As filed with the U.S. Securities and Exchange Commission on February 9, 2023.

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Approximate date of commencement of proposed sale to the public: Promptly after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933. Emerging growth company x

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ¨

The information in this prospectus is not complete and may be changed. We will not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

This is an initial public offering of our Class A Ordinary Shares. We are offering on a firm commitment basis, [ ] Class A Ordinary Shares, par value $0.0001 per share (the “Class A Ordinary Shares”). Prior to this offering, there has been no public market for the Class A Ordinary Shares. We expect the initial public offering price will be $[ ] per Class A Ordinary Share. We have applied to list the Class A Ordinary Shares on the Nasdaq Capital Market under the symbol “EPWK”. This offering is contingent upon us listing our Class A Ordinary Shares on Nasdaq or another national exchange. There is no guarantee or assurance that our Class A Ordinary Shares will be approved for listing on the Nasdaq Capital Market or another national exchange.

As of the date of this prospectus, our outstanding share capital consists of Class A ordinary shares and Class B ordinary shares. Mr. Guohua Huang beneficially owns all of our issued and outstanding Class B ordinary shares. These Class B ordinary shares will constitute approximately [ ]% of our total issued and outstanding ordinary shares and [ ]% of the aggregate voting power of our total issued and outstanding ordinary shares immediately after the completion of this offering, assuming that the underwriters do not exercise their option to purchase additional Class A Ordinary Shares. Holders of Class A Ordinary Shares and Class B ordinary shares have the same rights except for voting and conversion rights. Each Class A Ordinary Share is entitled to one vote, and is not convertible into Class B ordinary shares under any circumstances. Each Class B ordinary share is entitled to fifteen votes, subject to certain conditions, and is convertible into one Class A Ordinary Share at any time by the holder thereof.

Investors are cautioned that you are not buying shares of a China-based operating company but instead are buying shares of a shell company issuer incorporated in Cayman Islands that operates through its subsidiaries and contractual arrangements with the variable interest entity (“VIE”), which involves unique risks to investors.

Unless otherwise stated, as used in this prospectus, the terms “EPWK,” “we,” “us,” “our Company,” and the “Company” refer to EPWK Holdings Ltd., an exempted company with limited liability incorporated under the laws of Cayman Islands with no material operations; “EPWK HK” refer to EPWK Holdings Limited, our subsidiary established under the laws of Hong Kong Special Administrative Region (“Hong Kong SAR” or “Hong Kong”); “PRC subsidiary,” “EPWK WFOE” or “WFOE” refer to Yipinweike (Guangzhou) Network Technology Co., Ltd., a limited liability company organized under the laws of the PRC and our indirect wholly owned subsidiary; the term “EPWK VIE” or “VIE” refers to Xiamen EPWK Network Technology Co., Ltd., and its 6 subsidiaries organized under the laws of the PRC, in which we do not own equity interest.

EPWK Holdings Ltd. is a Cayman Islands holding company with no material operations of its own. We are not a Chinese operating company and only conduct our operations through our subsidiaries and contractual arrangements with the variable interest entity, EPWK VIE, in China. This is an offering of the ordinary shares of the offshore holding company in Cayman Islands. Neither we nor our subsidiaries own any equity interest in EPWK VIE. As a result, you are not investing in EPWK VIE and may never hold equity interests in the Chinese operating companies. Because EPWK VIE and its subsidiaries are based in China and are engaged in network culture business, and due to PRC legal restrictions on foreign ownership in the network culture business, we do not own any equity interest in the VIE. Instead, we receive the economic benefits of the VIE’s business operation through a series of contractual agreements (the “VIE Agreements”), which have not been tested in court. The VIE structure provides contractual exposure to foreign investment in China-based companies where Chinese law prohibits direct foreign investment in the operating companies and investors directly holding equity interests in the Chinese operating entities, which involves unique risks to investors. Additionally, as of the date of this prospectus, the VIE agreements have not been tested in a court of law. We and our investors do not have an equity ownership in, direct foreign investment in, or control through such ownership/investment of the VIE. Therefore, the VIE agreements do not give us the same controlling power as if we had equity ownership in the VIE. On August 11, 2022, EPWK WFOE, which is our PRC subsidiary, EPWK VIE, and shareholders of EPWK VIE entered into a series of contractual agreements that established the VIE structure. We have evaluated the guidance in FASB ASC 810 and determined that EPWK WFOE is the primary beneficiary of EPWK VIE and its subsidiaries, for accounting purposes only, because, pursuant to the VIE Agreements, the VIE shall pay service fees equal to all of its net income to EPWK WFOE, while EPWK WFOE has the power to direct the activities of the VIE that can significantly impact the VIE’s economic performance and is obligated to absorb all of losses of the VIE. Such contractual arrangements are designed so that the operations of the VIE are solely for the benefit of EPWK WFOE and, ultimately, EPWK Holdings Ltd, which has indirect ownership in 100% of the equity in EPWK WFOE. Accordingly, under U.S. GAAP and for accounting purpose only, we treat the VIE and its subsidiaries as consolidated affiliated entities and have consolidated their financial results in our financial statements. For a detailed description of the VIE Agreements, see “Our History and Corporate Structure” on page 5.

