contracts with PRC government or related agencies and state-owned enterprises. The contracts contain negotiated billing terms which generally include multiple payment phases throughout the contract term and a significant portion (30% - 50%) of contract amount usually is billed upon the completion of the related projects. Pursuant to the contract terms, the Company has enforceable right on payments for the work performed.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company sometimes provides a warranty for its application development service contracts. The warranty period is typically 12-36 months upon the completion of the application development service. In accordance with ASC 606-10-25-19, the Company believes the warranty provision in the contracts generally represents service-type warranty, which is a distinct performance obligation and the Company also provides the similar service on standalone basis and customers can benefit from the related service-type warranty service. For the service warranty component, the customer simultaneously receives and consumes the benefits provided by the company performance over the warranty term, therefore, the service warranty is satisfied over time. The revenue allocated to the service warranty is recognized over the warranty period.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company assesses that application development service, PCS or specific service and service-type warranty service, if applicable, are distinct performance obligations in the application development service contracts. The Company provides these services on standalone basis and customers are able to benefit from each of the service on its own. In addition, the timing of delivery of these performance obligations can be separately identifiable in the contracts. The transaction price is allocated to these identified performance obligations based on the relative standalone selling prices. The transaction price allocated to PCS or unspecific service and service-type warranty, if applicable, on a straight-line method over the contractual period. Revenue allocated to specified PCS is recognized as the related services are rendered. The transaction price allocated to application development service is recognized over time as the Company&#x2019;s performance creates or enhances the project controlled by the customer and the control is transferred continuously to our customers. The Company uses an input method based on cost incurred as the Company believes that this method most accurately reflects the Company&#x2019;s progress toward satisfaction of the performance obligation, which usually takes less than one year. Under this method, the transaction price allocated to application development service is recognized as work is performed based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligations.&#xa0;</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Incurred costs include all direct material, labor and subcontract costs, and those indirect costs related to application development performance, such as indirect labor, supplies, and tools. Cost-based input method requires the Company to make estimates of revenues and costs to complete the construction. In making such estimates, significant judgment is required to evaluate assumptions related to the costs to complete the application development, including materials, labor, and other system costs. The Company&#x2019;s estimates are based upon the professional knowledge and experience of our engineers and project managers to assess the contract&#x2019;s schedule, performance, technical matters. The Company has adequate cost history and estimating experience, and with respect to which management believes it can reasonably estimate total development costs. If the estimated costs are greater than the related revenues, the Company recognizes the entire estimated loss in the period the loss becomes known and can be reasonably estimated. Changes in estimates for application development services include but not limited to cost forecast changes and change orders. The cumulative effect of changes in estimates is recorded in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated. To date, the Company has not incurred a material loss on any contracts. However, as a policy, provisions for estimated losses on such engagements will be made during the period in which a loss becomes probable and can be reasonably estimated. If contract modifications result in additional goods or services that are distinct from those transferred before the modification, they are accounted for prospectively as if the Company entered into a new contract. If the goods or services in the modification are not distinct from those in the original contract, sales and gross profit are adjusted using the cumulative catch-up method for revisions in estimated total contract costs and contract values.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In certain application development service arrangements, the Company sells and delivers IT equipment on standalone basis prior to the delivery of the services. In these cases, the Company controls the IT equipment before they are transferred to the customer. The Company has the right to direct the suppliers and control the goods or assets transferred to its customers. Thus, the Company considers it should recognize revenue as a principal in the gross amount of consideration to which it is entitled in exchange for the IT equipment delivered. The Company assesses the sale of equipment is separately identifiable from other promises in the contract and it is distinct performance obligation within the context of the contract. Accordingly, the revenue from the related IT equipment based on its relative standalone selling price is recognized upon customer acceptance after delivery.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(2) Revenue from consulting and technical support services</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Revenue from consulting and technical support services is primarily comprised of fixed-fee contracts, which require the Company to provide professional consulting and technical support services over contract terms beginning on the commencement date of each contract, which is the date its service is made available to customers. Billings to the customers are generally on a monthly or quarterly basis over the contract term, which is typically 12 to 24 months. The consulting and technical support services contracts typically include a single performance obligation. The revenue from consulting and technical support services is recognized over the contract term on a straight-line basis as customers receive and consume benefits of such services.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(3) Revenue from subscription services</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Revenue from subscription services is comprised of subscription fees from customers accessing the Company&#x2019;s software-as-a-service applications for a subscribed period. The Company&#x2019;s monthly or quarterly billing to customer is on the basis of number of uses or the actual usage by the customers. The subscription arrangements are considered service contracts because customers does not have the right to take possession of the software and can only benefit from the software when provided the right to access the software. Accordingly, the subscription services contracts typically include a single performance obligation. The revenue from subscription services is recognized over the contract term on a straight-line basis or based on the actual usage as customers receive and consume benefits of such services.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Revenue includes reimbursements of travel and out-of-pocket expense, with equivalent amounts of expense recorded in cost of revenue. The Company reports revenues net of value added tax (&#x201c;VAT&#x201d;). The Company&#x2019;s subsidiary in PRC are subject to a 6% to 13% value added tax (&#x201c;VAT&#x201d;) and related surcharges on the revenues earned from providing services.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Practical Expedient and Exemptions</i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company does not disclose the value of unsatisfied performance obligations within one year by applying the right to invoice practical expedient provided by ASC 606-10-55-18.</p> 0.30 0.50 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><i><font style="text-decoration:underline">Contract costs</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Contract costs include contract acquisition costs and contract fulfillment costs which are all recorded within prepayments, deposits, and other assets in the consolidated balance sheets.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Contract acquisition costs&#xa0;consist of incremental costs incurred by the Company to originate contracts with customers. Contract acquisition costs, which generally include costs that are only incurred as a result of obtaining a contract, are capitalized when the incremental costs are expected to be recovered over the contract period. All other costs incurred regardless of obtaining a contract are expensed as incurred. Contract acquisition costs are amortized over the period the costs are&#xa0;expected to contribute directly or indirectly to future cash flows, which is generally&#xa0;over the contract term, on a basis consistent with the transfer of goods or services to the customer to which the costs relate. Contract fulfillments costs&#xa0;consist of costs incurred by the Company to fulfill a contract with a customer and are capitalized when the costs generate or enhance resources that will be used in satisfying future performance obligations of the contract and the costs are expected to be recovered. Capitalized contract fulfillment costs generally include&#xa0;contracted services, direct labor, materials, and allocable overhead directly related to resources required to fulfill the contract.&#xa0;Contract fulfillment costs are recognized in cost of revenue during the period that the related costs are expected to contribute directly or indirectly to future cash flows, which is generally over the contract term, on a basis consistent with the transfer of goods or services to the customer to which the costs are related. The contract fulfillment cost amounted to $4,041,585 and $2,999,411 as of December 31, 2020 and 2019, respectively. There was no contract acquisition costs as of December 31, 2020 and 2019.</p> 4041585 2999411 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><i><font style="text-decoration:underline">Contract balance</font></i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accounts receivable includes both unbilled accounts receivable and billed accounts receivable. The Company records unbilled accounts receivable for revenue that has been recognized in advance of billing the customer, which is common for application development service contracts. The unbilled accounts receivable represents the Company&#x2019;s right to consideration in exchange for the service that the Company has performed to the customer before payment is due and the unbilled account receivable will be reclassified into billed accounts receivable when the Company has the right to invoice. Contract liabilities are presented as customer deposits and deferred revenue on the consolidated balance sheet. Contract liabilities relate to payments received in advance of completion of performance obligations under a contract. Contract liabilities are recognized as revenue upon the completion of performance obligations. As of December 31, 2020 and 2019, the balance of customer deposits amounted to $573,243 and $270,793, respectively. As of December 31, 2020 and 2019, the balance of deferred revenue amounted to $1,095,279 and $869,396, respectively.</p> 573243 270793 1095279 869396 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Government subsidies</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Government subsidies mainly represent amounts granted by local government authorities as an incentive for companies to promote development of the local technology industry. The Company receives government subsidies related to government sponsored projects, and records such government subsidies as a liability when it is received. The Company records government subsidies as other income when there is no further performance obligation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Advertising expenditures</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Advertising expenditures are expensed as incurred and such expenses were minimal for the periods presented. Advertising expenditures have been included as part of selling and marketing expenses. For the years ended December 31, 2020, 2019 and 2018, the advertising expense amounted to $53,445, $61,174 and 21,168, respectively.</p> 53445 61174 21168 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Operating leases</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A lease for which substantially all the benefits and risks incidental to ownership remain with the lessor is classified by the lessee as an operating lease. All leases of the Company are currently classified as operating leases. The Company records the total expenses on a straight-line basis over the lease term.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Income taxes</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">An uncertain tax position is recognized as a benefit only if it is &#x201c;more likely than not&#x201d; that the tax position would be sustained in a tax examination. The 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 &#x201c;more likely than not&#x201d; test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. No significant penalties or interest relating to income taxes have been incurred during the years ended December 31, 2020, 2019 and 2018. All of the tax returns of the Company&#x2019;s subsidiary in China remain subject to examination by the tax authorities for five years from the date of filing.</p> 0.50 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Value added tax </font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Revenue represents the invoiced value of service, net of VAT. The VAT is based on gross sales price and VAT rates range up to 13%, depending on the type of service provided. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in taxes payable. All of the VAT returns filed by the Company&#x2019;s subsidiary in China, have been and remain subject to examination by the tax authorities for five years from the date of filing.</p> 0.13 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Employee defined contribution plan</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Full time employees of the Company in the PRC participate in a government mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require that the Company make contributions to the government for these benefits based on a certain percentage of the employee&#x2019;s salaries. The Company has no legal obligation for the benefits beyond the contributions. The total amount was expensed as incurred.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">(Loss) earnings per share</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company computes (loss) earnings per share (&#x201c;EPS&#x201d;) in accordance with ASC 260, &#x201c;Earnings per Share&#x201d;. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common share outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential Ordinary Shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential Ordinary Shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the year ended December 31, 2020 and 2019, since the company had a loss, basic and dilutive loss per share are the same. For the years ended December 31, 2018, there were nil potential dilutive ordinary shares.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Share-Based compensation</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company accounts for share-based awards to employees and nonemployees directors and consultants in accordance with the provisions of ASC 718, Compensation&#x2014;Stock Compensation, and under the recently issued guidance following FASB&#x2019;s pronouncement, ASU 2018-07, Compensation&#x2014;Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. Under ASC 718, and applicable updates adopted, for employee stock-based awards, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting on a straight-line basis over the requisite service period for the entire award. For the non-employee stock-based awards, the fair value of the awards to non-employees are measured every reporting period based on the value of the Company&#x2019;s common stock.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Comprehensive income (loss)</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under U.S. GAAP are recorded as an element of shareholders&#x2019; equity but are excluded from net income. Other comprehensive income (loss) consists of a foreign currency translation adjustment resulting from the Company not using the U.S. dollar as its functional currencies.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Statement of Cash Flows</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In accordance with ASC 230, &#x201c;Statement of Cash Flows,&#x201d; cash flows from the Company&#x2019;s operations are formulated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Commitments and Contingencies</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the normal course of business, the Company is subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters, such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments including historical and the specific facts and circumstances of each matter.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Segment reporting </font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.45pt">The Company&#x2019;s chief operating decision maker (&#x201c;CODM&#x201d;) has been identified as its CEO, who reviews the consolidated results when making decisions about allocating resources and assessing performance of the Company as a whole and hence, the Company has only one reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. The Company&#x2019;s long-lived assets are substantially all located in the PRC and all of the Company&#x2019;s revenues are derived from the PRC. Therefore, no geographical segments are&#xa0;presented.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Concentrations of Risks</font></p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">(a)</font></td> <td style="text-align: justify"><font style="font-size: 10pt">Concentration of credit risk</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Assets that potentially subject the Company to significant concentration of credit risk primarily consist of cash, restricted cash, accounts receivable and other current assets. The maximum exposure of such assets to credit risk is their carrying amounts as at the balance sheet dates. As of December 31, 2020 and 2019, the aggregate amount of cash and restricted cash of $8,365,573 and $5,606,425, respectively, were held at major financial institutions in PRC, which the management believes are of high credit quality. On May&#xa0;1, 2015, China&#x2019;s new Deposit Insurance Regulation came into effect, pursuant to which banking financial institutions, such as commercial banks, established in China are required to purchase deposit insurance for deposits in RMB and in foreign currency placed with them. Such Deposit Insurance Regulation would not be effective in providing complete protection for the Group&#x2019;s accounts, as its aggregate deposits are much higher than the compensation limit. However, the Group believes that the risk of failure of any of these Chinese banks is remote. Bank failure is uncommon in China and the Group believes that those Chinese banks are financially sound based on public available information. The Company conducts credit evaluations of its customers and suppliers, and generally does not require collateral or other security from them. The Company establishes an accounting policy for allowance for doubtful accounts on the individual customer&#x2019;s and supplier&#x2019;s financial condition, credit history, and the current economic conditions.</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">(b)</font></td> <td style="text-align: justify"><font style="font-size: 10pt">Foreign currency risk</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A majority of the Company&#x2019;s expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries&#x2019; assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People&#x2019;s Bank of China (&#x201c;PBOC&#x201d;). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&#x2019;s functional currency is the RMB, and the Company&#x2019;s financial statements are presented in U.S. dollars. The RMB depreciated by 1.3% in fiscal year 2019 and appreciated by 6.3% in fiscal year 2020. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. The change in the value of the RMB relative to the U.S. dollar may affect our financial results reported in the U.S. dollar terms without giving effect to any underlying changes in our business or results of operations. Currently, our assets, liabilities, revenues and costs are denominated in RMB. To the extent that the Company needs to convert U.S. dollars into RMB for capital expenditures and working capital and other business purposes, appreciation of RMB against U.S. dollar would have an adverse effect on the RMB amount the Company would receive from the conversion. Conversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making payments for dividends, strategic acquisition or investments or other business purposes, appreciation of U.S. dollar against RMB would have a negative effect on the U.S. dollar amount available to the Company.</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">(c)</font></td> <td style="text-align: justify"><font style="font-size: 10pt">Significant customers</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the year ended December 31, 2020, one customer accounted for 25.7% of the Company&#x2019;s total revenues. For the year ended December 31, 2019, two customers accounted 21.8% and 10.7% of the Company&#x2019;s total revenues. For the year ended December 31, 2018, no customer accounted for more than 10% of the Company&#x2019;s total revenues. As of December 31, 2020, no customer accounted for more than 10% of the Company&#x2019;s accounts receivable. As of December 31, 2019, one customer accounted 12.8% of the Company&#x2019;s accounts receivable.</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">(d)</font></td> <td style="text-align: justify"><font style="font-size: 10pt">Significant suppliers</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the year ended December 31, 2020, one supplier accounted for 21.3% of the Company&#x2019;s total purchases. For the year ended December 31, 2019, one supplier accounted for 22.7% of the Company&#x2019;s total purchases. For the year ended December 31, 2018, three suppliers accounted for 12.9%, 11.2% and 10.3% of the Company&#x2019;s total purchases. As of December 31, 2020, one supplier accounted for 11.9% of the Company&#x2019;s total accounts payable. As of December 31, 2019, one supplier accounted for 11.4% of the Company&#x2019;s total accounts payable.</p> 8365573 5606425 0.257 0.218 0.107 0.10 0.10 0.213 0.227 0.129 0.112 0.103 0.119 0.114 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Recently issued accounting pronouncements</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company considers the applicability and impact of all accounting standards updates (&#x201c;ASUs&#x201d;). Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended ("the JOBS Act"), the Company meets the definition of an emerging growth company, or EGC, and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.4pt">In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a right-of-use asset and lease liability on the balance sheet for all leases, including operating leases, with a term in excess of 12 months. The guidance also expands the quantitative and qualitative disclosure requirements. In July 2018, the FASB issued updates to the lease standard making transition requirements less burdensome. The update provides an option to apply the transition provisions of the new standard at its adoption date instead of at the earliest comparative period presented in the company&#x2019;s financial statements. The new guidance requires the lessee to record operating leases on the balance sheet with a right-of-use asset and corresponding liability for future payment obligations. FASB further issued ASU 2018-11 &#x201c;Target Improvement&#x201d; and ASU 2018-20 &#x201c;Narrow-scope Improvements for Lessors.&#x201d; In June 2020, the FASB issued ASU No. 2020-05, &#x201c;Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842) Effective Dates for Certain Entities&#x201d; (&#x201c;ASU 2020-05&#x201d;) in response to the ongoing impacts to businesses in response to the coronavirus (COVID-19) pandemic. ASU 2020-05 provides a limited deferral of the effective dates for implementing previously issued ASU 842 to give some relief to businesses and the difficulties they are facing during the pandemic. ASU 2020-05 affects entities in the &#x201c;all other&#x201d; category and public Not-For-Profit entities that have not gone into effect yet regarding ASU 2016-02, Leases (Topic 842). Entities in the &#x201c;all other&#x201d; category may defer to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. As an emerging growth company, the Company will adopt this guidance effective January 1, 2022. The Company is evaluating the impact on its consolidated financial statements.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (&#x201c;ASU 2020-01&#x201d;), which is intended to clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. ASU 2020-01 is effective for the Company beginning January 1, 2021. 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background-color: rgb(204,238,255)"> <td style="text-align: left">Opening balance</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="width: 88%; text-align: left">Issuance of convertible loan</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">50,000,000</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Loss on change in fair value of convertible loan</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">15,258,333</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Conversion of convertible loan</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(65,258,333</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">Total</td><td style="font-weight: bold; padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-weight: bold; text-align: right">-</td><td style="padding-bottom: 4pt; font-weight: bold; text-align: left">&#xa0;</td></tr> </table> 50000000 15258333 -65258333 <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom; "> <td style="width: 84%; text-align: justify">&#xa0;</td> <td style="width: 1%; text-align: justify">&#xa0;</td> <td style="border-bottom: black 1.5pt solid; width: 15%; text-align: center"><font style="font-size: 10pt"><b>Useful Life</b></font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Office equipment, fixtures and furniture</font></td> <td style="text-align: justify">&#xa0;</td> <td style="text-align: center"><font style="font-size: 10pt"><b>3-10 years</b></font></td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify"><font style="font-size: 10pt">Automobiles</font></td> <td style="text-align: justify">&#xa0;</td> <td style="text-align: center"><font style="font-size: 10pt"><b>5-8 years</b></font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Capitalized development costs and software acquired</font></td> <td style="text-align: justify">&#xa0;</td> <td style="text-align: center"><font style="font-size: 10pt"><b>5-10 years</b></font></td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify"><font style="font-size: 10pt">Computer equipment</font></td> <td style="text-align: justify">&#xa0;</td> <td style="text-align: center"><font style="font-size: 10pt"><b>5 years</b></font></td></tr> </table> P3Y P10Y P5Y P8Y P5Y P10Y P5Y <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 3 &#x2014; Accounts receivable, net</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Accounts receivable, net, consists of the following:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Accounts receivable</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">15,896,127</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">12,910,734</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt; padding-left: 9pt">Less: Allowance for doubtful accounts</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,581,142</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,669,658</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Total accounts receivable, net</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">14,314,985</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">11,241,076</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unbilled accounts receivable included in accounts receivable above amounted to $7,526,282 and $5,865,900 as of December 31, 2020 and 2019, respectively. The unbilled accounts receivables as of December 31, 2020 are expected to be billed within one year and collected over one year. The billed accounts receivable is expected to be collected within one year.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of March 31, 2021, approximately $2.1 million (or 13.5%) of total accounts receivable as of December 31, 2020 was collected. It represented 23.0% of billed accounts receivable balance and 3.0% of unbilled accounts receivable balance as of December 31, 2020 were subsequently collected, respectively.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Movement of allowance for doubtful accounts is as follows:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="10" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: justify">Beginning balance</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,669,658</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">392,533</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">36,285</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Provision (reverse) for doubtful accounts</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">3,276,200</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">372,635</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Recovery</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(189,286</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Written-off</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(1,984,244</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Foreign currency translation adjustments</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">100,770</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(14,831</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(16,387</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Ending balance</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,581,142</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,669,658</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">392,533</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the year ended December 31, 2019, the Company wrote off $1,984,244 accounts receivable related to two customers. </p><br/> 7526282 5865900 The unbilled accounts receivables as of December 31, 2020 are expected to be billed within one year and collected over one year. The billed accounts receivable is expected to be collected within one year. 2100000 0.230 0.030 1984244 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Accounts receivable</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">15,896,127</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">12,910,734</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt; padding-left: 9pt">Less: Allowance for doubtful accounts</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,581,142</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,669,658</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Total accounts receivable, net</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">14,314,985</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">11,241,076</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> </table> 15896127 12910734 1581142 1669658 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="10" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: justify">Beginning balance</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,669,658</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">392,533</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">36,285</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Provision (reverse) for doubtful accounts</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">3,276,200</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">372,635</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Recovery</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(189,286</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Written-off</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(1,984,244</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Foreign currency translation adjustments</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">100,770</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(14,831</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(16,387</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Ending