Because we do not hold equity interests in EPWK VIE, we are subject to risks due to uncertainty of the interpretation and the application of the PRC laws and regulations, including but not limited to limitation on foreign ownership of internet technology companies, regulatory review of oversea listing of PRC companies through a special purpose vehicle, and the validity and enforcement of the VIE Agreements. We are also subject to the risks of uncertainty about any future actions of the PRC government in this regard that could disallow the VIE structure, which would likely prevent us from offering or continue offering securities to investors and result in a material change in our operations, and the value of our Class A Ordinary Shares may depreciate significantly or become worthless.

However, EPWK Holdings Limited, one of our wholly-owned subsidiaries incorporated in Hong Kong, does not engage in any active operations and acts solely as a holding entity. Therefore, we do not believe that the Hong Kong holding company will be subject to similar legal or operational risks that may result in material changes in our operations and/or the value of the securities we are registering for sale or our ability to offer or continually offer securities to investors.

The VIE Agreements may not be effective in providing control over EPWK VIE. We may also be subject to sanctions imposed by PRC regulatory agencies including Chinese Securities Regulatory Commission (“CSRC”), if we fail to comply with their rules and regulations. See “Risk Factors – Risks Relating to Our Corporate Structure”, “Risk Factors – Risks Relating to Doing Business in the PRC” and “Risk Factors – Risks Relating to This Offering and Our Ordinary Shares” for more information.

We currently do not have any cash management policies that dictate the purpose, amount, and procedure of fund transfers among our Cayman Islands holding company, our subsidiaries, and the consolidated VIEs. Rather, the fund can be transferred in accordance with the applicable laws and regulations. We may require additional capital resources in the future, and we may seek to issue additional equity or debt securities or obtain new or expanded credit facilities, which could subject us to operating and financing covenants, including requirements to maintain a certain amount of cash reserves. See “Prospectus Summary – Dividend Distributions or Assets Transfer among the Holding Company, its Subsidiaries and the Consolidated VIE.”

There have been no transfers of cash or other assets, dividends, or distribution made to EPWK and among its subsidiaries and the VIE and its subsidiaries, and they have no plans to make any transfers of cash or other assets, distribution, or dividend payment to EPWK and among themselves in the near future. Neither EPWK nor any of its subsidiaries nor the VIE and its subsidiaries have made any transfer of cash or other assets, dividends. or distributions to investors as of the date of this prospectus. We, our subsidiaries, and the VIE have no present plans to distribute earnings or settle amounts owed under the VIE agreements and plan to retain EPWK’s retained earnings to continue to grow EPWK’s business. For more information, please refer to “Selected Condensed Consolidating Financial Statements of Parent, Subsidiaries, VIE and its Subsidiaries” and the consolidated financial statements starting from page F-3. Our board of directors has complete discretion on whether to distribute dividends, subject to applicable laws. We do not have any current plan to declare or pay any cash dividends on our Class A ordinary shares in the foreseeable future after this offering. We are permitted under the laws of Cayman Islands to provide funding to our subsidiaries in Hong Kong and PRC through loans or capital contributions without restrictions on the amount of the funds, provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts due in the ordinary course of business. Our subsidiary in Hong Kong is also permitted under the laws of Hong Kong SAR to provide funds to us through dividend distribution out of profits available for distribution or other distributable reserves. However, we, our subsidiaries and the VIE’s abilities to use cash held in PRC or in a PRC entity through transfers, distributions, or dividends to fund operations or for other purposes outside of the PRC are subject to restrictions and limitations imposed by the PRC government. Current PRC regulations only permit EPWK WFOE, Yipinweike (Guangzhou) Network Technology Co., Ltd. to pay dividends to the Company out of its accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. The majority of our and the consolidated VIE's revenues are collected in Renminbi; thus, foreign exchange shortages and foreign exchange control may limit our ability to pay dividends or other payments or otherwise meet our obligations denominated in foreign currencies. Furthermore, we may lose our ability to fund operations or for other uses outside of Hong Kong using cash in Hong Kong or a Hong Kong entity if, in the future, the PRC government expands its restrictions and limitations to include Hong Kong or Hong Kong entities. Therefore, our ability to transfer cash between EPWK VIE and us, our subsidiaries outside of China, and investors may be restricted. See “Prospectus Summary - Dividend Distributions or Assets Transfer among the Holding Company, its Subsidiaries and the Consolidated VIE,” “Summary of Risk Factors – We may not be able to use funds held in the PRC or Hong Kong or a PRC or Hong Kong entity to fund operations or for other purposes outside of the PRC due to the interventions or imposition of restrictions and limitations on the ability of us, our subsidiaries, or the consolidated VIE by the PRC government to transfer cash.,” and “Risk Factors – Risk Relating to Doing Business in the PRC – Our ability to transfer cash between subsidiaries, the consolidated VIE, and investors outside PRC or Hong Kong may be significantly restricted by the Chinese government.”