balance</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,581,142</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,669,658</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">392,533</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> </table> 1669658 392533 36285 3276200 372635 189286 -1984244 100770 -14831 -16387 1581142 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 4 &#x2014; Prepayments, deposits and other assets, net</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Prepayments, deposits and other assets, net consisted of the following:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Security deposits ⁽¹⁾</p></td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">385,607</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">755,886</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Advances to suppliers</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,508,022</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">31,449</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Advances to employees</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">215,735</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">18,159</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Prepaid expense</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">293,573</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">377,501</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Others</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">288,464</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">158,554</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,691,401</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,341,549</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Less: Long term portion</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(385,607</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(759,397</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Allowance for doubtful accounts</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(306,513</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(31,139</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Prepayments, deposits and other assets &#x2013; current portion</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,999,281</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">551,013</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> </table><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font-size: 10pt">(1)</font></td><td style="text-align: justify"><font style="font-size: 10pt">Security deposits represent contract fulfillment deposits required by customer for specific projects, rent deposits and etc.</font></td> </tr></table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Movement of allowance for doubtful accounts is as follows:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="10" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: justify">Beginning balance</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">31,139</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">14,047</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">19,422</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-left: 9pt">Provision(recovery) for doubtful accounts</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">258,280</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">17,400</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(4,510</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt; padding-left: 9pt">Foreign currency translation adjustments</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">17,094</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(308</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(865</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Ending balance</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">306,513</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">31,139</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">14,047</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> </table><br/> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Security deposits ⁽¹⁾</p></td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">385,607</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">755,886</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Advances to suppliers</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,508,022</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">31,449</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Advances to employees</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">215,735</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">18,159</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Prepaid expense</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">293,573</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">377,501</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Others</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">288,464</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">158,554</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,691,401</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,341,549</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Less: Long term portion</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(385,607</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(759,397</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Allowance for doubtful accounts</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(306,513</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(31,139</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Prepayments, deposits and other assets &#x2013; current portion</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,999,281</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">551,013</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> </table><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font-size: 10pt">(1)</font></td><td style="text-align: justify"><font style="font-size: 10pt">Security deposits represent contract fulfillment deposits required by customer for specific projects, rent deposits and etc.</font></td> </tr></table> 385607 755886 1508022 31449 215735 18159 293573 377501 288464 158554 2691401 1341549 -385607 -759397 -306513 -31139 1999281 551013 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="10" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: justify">Beginning balance</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">31,139</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">14,047</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">19,422</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-left: 9pt">Provision(recovery) for doubtful accounts</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">258,280</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">17,400</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(4,510</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt; padding-left: 9pt">Foreign currency translation adjustments</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">17,094</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(308</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(865</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Ending balance</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">306,513</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">31,139</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">14,047</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> </table> 31139 14047 19422 258280 17400 -4510 17094 -308 -865 306513 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 5 &#x2014; Loans to third parties </b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Loans to third parties consisted of the following:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify">&#xa0;</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31,</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify">&#xa0;</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&#xa0;</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td> <td colspan="2" style="font-size: 10pt; text-align: center">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td> <td colspan="2" style="font-size: 10pt; text-align: center">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; font-size: 10pt; text-align: justify"><font style="font-size: 10pt">Unsecured loan receivable from third parties ⁽¹⁾</font></td><td style="width: 1%; font-size: 10pt">&#xa0;</td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">704,981</td><td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 1%; font-size: 10pt">&#xa0;</td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">740,000</td><td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt"><font style="font-size: 10pt">Guaranteed loan receivable from media business ⁽²⁾</font></td><td style="font-size: 10pt; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">68,095,019</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt; text-align: right">68,800,000</td><td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt; text-align: right">740,000</td><td style="font-size: 10pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">Less: Long term portion</td><td style="font-size: 10pt; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(63,434,483</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</td><td style="font-size: 10pt; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 4pt">Prepayments, deposits and other assets &#x2013; current portion</td><td style="font-size: 10pt; padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">5,365,517</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt; padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">740,000</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left">&#xa0;</td></tr> </table><br/><table cellpadding="0" cellspacing="0" width="100%" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 0.25in">(1)</td><td style="text-align: justify">The Company had unsecured, interest-bearing loan receivables from various third parties. The maturity of these loans are generally within one year. As of December 31, 2020 and 2019, the loans to third parties amounted to $704,981 and $740,000 with annual interest rates approximately 8% and 5.3%.</td></tr></table><br/><table cellpadding="0" cellspacing="0" width="100%" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 0.25in">(2)</td><td style="text-align: justify">Pursuant to the agreement with Shenzhen Kezhi Technology Co., Ltd.(&#x201c;Kezhi&#x201d;) on September 25, 2020 and a series of amendments entered during the period from September 25, 2020 to May 16, 2021, the Company intends to expand to media business through Kezhi. The Company originally planned to acquire certain media business assets from Kezhi, however, due to uncertainties in COVID-19, the Company and Kezhi ultimately reached into a final agreement (&#x201c;Final agreement&#x201d;) on May 16, 2021. Pursuant to the Final agreement, the Company agreed to extend a working capital support loan to Kezhi in aggregated of $68,095,019 with expected annual returns over two years and coupon interest rate of 5%. The expected annual return is as follows:</td></tr></table><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Twelve months ending December 31,</b></font></td> <td>&#xa0;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Expected annual return schedule</b></font></td> <td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2021</font></td> <td style="width: 1%">&#xa0;</td> <td style="width: 1%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</font></td> <td style="width: 9%; text-align: right"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4,660,536</font></td> <td style="width: 1%">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2022</font></td> <td>&#xa0;</td> <td>&#xa0;</td> <td style="text-align: right"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">70,243,985</font></td> <td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total return payments (including principal and interest)</font></td> <td>&#xa0;</td> <td style="border-bottom: black 4.5pt double"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</font></td> <td style="border-bottom: black 4.5pt double; text-align: right"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">74,904,521</font></td> <td>&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The effective annual interest rate based on the expected annual return schedule was approximately 5%. The repayment of loan is guaranteed by a third-party company. As of December 31, 2020, based on the above repayment plan, the Company included $4,660,536 principal portion of the loan receivable in the current portion of loans to third parties and included $63,434,483 in the non-current portion of loans to third parties.</p><br/> 704981 740000 0.08 0.053 Pursuant to the agreement with Shenzhen Kezhi Technology Co., Ltd.(&#x201c;Kezhi&#x201d;) on September 25, 2020 and a series of amendments entered during the period from September 25, 2020 to May 16, 2021, the Company intends to expand to media business through Kezhi. The Company originally planned to acquire certain media business assets from Kezhi, however, due to uncertainties in COVID-19, the Company and Kezhi ultimately reached into a final agreement (&#x201c;Final agreement&#x201d;) on May 16, 2021. Pursuant to the Final agreement, the Company agreed to extend a working capital support loan to Kezhi in aggregated of $68,095,019 with expected annual returns over two years and coupon interest rate of 5%. 0.05 4660536 63434483 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify">&#xa0;</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31,</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify">&#xa0;</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&#xa0;</td><td style="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td> <td colspan="2" style="font-size: 10pt; text-align: center">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td> <td colspan="2" style="font-size: 10pt; text-align: center">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; font-size: 10pt; text-align: justify"><font style="font-size: 10pt">Unsecured loan receivable from third parties ⁽¹⁾</font></td><td style="width: 1%; font-size: 10pt">&#xa0;</td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">704,981</td><td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td><td style="width: 1%; font-size: 10pt">&#xa0;</td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td><td style="width: 9%; font-size: 10pt; text-align: right">740,000</td><td style="width: 1%; font-size: 10pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt"><font style="font-size: 10pt">Guaranteed loan receivable from media business ⁽²⁾</font></td><td style="font-size: 10pt; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">68,095,019</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt; text-align: right">68,800,000</td><td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt">&#xa0;</td> <td style="font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt; text-align: right">740,000</td><td style="font-size: 10pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1.5pt">Less: Long term portion</td><td style="font-size: 10pt; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">(63,434,483</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">)</td><td style="font-size: 10pt; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; font-size: 10pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; font-size: 10pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 4pt">Prepayments, deposits and other assets &#x2013; current portion</td><td style="font-size: 10pt; padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">5,365,517</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left">&#xa0;</td><td style="font-size: 10pt; padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: left">$</td><td style="border-bottom: Black 4pt double; font-size: 10pt; text-align: right">740,000</td><td style="padding-bottom: 4pt; font-size: 10pt; text-align: left">&#xa0;</td></tr> </table><table cellpadding="0" cellspacing="0" width="100%" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 0.25in">(1)</td><td style="text-align: justify">The Company had unsecured, interest-bearing loan receivables from various third parties. The maturity of these loans are generally within one year. As of December 31, 2020 and 2019, the loans to third parties amounted to $704,981 and $740,000 with annual interest rates approximately 8% and 5.3%.</td></tr></table><table cellpadding="0" cellspacing="0" width="100%" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 0.25in">(2)</td><td style="text-align: justify">Pursuant to the agreement with Shenzhen Kezhi Technology Co., Ltd.(&#x201c;Kezhi&#x201d;) on September 25, 2020 and a series of amendments entered during the period from September 25, 2020 to May 16, 2021, the Company intends to expand to media business through Kezhi. The Company originally planned to acquire certain media business assets from Kezhi, however, due to uncertainties in COVID-19, the Company and Kezhi ultimately reached into a final agreement (&#x201c;Final agreement&#x201d;) on May 16, 2021. Pursuant to the Final agreement, the Company agreed to extend a working capital support loan to Kezhi in aggregated of $68,095,019 with expected annual returns over two years and coupon interest rate of 5%. The expected annual return is as follows:</td></tr></table> 704981 740000 68095019 68800000 740000 -63434483 5365517 740000 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Twelve months ending December 31,</b></font></td> <td>&#xa0;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Expected annual return schedule</b></font></td> <td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2021</font></td> <td style="width: 1%">&#xa0;</td> <td style="width: 1%"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</font></td> <td style="width: 9%; text-align: right"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4,660,536</font></td> <td style="width: 1%">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2022</font></td> <td>&#xa0;</td> <td>&#xa0;</td> <td style="text-align: right"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">70,243,985</font></td> <td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total return payments (including principal and interest)</font></td> <td>&#xa0;</td> <td style="border-bottom: black 4.5pt double"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</font></td> <td style="border-bottom: black 4.5pt double; text-align: right"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">74,904,521</font></td> <td>&#xa0;</td></tr> </table> 4660536 70243985 74904521 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 6 &#x2014; Property and equipment, net</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Property and equipment, net, consist of the following:</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: justify">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">As of December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Computer equipment</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">494,803</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">409,346</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Office equipment, fixtures and furniture</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,084,615</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,953,259</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Capitalized development cost and software acquired</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">8,081,105</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">6,027,310</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Automobiles</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">165,149</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">154,788</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-left: 9pt">Subtotal</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">10,825,672</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">8,544,703</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Less: accumulated depreciation and amortization</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(3,641,571</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,980,063</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,184,101</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">6,564,640</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Depreciation and amortization expense for the years ended December 31, 2020, 2019 and 2018 amounted to $310,845, $299,959 and $272,458, respectively.&#xa0;The Company capitalized development costs related to its core supporting modules of the global trade applications and solutions for internal use incurred during the application development stage. The amortization expense for the years ended December 31, 2020, 2019 and 2018 totaled $1,140,727, $652,245 and $370,807, respectively.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The estimated amortization of capitalized development cost is as follows:</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: justify">Twelve months ending December 31,</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Estimated amortization expense</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: justify">2021</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,513,352</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">2022</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,385,346</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">2023</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,203,410</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">2024</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">911,125</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">2025</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">390,387</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Thereafter</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">16,003</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">5,419,623</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/> 310845 299959 272458 1140727 652245 370807 <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: justify">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">As of December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: center">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Computer equipment</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">494,803</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">409,346</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Office equipment, fixtures and furniture</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,084,615</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,953,259</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Capitalized development cost and software acquired</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">8,081,105</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">6,027,310</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Automobiles</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">165,149</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">154,788</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-left: 9pt">Subtotal</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">10,825,672</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">8,544,703</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Less: accumulated depreciation and amortization</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(3,641,571</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1,980,063</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,184,101</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">6,564,640</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 494803 409346 2084615 1953259 8081105 6027310 165149 154788 10825672 8544703 3641571 1980063 <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: justify">Twelve months ending December 31,</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Estimated amortization expense</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: justify">2021</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,513,352</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">2022</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,385,346</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">2023</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,203,410</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">2024</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">911,125</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">2025</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">390,387</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Thereafter</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">16,003</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">5,419,623</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 1513352 1385346 1203410 911125 390387 16003 5419623 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 7 &#x2014; Related party balances and transactions</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Related party transactions and balances</font></p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">a.</font></td> <td style="text-align: justify"><font style="font-size: 10pt">Prepaid expense &#x2013; related parties</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company had consulting fee prepayment of $121,144 to Guangzhou Powerbridge Blockchain Co., Ltd. as of December 31, 2019, which the Company has significant influence over with. In 2020, both parties negotiated to terminate the consulting service. The balance of $129,254 as of December 31, 2020 was reclassified to due from related party and fully allowanced in 2020.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the year ended December 31, 2019, the Company incurred consulting fee prepayment $685,167 to Hengqin Baisheng Investment, GP, which was a non-controlling shareholder of Powerbridge Ningbo. The balance of $622,222 as of December 31, 2020 was reclassified to due from related party in 2020.</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px; text-align: justify">&#xa0;</td> <td style="width: 24px; text-align: justify"><font style="font-size: 10pt">b.</font></td> <td style="text-align: justify"><font style="font-size: 10pt">Due from related parties:</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of December 31, 2020, the Company had $129,254 due from Guangzhou Powerbridge Blockchain Co., Ltd., which was fully allowanced in 2020. As of December 31, 2020, the Company had $622,222 due from Hengqin Baisheng Investment, GP.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of December 31, 2020 and 2019, the Company advanced $30,651 and $370,000 to Mr. Zongbo Jiang, the legal representative of Guangzhou Hongqiao Blockchain Co., Ltd, which the Company has significant influence over with. The balance collected in 2020.</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">b.</font></td> <td style="text-align: justify"><font style="font-size: 10pt">Due to related party:</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Due to related party as of December 31, 2020 amounted to $71,020, which included $8,855 unpaid expenses to Ling Lor, wife of CEO and director of the Company and $62,165 unpaid expenses to Hong Yu, shareholder of Chongqing Power.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Due to related party as of December 31, 2019 amounted to $6,538, which represents unpaid expenses to Ling Lor, wife of CEO and director of the Company.</p><br/> 121144 129254 685167 622222 129254 622222 30651 370000 71020 8855 62165 6538 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 8 &#x2014; Bank loans </b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Outstanding balance of short-term bank loans consisted of the following:</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: justify">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December&#xa0;31,<br/> 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December&#xa0;31,<br/> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: right">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: right">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Loan from Bank of Communication</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,532,567</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,149,095</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Loan from Bank of China</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">766,284</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">430,923</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Loan from Guangfa Bank</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">2,298,850</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 4pt">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">4,597,701</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,580,018</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 25, 2019, Powerbridge Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $1,149,095 for a term of one year and at a floating rate based on prime borrowing rate in PRC. The bank loan was unsecured and guaranteed by Mr. Ban Lor, the Chairman and CEO of the Company, and his family member. The loan was fully repaid upon maturity.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 16, 2020, Powerbridge Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $1,532,532 for a term of half year and at a fixed annual interest rate of 5.003%. The bank loan was unsecured and guaranteed by Mr. Ban Lor, the Chairman and CEO of the Company, and his family member. The loan was fully repaid October 8, 2020.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November 5, 2020, Powerbridge Zhuhai entered into a loan agreement with Bank of Communication to obtain a loan of $1,532,567 for a term of one year and at a fixed annual interest rate of 4.5675%. The bank loan was unsecured and guaranteed by a third party.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#xa0;On February 1, 2019, Powerbridge Zhuhai entered into a loan agreement with Bank of China to obtain a loan of $430,923 for a term of one year and at a fixed annual interest rate of 4.6%. The bank loan was guaranteed by Mr. Ban Lor and secured by a restricted cash deposit of $172,369 as of December 31, 2019. The loan was fully repaid upon maturity.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On January 9, 2020, Powerbridge Zhuhai entered into a loan agreement with Bank of China to obtain a loan of $766,284 for a term of one year and at a fixed annual interest rate of 4.45%. The bank loan was guaranteed by Mr. Ban Lor and secured by a restricted cash deposit of $114,943 as of December 31, 2020. The loan was fully repaid on December 25, 2020.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 4, 2020, Powerbridge Zhuhai entered into a loan agreement with Bank of China to obtain a loan of $459,770 for a term of one year and at a fixed annual interest rate of 4.55%. The bank loan was guaranteed by Mr. Ban Lor. The loan was fully repaid upon maturity.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On December 14, 2020, Powerbridge Zhuhai entered into a loan agreement with Bank of China to obtain a loan of $306,514 for a term of one year and at a fixed annual interest rate of 4.55%. The bank loan was guaranteed by Mr. Ban Lor.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On January 2, 2020, Powerbridge Zhuhai entered into a loan agreement with Guangfa Bank to obtain a loan of $2,298,851 for a term of one year and at a fixed annual interest rate of 4.6%. The bank loan was guaranteed by Mr. Ban Lor and the company&#x2019;s account receivable of some programs was pledged to secure the loan. The loan was fully repaid upon maturity.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the years ended December 31, 2020, 2019 and 2018, interest expense was $203,289, $123,278 and $19,385, respectively, with the weighted average interest rate of 4.7%, 4.9% and 5.9%, respectively.</p><br/> 1149095 P1Y 1532532 0.05003 1532567 P1Y 0.045675 430923 P1Y 0.046 766284 P1Y 0.0445 114943 459770 P1Y 0.0455 306514 P1Y 0.0455 2298851 P1Y 0.046 203289 123278 19385 0.047 0.049 0.059 <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: justify">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December&#xa0;31,<br/> 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December&#xa0;31,<br/> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: right">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="text-align: right">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Loan from Bank of Communication</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,532,567</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,149,095</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Loan from Bank of China</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">766,284</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">430,923</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Loan from Guangfa Bank</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">2,298,850</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 4pt">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">4,597,701</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,580,018</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 1532567 1149095 766284 430923 2298850 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 9 &#x2014; Convertible note</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 7 2020, the Company entered into certain securities purchase agreement (the &#x201c;Note SPA&#x201d;) with certain &#x201c;non-U.S. Person&#x201d; (the &#x201c;Investor&#x201d;) as defined in Regulation S of the Securities Act of 1933, as amended (the &#x201c;Securities Act&#x201d;), pursuant to which the Company agreed to sell unsecured convertible promissory note in the aggregate principal amount of $50,000,000 (the &#x201c;Note&#x201d;) with a maturity date of 12 months, an interest rate of 6.0% per annum, and a conversion price (&#x201c;Holder Conversion Price&#x201d;) equal to the lesser of i) $2.00 per share or ii) 75% of the daily VWAPs (as reported by Bloomberg) for the ten (10) consecutive trading days ending on the trading day that is immediately prior to the date of Holder Conversion Notice, which shall not be lower than $1.80 (the &#x201c;Floor Price&#x201d;). Pursuant to the Note, the Investor has the right at any time 7 days after the date of the issuance of the Note (the &#x201c;Issuance Date&#x201d;) until the outstanding balance of the Note (the &#x201c;Outstanding Balance&#x201d;) has been paid in full (such date, the &#x201c;Conversion Date&#x201d;), at its election, to convert (the &#x201c;Holder Conversion&#x201d;) all or any part of the Outstanding Balance into shares (each instance of conversion is referred herein as &#x201c;Conversion Shares&#x201d;, together with the Note, the &#x201c;Securities&#x201d;) of fully paid and non-assessable Ordinary Shares of the Company.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Conversion of convertible note </font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">All Note Holders delivered the Conversion Notices to the Company on November 12, 2020 and the Company issued an aggregate of 27,777,776 restricted ordinary shares, par value $0.00166667 per share, of the Company, to the Note Holders. The fair value of the conversion note was assessed at $65,258,333 upon conversion based on the binomial model assessed by the independent valuation firm (Note 11).</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has elected to recognize the convertible loan at fair value and therefore there was no further evaluation of embedded features for bifurcation. The Company engaged third party valuation firm to perform the valuation of convertible loans. The fair value of the convertible loans is calculated using the binomial tree model based on probability of remaining as straight debt using discounted cash flow with the following assumptions</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: center">&#xa0;</td> <td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>November&#xa0;12, <br/> 2020</b></font></td> <td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify"><font style="font-size: 10pt">Risk-free interest rate</font></td> <td>&#xa0;</td> <td>&#xa0;</td> <td style="white-space: nowrap; text-align: right"><font style="font-size: 10pt">0.12</font></td> <td><font style="font-size: 10pt">%</font></td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify"><font style="font-size: 10pt">Expected life </font></td> <td>&#xa0;</td> <td>&#xa0;</td> <td style="white-space: nowrap; text-align: right"><font style="font-size: 10pt">0.96 year</font></td> <td style="text-indent: 5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify"><font style="font-size: 10pt">Discount rate</font></td> <td>&#xa0;</td> <td>&#xa0;</td> <td style="white-space: nowrap; text-align: right"><font style="font-size: 10pt">6.23</font></td> <td><font style="font-size: 10pt">%</font></td></tr> <tr style="vertical-align: bottom; "> <td style="width: 89%; text-align: justify"><font style="font-size: 10pt">Expected volatility</font></td> <td style="width: 1%">&#xa0;</td> <td style="width: 1%">&#xa0;</td> <td style="white-space: nowrap; width: 8%; text-align: right"><font style="font-size: 10pt">77.6</font></td> <td style="width: 1%"><font style="font-size: 10pt">%</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify"><font style="font-size: 10pt">Expected dividend yield</font></td> <td>&#xa0;</td> <td>&#xa0;</td> <td style="white-space: nowrap; text-align: right"><font style="font-size: 10pt">0</font></td> <td><font style="font-size: 10pt">%</font></td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify"><font style="font-size: 10pt">Fair value</font></td> <td>&#xa0;</td> <td><font style="font-size: 10pt">$</font></td> <td style="white-space: nowrap; text-align: right"><font style="font-size: 10pt">65,258,333</font></td> <td>&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The convertible loans are classified as level 3 instruments as the valuation was determined based on unobservable inputs which are supported by little or no market activity and reflect the Group&#x2019;s own assumptions in measuring fair value. Significant inputs used in developing the fair value of the convertible loans include time to maturity, risk-free interest rate, straight debt discount rate, probability to convert and expected timing of conversion.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the year ended December 31, 2020, the Company recognized a loss of change in fair value of convertible loan of $15,258,333. Prior to the conversion on November 16, 2020, the fair value of the convertible loan was assessed at $65,258,333, which was reclassified to equity upon conversion of the convertible loan on November 16, 2020.</p><br/> 50000000 0.060 i) $2.00 per share or ii) 75% of the daily VWAPs (as reported by Bloomberg) for the ten (10) consecutive trading days ending on the trading day that is immediately prior to the date of Holder Conversion Notice, which shall not be lower than $1.80 (the &#x201c;Floor Price&#x201d;). 27777776 0.00166667 65258333 15258333 65258333 <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: center">&#xa0;</td> <td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>November&#xa0;12, <br/> 2020</b></font></td> <td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify"><font style="font-size: 10pt">Risk-free interest rate</font></td> <td>&#xa0;</td> <td>&#xa0;</td> <td style="white-space: nowrap; text-align: right"><font style="font-size: 10pt">0.12</font></td> <td><font style="font-size: 10pt">%</font></td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify"><font style="font-size: 10pt">Expected life </font></td> <td>&#xa0;</td> <td>&#xa0;</td> <td style="white-space: nowrap; text-align: right"><font style="font-size: 10pt">0.96 year</font></td> <td style="text-indent: 5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify"><font style="font-size: 10pt">Discount rate</font></td> <td>&#xa0;</td> <td>&#xa0;</td> <td style="white-space: nowrap; text-align: right"><font style="font-size: 10pt">6.23</font></td> <td><font style="font-size: 10pt">%</font></td></tr> <tr style="vertical-align: bottom; "> <td style="width: 89%; text-align: justify"><font style="font-size: 10pt">Expected volatility</font></td> <td style="width: 1%">&#xa0;</td> <td style="width: 1%">&#xa0;</td> <td style="white-space: nowrap; width: 8%; text-align: right"><font style="font-size: 10pt">77.6</font></td> <td style="width: 1%"><font style="font-size: 10pt">%</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify"><font style="font-size: 10pt">Expected dividend yield</font></td> <td>&#xa0;</td> <td>&#xa0;</td> <td style="white-space: nowrap; text-align: right"><font style="font-size: 10pt">0</font></td> <td><font style="font-size: 10pt">%</font></td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify"><font style="font-size: 10pt">Fair value</font></td> <td>&#xa0;</td> <td><font style="font-size: 10pt">$</font></td> <td style="white-space: nowrap; text-align: right"><font style="font-size: 10pt">65,258,333</font></td> <td>&#xa0;</td></tr> </table> 0.0012 P350D 0.0623 0.776 0.00 65258333 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 10 &#x2014; Taxes</b></p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">(a)</font></td> <td style="text-align: justify"><font style="font-size: 10pt"><font style="text-decoration:underline">Income tax</font></font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Cayman Islands</i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Powerbridge was incorporated in the Cayman Islands and is not subject to tax on income or capital gains under the laws of Cayman Islands. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Hong Kong</i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Powerbridge HK is established in Hong Kong. Under the Hong Kong tax laws, Powerbridge HK is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>PRC</i></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Powerbridge Zhuhai is governed by the Enterprise Income Tax (&#x201c;EIT&#x201d;) laws of PRC. Under EIT laws of PRC, domestic enterprises and Foreign Investment Enterprises (the &#x201c;FIE&#x201d;) are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on case-by-case basis. EIT grants preferential tax treatment to certain High and New Technology Enterprises (&#x201c;HNTEs&#x201d;). Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%, subject to a requirement that they re-apply for HNTE status every three years. Powerbridge Zhuhai, the Company&#x2019;s operating subsidiary in PRC, has been approved as HNTEs in 2014 and successfully renewed it in 2020, which reduced its statutory income tax rate to 15%. The rest of the Company&#x2019;s subsidiaries in PRC are subject to income tax rate of 25%.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The impact of the preferred tax treatment noted above decreased income taxes by $25,735, $595,556 and $158,167 for the fiscal year 2020, 2019 and 2018, respectively. The benefit of the preferred tax treatment on net income per share (basic and diluted) was nil, 0.07 and $0.02 for the years ended December 31, 2020, 2019 and 2018, respectively.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Significant components of the provision for income taxes are as follows:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="10" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the years ended December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: justify">Current</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">109</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">11,164</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">113,088</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Deferred</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(80,641</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(224,511</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(69,898</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Total income tax (benefits) expenses</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(80,532</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(213,347</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">43,190</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table reconciles China statutory rates to the Company&#x2019;s effective tax rate:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="10" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the years ended December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: justify">PRC statutory rates</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">25.0</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">25.0</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">25.0</td><td style="width: 1%; text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Preferential tax rates</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(25.0</td><td style="text-align: left">)%</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(16.9</td><td style="text-align: left">)%</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(9.9</td><td style="text-align: left">)%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">R&amp;D credits</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1.7</td><td style="text-align: left">%</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(3.4</td><td style="text-align: left">)%</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(4.0</td><td style="text-align: left">)%</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Change in valuation allowance and others</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1.3</td><td style="padding-bottom: 1.5pt; text-align: left">)%</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(2.8</td><td style="padding-bottom: 1.5pt; text-align: left">)%</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1.6</td><td style="padding-bottom: 1.5pt; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Effective tax rate</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">0.4</td><td style="padding-bottom: 1.5pt; text-align: left">%</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1.9</td><td style="padding-bottom: 1.5pt; text-align: left">%</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">2.7</td><td style="padding-bottom: 1.5pt; text-align: left">%</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of the deferred tax assets are as follows:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Deferred tax assets:</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Provision for doubtful accounts</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">302,536</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">255,119</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Depreciation and amortization</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">112,595</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">53,992</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Net operating loss carryforward</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">517,537</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">272,815</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Valuation allowance</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(517,537</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(272,815</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Total deferred tax assets</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">415,131</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">309,111</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of December 31, 2020, the Company has approximately $3.3 million net operating loss (&#x201c;NOL&#x201d;) carryforwards with expirations by 2025. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the cumulative earnings and projected future taxable income in making this assessment. Recovery of substantially all of the group&#x2019;s deferred tax assets is dependent upon the generation of future income, exclusive of reversing taxable temporary differences. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are recoverable, management provided $517,537 and $272,815 valuation allowance against the deferred tax assets that the Company does not expect to realize at December 31, 2020 and 2019, respectively.</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">(b)</font></td> <td style="text-align: justify"><font style="font-size: 10pt"><font style="text-decoration:underline">Value added tax</font></font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Enterprises who sell goods in the PRC are subject to a value added tax in accordance with PRC laws. VAT standard rates are 6% to 13% of the gross sales price. A credit is available whereby VAT paid on the purchases of semi-finished products or raw materials used in the production of the Company&#x2019;s finished products can be used to offset the VAT due on sales of the finished products and services. Powerbridge Zhuhai obtained a VAT preferential status for its technology development business, accordingly, the certain Company&#x2019;s technology development business is exempted from VAT.</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">(c)</font></td> <td style="text-align: justify"><font style="font-size: 10pt"><font style="text-decoration:underline">Tax payable</font></font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Taxes payable consists of the following:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Income taxes payable</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">565,506</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">539,437</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">VAT and other tax payable</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">133,429</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">330,476</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Totals</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">698,935</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">869,913</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Uncertain tax positions</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of December 31, 2020 and 2019, the Company did not have any significant unrecognized uncertain tax positions. The Company did not incur any interest and penalties related to potential underpaid income tax expenses for the years ended December 31, 2020 and 2019. The Company also does not anticipate any significant increases or decreases in unrecognized tax benefits in the next 12 months from December 31, 2020.</p><br/> 0.25 0.15 0.15 0.25 25735 595556 158167 0.07 0.02 As of December 31, 2020, the Company has approximately $3.3 million net operating loss (&#x201c;NOL&#x201d;) carryforwards with expirations by 2025. 517537 272815 0.06 0.13 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="10" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the years ended December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: justify">Current</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">109</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">11,164</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">113,088</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Deferred</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(80,641</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(224,511</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(69,898</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Total income tax (benefits) expenses</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(80,532</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(213,347</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">43,190</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> </table> 109 11164 113088 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="10" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the years ended December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: justify">PRC statutory rates</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">25.0</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">25.0</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">25.0</td><td style="width: 1%; text-align: left">%</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Preferential tax rates</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(25.0</td><td style="text-align: left">)%</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(16.9</td><td style="text-align: left">)%</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(9.9</td><td style="text-align: left">)%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">R&amp;D credits</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1.7</td><td style="text-align: left">%</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(3.4</td><td style="text-align: left">)%</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(4.0</td><td style="text-align: left">)%</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Change in valuation allowance and others</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(1.3</td><td style="padding-bottom: 1.5pt; text-align: left">)%</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(2.8</td><td style="padding-bottom: 1.5pt; text-align: left">)%</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1.6</td><td style="padding-bottom: 1.5pt; text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Effective tax rate</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">0.4</td><td style="padding-bottom: 1.5pt; text-align: left">%</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1.9</td><td style="padding-bottom: 1.5pt; text-align: left">%</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">2.7</td><td style="padding-bottom: 1.5pt; text-align: left">%</td></tr> </table> 0.250 0.250 0.250 -0.250 -0.169 -0.099 -0.017 0.034 0.040 -0.013 -0.028 0.016 0.004 0.019 0.027 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">Deferred tax assets:</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Provision for doubtful accounts</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">302,536</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">255,119</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">Depreciation and amortization</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">112,595</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">53,992</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Net operating loss carryforward</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">517,537</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">272,815</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Valuation allowance</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(517,537</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(272,815</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Total deferred tax assets</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">415,131</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">309,111</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> </table> 302536 255119 112595 53992 517537 272815 517537 272815 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: justify">Income taxes payable</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">565,506</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">539,437</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">VAT and other tax payable</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">133,429</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">330,476</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">Totals</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">698,935</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">869,913</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> </table> 565506 539437 133429 330476 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 11 &#x2014; Equity</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Ordinary Shares</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Powerbridge was established under the laws of Cayman Islands on July 27, 2018. The original authorized number of Ordinary Shares was 500,000,000 shares with a par value of $0.0001 per share. On August 18, 2018, in order to optimize the Company&#x2019;s share capital structure, the board of directors approved a reverse stock split of the Company&#x2019;s authorized number of Ordinary Shares at a ratio of 10-1. After the reverse stock split, the Company&#x2019;s authorized number of Ordinary Shares became 50,000,000 shares with par value of $0.001 per share and 11,508,747 shares were issued on August 27, 2018 at par value to the original shareholders of Powerbridge Zhuhai, the equivalent to share capital of $11,509. On February 10, 2019, the board of directors further approved a reverse stock split of the Company&#x2019;s authorized number of Ordinary Shares at a ratio of 1-0.6. After the reverse stock split, the Company&#x2019;s authorized number of Ordinary Shares was 30,000,000 shares with par value of $0.00166667 per share and 6,905,248 shares were issued and outstanding immediately after the reserve stock split. The Company believes it is appropriate to reflect these share issuances as nominal share issuance on a retroactive basis similar to stock split pursuant to ASC 260. The Company has retroactively adjusted all shares and per share data for all the periods presented.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 30, 2020, the Company held its 2020 special general meeting of shareholders (the &#x201c;Meeting&#x201d;). At the Meeting, the Company&#x2019;s shareholders approved the Company&#x2019;s amended and restated Memorandum and Articles of Association (&#x201c;A&amp;R M&amp;A&#x201d;) to increase the authorized share capital. As a result, the Company&#x2019;s authorized share capital is US$500,000 divided into 300,000,000 shares of a par value of US$0.00166667 each, with an increase of an additional 270,000,000 shares of a par value of US$0.00166667 each.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company had 45,777,318 and 8,967,748 ordinary shares issued and outstanding as of December 31, 2020 and 2019, respectively.</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">&#x25cf;</font></td> <td style="text-align: justify"><font style="font-size: 10pt">IPO</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 4, 2019, the Company consummated its initial public offering (&#x201c;IPO&#x201d;) of 2,012,500 Ordinary Shares at a price of $5.00 per shares including the exercise in full of the underwriters' over-allotment option of 262,500 ordinary shares at IPO price of $5.00 per share. The gross proceeds from the IPO was $10,062,500 and the net proceeds was $8,021,987. As a result of the IPO, the Ordinary Shares now trade on the Nasdaq Capital Market under the symbol &#x201c;PBTS.&#x201d;</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">&#x25cf;</font></td> <td style="text-align: justify"><font style="font-size: 10pt">Public Offering Warrants</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with the IPO on April 4, 2019, the Company issued warrants totaling 122,500 units to the placement agents (the &#x201c;Public Offering Warrants&#x201d;). The warrants carry a term of five years and shall be exercisable at $5.50 per share. Management determined that these warrants are equity instruments because the warrants are both a) indexed to its own stock; and b) classified in shareholders&#x2019; equity. The warrants were recorded at their fair value on the date of grant as a component of shareholders&#x2019; equity. No warrants were exercised for the year ended December 31, 2020 and 2019. As of December 31, 2020 and 2019, the total number of warrants outstanding was 122,500 with weighted average remaining life of 3.25 years and 4.26 years, respectively. No warrants were exercised as of December 31, 2020 and 2019. The fair value of this Public Offering Warrants was $356,200, which was considered a direct cost of IPO and included in additional paid-in capital. The fair value has been estimated using the Black-Scholes pricing model with the following weighted-average assumptions: market value of underlying share of $5.00, risk free rate of 2.2%; expected term of 5 years; exercise price of the warrants of $5.5, volatility of 71.9%; and expected future dividends of nil.</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 48px">&#xa0;</td> <td style="width: 24px"><font style="font-size: 10pt">&#x25cf;</font></td> <td style="text-align: justify"><font style="font-size: 10pt">Ordinary shares issued for consulting services</font></td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 30, 2019, the Company entered into a marketing development service agreement with an external consultant for service term of three years and agreed to 50,000 restricted shares as compensation. On November 28, 2019, the Company entered into a marketing development service agreement with another external consultants for service term of three years and agreed to 57,540 restricted shares as compensation. The aggregated fair value of those restricted shares was assessed at $335,469 based on the stock price of contract dates. For the year ended December 31, 2019, the Company recorded a consulting fee expense of $18,430 included in the share based compensation expense. As of December 31, 2019, there were unrecognized share based compensation expense related to the restricted shares issued for consulting services amounted to $317,039. As of December 31, 2019, the Company issued 50,000 restricted shares and issued the remaining 57,450 restricted shares in January 2020. For the year ended December 31, 2019, the aggregated of 107,540 restricted shares was included in the calculation of basic earning per shares in accordance with ASC 260-10-45-13.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 15, 2020, the Company signed a consulting agreement with an independent marketing professional with term of one year. Pursuant to the agreement, the Company agreed to pay total of 150,000 ordinary shares as compensation for the services after signing of the agreement. The Company issued 150,000 restricted ordinary shares on April 14, 2020. The fair value of those shares was assessed at approximately $332,100 based on the stock price of contract date. On July 30, 2020, the Company issued 24,254 ordinary shares as compensation to an advisory firm for the related investor relations advisory service during the period ended from January 2020 to July 2020. The fair value of those shares was assessed at approximately $65,001 based on the stock price of contract date. On September 26, 2020, the Company signed a consulting agreement with a third party consultant. Pursuant to the agreement, the Company agreed to pay a total of 100,000 ordinary shares as compensation for new business segment strategic positioning and planning services. The Company has not issued the above 100,000 shares as of December 31, 2020. On August 17, 2020, the Company signed a consulting agreement with a third party consultant. Pursuant to the agreement, the Company agreed to pay a total of 10,000 ordinary shares as compensation for services. The Company has not issued the above 10,000 shares as of December 31, 2020.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the year ended December 31, 2020, the Company recorded a consulting fee expense of $487,347 included in the share based compensation expense. As of December 31, 2020, there were unrecognized share based compensation expense related to the restricted shares issued for consulting services amounted to $490,094. For the year ended December 31, 2020, the aggregated of 110,000 shares legally issuable to the two third party consultants were included in the calculation of basic earning per shares in accordance with ASC 260-10-45-13.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">2018 Stock option plan</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 18, 2018 and further amended on February 10, 2019, the Board of Directors (&#x201c;Board&#x201d;) approved an amended the 2018 Stock Option Plan (the &#x201c;2018 Plan&#x201d;).&#xa0; The Plan provides for discretionary grants of stock options to key employees, directors and consultants of the Company. The purpose of the Plan is to attract and retain the best available personnel and to promote the success of the Company&#x2019;s business. The Board authorized that the maximum aggregate number of ordinary shares reserved and available pursuant to this Plan shall be the aggregate of (i) 1,035,787 shares, and (ii) on each January 1, starting with January 1, 2019, an additional number of shares equal to the lesser of (A) 2% of the outstanding number of ordinary shares (on a fully-diluted basis) on the immediately preceding December 31, and (B) such lower number of ordinary shares as may be determined by the Committee. The Plan shall become effective on the effective date of the Company&#x2019;s contemplated initial public offering is completed, which was on April 4, 2019. The grants under the Plan generally have a maximum contractual term of ten years from the date of grant. Stock option awards granted under the plan at the determination of the Board shall be effective and exercisable after the Company&#x2019; completion of IPO of its securities. The terms of individual agreements for various grants under the Plan will be determined by the Board (or its Compensation Committee) and might contain both service and performance conditions.&#xa0;The Company believes the options contain an explicit service condition and a performance condition. On July 2, 2020, the Board approved to amend the 2018 Plan to adjust that the maximum aggregate number of ordinary shares reserved and available pursuant to the 2018 Plan shall not at any time exceed 20% of the total number of outstanding Ordinary Shares at the time of issuance, from time to time. Such amendment was approved during shareholders&#x2019; annual meeting on July 27, 2020.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 4, 2019, the Board approved to issue 1,050,500 stock options to its employees under 2018 stock option plan with exercise price of $5.0 per share. These options generally have vesting periods of 1-3 years and will expire no later than April 3, 2024.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 4, 2019, the Board approved to issue 300,000stock options to an external consultant under 2018 stock option plan with exercise price of $3.75 per share. These options were fully vested upon grant and will expire no later than April 3, 2029.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The fair value of stock options was determined at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option model requires management to make various estimates and assumptions, including expected term, expected volatility, risk-free rate, and dividend yield. The expected term represents the period of time that stock-based compensation awards granted are expected to be outstanding and is estimated based on considerations including the vesting period, contractual term and anticipated employee exercise patterns. Expected volatility is based on the historical volatility of the Company&#x2019;s stock. The risk-free rate is based on the U.S. Treasury yield curve in relation to the contractual life of stock-based compensation instruments. The dividend yield assumption is based on historical patterns and future expectations for the Company dividends. For the year ended December 31, 2020, assumptions used to estimate the fair value of stock options on the grant dates are as follows:</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: center">&#xa0;</td> <td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Options granted in April 2019</b></font></td> <td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Risk-free interest rate</font></td> <td>&#xa0;</td> <td>&#xa0;</td> <td style="white-space: nowrap; text-align: right"><font style="font-size: 10pt">2.3%-2.5</font></td> <td><font style="font-size: 10pt">%</font></td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify"><font style="font-size: 10pt">Expected life of the options</font></td> <td>&#xa0;</td> <td>&#xa0;</td> <td style="white-space: nowrap; text-align: right"><font style="font-size: 10pt">5-10 years</font></td> <td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 89%; text-align: justify"><font style="font-size: 10pt">Expected volatility</font></td> <td style="width: 1%">&#xa0;</td> <td style="width: 1%">&#xa0;</td> <td style="white-space: nowrap; width: 8%; text-align: right"><font style="font-size: 10pt">71.9</font></td> <td style="width: 1%"><font style="font-size: 10pt">%</font></td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify"><font style="font-size: 10pt">Expected dividend yield</font></td> <td>&#xa0;</td> <td>&#xa0;</td> <td style="white-space: nowrap; text-align: right"><font style="font-size: 10pt">0</font></td> <td><font style="font-size: 10pt">%</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Fair value</font></td> <td>&#xa0;</td> <td><font style="font-size: 10pt">$</font></td> <td style="white-space: nowrap; text-align: right"><font style="font-size: 10pt">4,376,500</font></td> <td>&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">2018 Stock option plan</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A summary of activities of the stock options for the years ended December 31, 2019 and 2020 is presented as follows:</p><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Number of<br/> Share<br/> Options</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Weighted<br/> Average<br/> Exercise<br/> Price</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Weighted<br/> Average<br/> Remaining<br/> Contractual<br/> Term</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Aggregate<br/> Intrinsic<br/> Value</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td style="font-weight: bold">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center">US$</td><td style="font-weight: bold">&#xa0;</td><td style="font-weight: bold">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center">Year</td><td style="font-weight: bold">&#xa0;</td><td style="font-weight: bold">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center">US$</td><td style="font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Outstanding as of January 1, 2019</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="width: 52%">Granted</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">1,350,500</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">4.72</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Expired, forfeited or cancelled</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>Outstanding as of December&#xa0;31, 2019</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,350,500</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">4.72</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">5.37</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Granted</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Expired, forfeited or cancelled</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">Outstanding as of December&#xa0;31, 2020</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">1,350,500</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">4.72</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">4.37</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 4pt">Exercisable as of December&#xa0;31, 2020</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">760,667</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">4.51</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">5.23</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the year ended December&#xa0;31, 2020 and 2019, total share-based compensation expenses recognized for the share options granted were $986,629 and $2,333,460, respectively. As of December&#xa0;31, 2020 and 2019, there were $1,056,410 and $2,043,040 unrecognized share-based compensation expenses related to the share options granted, respectively.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">2020 Private placement </font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 24, 2020, Company closed certain non-broker securities purchase agreements (the &#x201c;SPAs&#x201d;) with certain &#x201c;non-U.S. Persons&#x201d; (the &#x201c;Purchasers&#x201d;) as defined in Regulation S of the Securities Act of 1933, as amended (the &#x201c;Securities Act&#x201d;) pursuant to which the Company agreed to sell an aggregate of 8,800,000 ordinary shares, $0.00166667 par value per share of the Company (&#x201c;Share&#x201d;), at a per share purchase price of $2.00 (the &#x201c;Offering&#x201d;). The net proceeds to the Company from such Offering was $17.6 million.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">2020 Conversion of convertible loan </font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November 16, 2020, the Company issued an aggregate of 27,777,776 restricted ordinary shares, par value $0.00166667 per share, of the Company, to the conversion note holders (Note 10). The fair value of the conversion note was assessed at $65,258,333 upon conversion based on the binomial model assessed by the independent valuation firm.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Additional paid-in capital</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of December 31, 2020 and 2019, additional paid-in capital in the consolidated balance sheet represented the combined contributed capital of the Company&#x2019;s subsidiaries.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Statutory reserve </font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under PRC law, the Company&#x2019;s subsidiary located in the PRC (collectively referred as the (&#x201c;PRC entities&#x201d;) are required to provide for certain statutory reserves. The PRC entities are required to allocate at least 10% of their after-tax profits on an individual company basis as determined under PRC accounting standards to the statutory reserve and has the right to discontinue allocations to the statutory reserve if such reserve has reached 50% of registered capital on an individual company basis.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&#x2019;s subsidiaries in PRC had accumulated deficits for the years ended December 31, 2020 and 2019, as a result, the statutory reserve balances were Nil as of December 31, 2020 and 2019.</p><br/> 500000000 0.0001 the Company&#x2019;s share capital structure, the board of directors approved a reverse stock split of the Company&#x2019;s authorized number of Ordinary Shares at a ratio of 10-1. 50000000 0.001 11508747 11509 30000000 0.00166667 6905248 6905248 the Company&#x2019;s authorized share capital is US$500,000 divided into 300,000,000 shares of a par value of US$0.00166667 each, with an increase of an additional 270,000,000 shares of a par value of US$0.00166667 each. the Company consummated its initial public offering (&#x201c;IPO&#x201d;) of 2,012,500 Ordinary Shares at a price of $5.00 per shares including the exercise in full of the underwriters' over-allotment option of 262,500 ordinary shares at IPO price of $5.00 per share. The gross proceeds from the IPO was $10,062,500 and the net proceeds was $8,021,987. As a result of the IPO, the Ordinary Shares now trade on the Nasdaq Capital Market under the symbol &#x201c;PBTS.&#x201d; 2012500 5.00 262500 5.00 the Company issued warrants totaling 122,500 units to the placement agents (the &#x201c;Public Offering Warrants&#x201d;). The warrants carry a term of five years and shall be exercisable at $5.50 per share. Management determined that these warrants are equity instruments because the warrants are both a) indexed to its own stock; and b) classified in shareholders&#x2019; equity. The warrants were recorded at their fair value on the date of grant as a component of shareholders&#x2019; equity. No warrants were exercised for the year ended December 31, 2020 and 2019. As of December 31, 2020 and 2019, the total number of warrants outstanding was 122,500 with weighted average remaining life of 3.25 years and 4.26 years, respectively. No warrants were exercised as of December 31, 2020 and 2019. The fair value of this Public Offering Warrants was $356,200, which was considered a direct cost of IPO and included in additional paid-in capital. The fair value has been estimated using the Black-Scholes pricing model with the following weighted-average assumptions: market value of underlying share of $5.00, risk free rate of 2.2%; expected term of 5 years; exercise price of the warrants of $5.5, volatility of 71.9%; and expected future dividends of nil. the Company entered into a marketing development service agreement with an external consultant for service term of three years and agreed to 50,000 restricted shares as compensation. On November 28, 2019, the Company entered into a marketing development service agreement with another external consultants for service term of three years and agreed to 57,540 restricted shares as compensation. The aggregated fair value of those restricted shares was assessed at $335,469 based on the stock price of contract dates. 18430 317039 the Company issued 50,000 restricted shares and issued the remaining 57,450 restricted shares in January 2020. For the year ended December 31, 2019, the aggregated of 107,540 restricted shares was included in the calculation of basic earning per shares in accordance with ASC 260-10-45-13. the Company signed a consulting agreement with an independent marketing professional with term of one year. Pursuant to the agreement, the Company agreed to pay total of 150,000 ordinary shares as compensation for the services after signing of the agreement. The Company issued 150,000 restricted ordinary shares on April 14, 2020. The fair value of those shares was assessed at approximately $332,100 based on the stock price of contract date. On July 30, 2020, the Company issued 24,254 ordinary shares as compensation to an advisory firm for the related investor relations advisory service during the period ended from January 2020 to July 2020. The fair value of those shares was assessed at approximately $65,001 based on the stock price of contract date. On September 26, 2020, the Company signed a consulting agreement with a third party consultant. Pursuant to the agreement, the Company agreed to pay a total of 100,000 ordinary shares as compensation for new business segment strategic positioning and planning services. The Company has not issued the above 100,000 shares as of December 31, 2020. On August 17, 2020, the Company signed a consulting agreement with a third party consultant. Pursuant to the agreement, the Company agreed to pay a total of 10,000 ordinary shares as compensation for services. The Company has not issued the above 10,000 shares as of December 31, 2020. 487347 490094 110000 (i) 1,035,787 shares, and (ii) on each January 1, starting with January 1, 2019, an additional number of shares equal to the lesser of (A) 2% of the outstanding number of ordinary shares (on a fully-diluted basis) on the immediately preceding December 31, and (B) such lower number of ordinary shares as may be determined by the Committee. 0.20 1050500 5.0 P1Y P3Y the Board approved to issue 300,000stock options to an external consultant under 2018 stock option plan with exercise price of $3.75 per share. These options were fully vested upon grant and will expire no later than April 3, 2029. 986629 2333460 1056410 2043040 8800000 0.00166667 2.00 17600000 27777776 0.00166667 65258333 The PRC entities are required to allocate at least 10% of their after-tax profits on an individual company basis as determined under PRC accounting standards to the statutory reserve and has the right to discontinue allocations to the statutory reserve if such reserve has reached 50% of registered capital on an individual company basis. <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="text-align: center">&#xa0;</td> <td style="padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 10pt"><b>Options granted in April 2019</b></font></td> <td style="padding-bottom: 1.5pt">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Risk-free interest rate</font></td> <td>&#xa0;</td> <td>&#xa0;</td> <td style="white-space: nowrap; text-align: right"><font style="font-size: 10pt">2.3%-2.5</font></td> <td><font style="font-size: 10pt">%</font></td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify"><font style="font-size: 10pt">Expected life of the options</font></td> <td>&#xa0;</td> <td>&#xa0;</td> <td style="white-space: nowrap; text-align: right"><font style="font-size: 10pt">5-10 years</font></td> <td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 89%; text-align: justify"><font style="font-size: 10pt">Expected volatility</font></td> <td style="width: 1%">&#xa0;</td> <td style="width: 1%">&#xa0;</td> <td style="white-space: nowrap; width: 8%; text-align: right"><font style="font-size: 10pt">71.9</font></td> <td style="width: 1%"><font style="font-size: 10pt">%</font></td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify"><font style="font-size: 10pt">Expected dividend yield</font></td> <td>&#xa0;</td> <td>&#xa0;</td> <td style="white-space: nowrap; text-align: right"><font style="font-size: 10pt">0</font></td> <td><font style="font-size: 10pt">%</font></td></tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="text-align: justify"><font style="font-size: 10pt">Fair value</font></td> <td>&#xa0;</td> <td><font style="font-size: 10pt">$</font></td> <td style="white-space: nowrap; text-align: right"><font style="font-size: 10pt">4,376,500</font></td> <td>&#xa0;</td></tr> </table> 0.023 0.025 P5Y P10Y 0.719 0.00 4376500 <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Number of<br/> Share<br/> Options</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Weighted<br/> Average<br/> Exercise<br/> Price</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Weighted<br/> Average<br/> Remaining<br/> Contractual<br/> Term</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Aggregate<br/> Intrinsic<br/> Value</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td style="font-weight: bold">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center">US$</td><td style="font-weight: bold">&#xa0;</td><td style="font-weight: bold">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center">Year</td><td style="font-weight: bold">&#xa0;</td><td style="font-weight: bold">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center">US$</td><td style="font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Outstanding as of January 1, 2019</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="width: 52%">Granted</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">1,350,500</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">4.72</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Expired, forfeited or cancelled</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>Outstanding as of December&#xa0;31, 2019</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,350,500</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">4.72</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">5.37</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Granted</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">-</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Expired, forfeited or cancelled</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">Outstanding as of December&#xa0;31, 2020</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">1,350,500</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">4.72</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">4.37</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 4pt">Exercisable as of December&#xa0;31, 2020</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">760,667</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">4.51</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">5.23</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 1350500 4.72 1350500 4.72 P5Y135D 1350500 4.72 P4Y135D 760667 4.51 P5Y83D <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 12 &#x2014; Commitments and contingencies</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Contingencies</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">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.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="text-decoration:underline">Lease commitment</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has entered into non-cancellable operating lease agreements for several offices and dormitory spaces for its employees. The leases are expiring through 2022. The Company&#x2019;s commitments for minimum lease payment under these operating leases as of December 31, 2020 are as follow:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-weight: bold; text-align: justify; border-bottom: Black 1.5pt solid">Twelve months ending December 31,</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Minimum lease payment</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: justify">2021</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">204,442</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">2022</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">59,446</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">2023</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">21,567</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Total</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">285,455</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Rent expense for the years ended December 31, 2020, 2019 and 2018 were $305,832, $492,530 and $386,076, respectively.</p><br/> The leases are expiring through 2022. 305832 492530 386076 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-weight: bold; text-align: justify; border-bottom: Black 1.5pt solid">Twelve months ending December 31,</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Minimum lease payment</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: justify">2021</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">204,442</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify">2022</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">59,446</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt">2023</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">21,567</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Total</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">285,455</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> </table> 204442 59446 21567 285455 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 13 &#x2014; Segment reporting</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the years ended December 31, 2020 and 2019, the Company&#x2019;s CODM reviewed the financial information of the business carried out by the Company on a consolidated basis. Therefore, the Company has one operating segment, which is the provision of global trade software application and technology services. The Company operates solely in the PRC and all of the Company&#x2019;s long-lived assets are located in the PRC.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table presents revenues by the service lines:</p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold">&#xa0;</td> <td colspan="10" style="font-weight: bold; text-align: center">For the Years Ended</td><td style="font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="10" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">REVENUES:</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: justify; padding-left: 9pt">Application development services*</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">21,985,214</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">15,720,676</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">20,037,861</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-left: 9pt">Consulting and technical support services</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">3,797,354</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">3,307,662</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,390,948</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt; padding-left: 9pt">Subscription services</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">881,443</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,066,720</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">723,458</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Total revenues</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">26,664,011</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">20,095,058</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">23,152,267</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> </table><br/><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 0px"></td> <td style="width: 24px"> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">*</p></td> <td> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the year ended December 31, 2020 and 2019, certain application development service arrangements included sales of IT equipment. Such revenue of $6,299,982&#xa0;and $1,554,428 was included in the application development service revenue for years ended December 31, 2020 and 2019, respectively.</p></td></tr> </table><br/> 1 6299982 1554428 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold">&#xa0;</td> <td colspan="10" style="font-weight: bold; text-align: center">For the Years Ended</td><td style="font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="10" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td>&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify">REVENUES:</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: justify; padding-left: 9pt">Application development services*</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">21,985,214</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">15,720,676</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">20,037,861</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-left: 9pt">Consulting and technical support services</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">3,797,354</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">3,307,662</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,390,948</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 1.5pt; padding-left: 9pt">Subscription services</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">881,443</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,066,720</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">723,458</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: justify; padding-bottom: 1.5pt">Total revenues</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">26,664,011</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">20,095,058</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">23,152,267</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> </table><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 0px"></td> <td style="width: 24px"> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">*</p></td> <td> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the year ended December 31, 2020 and 2019, certain application development service arrangements included sales of IT equipment. Such revenue of $6,299,982&#xa0;and $1,554,428 was included in the application development service revenue for years ended December 31, 2020 and 2019, respectively.</p></td></tr> </table> 21985214 15720676 20037861 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 14 &#x2014; Subsequent events</b></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On January 8, 2021, the Company entered into a securities purchase agreement (the &#x201c;Purchase Agreement&#x201d;) with Uptown Capital, LLC, a Utah limited liability company (the &#x201c;Investor&#x201d;), pursuant to which the Company issued the Investor an unsecured promissory note on January 8, 2021 in the original principal amount of $1,650,000 (the &#x201c;Note&#x201d;), convertible into ordinary shares, par value $0.00166667 per share, of the Company (the &#x201c;Ordinary Shares&#x201d;), for $1,500,000 in gross proceeds. The transaction contemplated by the Purchase Agreement closed on January 8, 2021. The Note bears interest at a rate of 9% per annum compounding daily. All outstanding principal and accrued interest on the Note will become due and payable twelve months after the purchase price of the Note is delivered by Purchaser to the Company (the &#x201c;Purchase Price Date&#x201d;). The Note includes an original issue discount of $150,000 along with $20,000 for Investor&#x2019;s fees, costs and other transaction expenses incurred in connection with the purchase and sale of the Note. The Company may prepay all or a portion of the Note at any time by paying 120% of the outstanding balance elected for pre-payment.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 23, 2021, the Company entered into a Sales Agreement (the &#x201c;Sales Agreement&#x201d;) with A.G.P./Alliance Global Partners, as sales agent (the &#x201c;Agent&#x201d;), pursuant to which the Company may offer and sell, from time to time, through or to the Agent, as sales agent and/or principal (the &#x201c;Offering&#x201d;) up to $30,000,000 of its ordinary shares, par value $0.00166667 per share (the &#x201c;Shares&#x201d;). Any Shares offered and sold in the Offering will be issued pursuant to the Company&#x2019;s Registration Statement on Form F-3 (the &#x201c;Registration Statement&#x201d;) filed with the Securities and Exchange Commission (the &#x201c;SEC&#x201d;) on February 23, 2021, and the sales agreement prospectus that forms a part of such Registration Statement, following such time as the Registration Statement is declared effective by the SEC, for an aggregate offering price of up to $200 million.&#xa0;</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 23, 2020, the Board approved to register all the shares issuable under the Company&#x2019;s 2018 Amended Option Plan in a registration statement on a Form S-8, representing 9,155,464 ordinary shares issuable under our Amended 2018 Stock Option Plan. As of the date hereof, the Company has issued certain options to the employees, advisors, and consultants of the Company under Plan to purchase in an aggregate amount of 9,155,464 Ordinary Shares the grants have been made under the plan as of the date hereof.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 9, 2021, the Company entered into a securities purchase agreement with YA II PN, LTD. (the &#x201c;Investor&#x201d;), pursuant to which the Investor purchases convertible notes (the &#x201c;Notes&#x201d;) in the principal amount of US$7,000,000 (the &#x201c;Principal&#x201d;), which shall be convertible into the Company&#x2019;s ordinary shares (the &#x201c;Ordinary Shares&#x201d;) par value $0.00166667 per share, and a warrant (the &#x201c;Warrant&#x201d;) to purchase 571,429 Ordinary Shares (the &#x201c;Offering&#x201d;), for gross proceeds of approximately US$6,790,000. The Notes have a conversion price (the &#x201c;Conversion Price&#x201d;) of the lower of (i) US$3.675 per Ordinary Shares (the &#x201c;Fixed Conversion Price&#x201d;), or (ii) 90% of the lowest daily VWAP (as defined in the Note) during the 10 consecutive trading days immediately preceding the conversion date or other date of determination, but not lower than the floor price of US$1.50 per ordinary share. The Principal will become due and payable 12 months from the date of closing (the &#x201c;Maturity Date&#x201d;) and bears an annual interest rate of 6% unless earlier converted or redeemed by the Company. At any time before the Maturity Date, the Investor may convert the Notes at its option into Ordinary Shares at the Conversion Price. The Company has the right, but not the obligation, to redeem (&#x201c;Optional Redemption&#x201d;) a portion or all amounts outstanding under the Notes prior to the Maturity Date at a cash redemption price equal to the outstanding Principal balance to be redeemed, plus the applicable redemption premium, plus accrued and unpaid interest; provided that the trading price of the ordinary shares is less than the Fixed Conversion Price and the Company provides Investor with at least 15 business days&#x2019; prior written notice of its desire to exercise an Optional Redemption. The Investor may convert all or any part of the Notes after receiving a redemption notice, in which case the redemption amount shall be reduced by the amount so converted. No public market currently exists for the Notes, and the Company does not intend to apply to list the Notes on any securities exchange or for quotation on any inter-dealer quotation system. The Notes contain customary events of default, indemnification obligations of the Company and other obligations and rights of the parties. The Warrant is subject to anti-dilution provisions to reflect stock dividends and splits, and future securities offerings at lower prices with certain exception. The Offering will be conducted in two closings. The first closing consists of offer and sale of a Note in the principal amount of $4,000,000. The first closing occurred on April 9, 2021. The second closing consists of offer and sale of a Note in the principal amount of $3,000,000 and the Warrant. The second closing is expected to occur within five (5) trading days of the Company files its Form 20-F with the Securities and Exchange Commission (&#x201c;SEC&#x201d;) for the fiscal year ended December 31, 2020 in compliance with applicable rules and regulations promulgated by the SEC and is subject to various conditions. The Warrant will be exercisable immediately following the date of issuance for a period of five years at an initial exercise price of $3.675. The Warrant is subject to anti-dilution provisions to reflect stock dividends and splits, and future securities offerings at lower prices with certain exception. No public market currently exists for the Warrant, and the Company does not intend to apply to list the Warrant on any securities exchange or for quotation on any inter-dealer quotation system. The Notes and Warrant are and will be offered pursuant to the Company&#x2019;s effective registration statement on Form F-3 (Registration Statement No. 333-253395) previously filed with the SEC and prospectus supplements thereunder.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 30pt">On March 9, 2021, Powerbridge Zhuhai entered into a loan agreement with Bank of China to obtain a loan of $459,770 for a term of one year and at a fixed annual interest rates of 4.5%. The bank loan was guaranteed by Mr. Ban Lor.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 30pt">On March 10, 2021, Powerbridge Zhuhai entered into a loan agreement with Guangfa Bank to obtain a loan of $2,298,851 for a term of one years and at a fixed annual interest rate of 5.3%, The bank loan was guaranteed by Mr. Ban Lor and the company&#x2019;s account receivable of some programs was pledged to secure the loan.&#xa0;</p><br/> 0.09 150000 20000 1.20 30000000 0.00166667 200000000 9155464 9155464 7000000 0.00166667 571429 6790000 (i) US$3.675 per Ordinary Shares (the &#x201c;Fixed Conversion Price&#x201d;), or (ii) 90% of the lowest daily VWAP (as defined in the Note) during the 10 consecutive trading days immediately preceding the conversion date or other date of determination, but not lower than the floor price of US$1.50 per ordinary share. The Principal will become due and payable 12 months from the date of closing (the &#x201c;Maturity Date&#x201d;) and bears an annual interest rate of 6% unless earlier converted or redeemed by the Company. The first closing consists of offer and sale of a Note in the principal amount of $4,000,000. The first closing occurred on April 9, 2021. The second closing consists of offer and sale of a Note in the principal amount of $3,000,000 and the Warrant. The second closing is expected to occur within five (5) trading days of the Company files its Form 20-F with the Securities and Exchange Commission (&#x201c;SEC&#x201d;) for the fiscal year ended December 31, 2020 in compliance with applicable rules and regulations promulgated by the SEC and is subject to various conditions. The Warrant will be exercisable immediately following the date of issuance for a period of five years at an initial exercise price of $3.675. 459770 0.045 2298851 0.053