We are subject to certain legal and operational risks associated with our PRC subsidiaries and the VIE’s operations in China. PRC laws and regulations governing our current business operations are sometimes vague and uncertain, and therefore, these risks may result in a material change in the VIE’s operations, significant depreciation of the value of our Class A Ordinary Shares, or a complete hindrance of our ability to offer or continue to offer our securities to investors. Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. In the opinion of our PRC counsel, Beijing Dentons Law Offices, LLP (Fuzhou) (“Dentons”), as of the date of this prospectus, we are not directly subject to these regulatory actions or statements, as we have not implemented any monopolistic behavior. Also, the Cybersecurity Review Measures require online platform operators possessing personal information of more than one (1) million users to apply for the cybersecurity review for their overseas listing, and the cybersecurity review shall focus on the assessment of the impact or potential impact on the national security of the online platform operators’ data processing activities. In compliance with the Measures, we have submitted a written declaration and other materials required for the cybersecurity review to the Cyberspace Administration of China (“CAC”). Upon reviewing our materials in accordance with the Measures, the Office of Cybersecurity Review of the CAC, which is responsible for organizing cybersecurity reviews and developing relevant rules and regulations, informed us that we passed the cybersecurity review for this offering. Our PRC counsel has opined that, as of the date of this prospectus, no effective laws or regulations in the PRC explicitly require us to seek approval from the CSRC or any other PRC governmental authorities for our overseas listing plan, nor has our Company or any of our subsidiaries received any inquiry, notice, warning or sanctions regarding our planned overseas listing from the CSRC or any other PRC governmental authorities. However, since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list on an U.S. national stock exchange. Any change in the PRC laws and regulations could result in a material change in our and the VIE’s operations or the value of our Class A Ordinary Shares or significantly limit or completely hinder our ability to offer or continue to offer our Class A Ordinary Shares to investors and cause the value of our Class A Ordinary Shares to significantly decline or become worthless. Although our PRC subsidiaries and the VIE’s operations in the PRC are subject to certain legal and operational risks, EPWK HK is not currently engaging in any active business activities and merely acting as a holding company. As a result, we do not believe any securities, data security, or anti-monopoly laws or regulations in Hong Kong may impact our operations or the offering of our securities to foreign investors, nor do we foresee any material legal and operational risks associated with EPWK HK except those already disclosed in this Prospectus.

In addition, our Class A Ordinary Shares may be delisted from a national exchange or prohibited from being traded over-the-counter under the Holding Foreign Companies Accountable Act if the Public Company Accounting Oversight Board (“PCAOB”) is unable to inspect our auditor for two consecutive years. Our auditor, WWC, P.C. is headquartered in San Mateo, California and has been inspected by the PCAOB on a regular basis, with the last inspection conducted in November 2021, and it is not subject to the determinations announced by the PCAOB on December 16, 2021 or the Statement of Protocol with the China Securities Regulatory Commission and the Ministry of Finance of the People's Republic of China on August 26, 2022. If trading in our ordinary shares is prohibited under the Holding Foreign Companies Accountable Act in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, the Nasdaq Stock Market may determine to delist our Class A Ordinary Shares. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act (“HFCAA”), which, if passed by the U.S. House of Representatives and signed into law, would reduce the period of time for foreign companies to comply with PCAOB audits to two consecutive years, instead of three, thus reducing the time period before our securities may be prohibited from trading or delisted. On December 29, 2022, a legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”), was signed into law by President Biden. The Consolidated Appropriations Act contained, among other things, an identical provision to HFCAA, which reduces the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two. On August 26, 2022, the CSRC, the Ministry of Finance of the PRC (the “MOF”), and the PCAOB signed a Statement of Protocol (the “Protocol”), governing inspections and investigations of audit firms based in China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. However, uncertainties still exist as to whether and how this new Protocol will be implemented and whether the PCAOB can make a determination that it is able to inspect and investigate completely in mainland China and Hong Kong. On December 15, 2022, the PCAOB determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination. Notwithstanding the foregoing, because we have substantial operations within the PRC through the PRC operating entities, if the PCAOB is not able to fully conduct inspections of our auditor’s work papers in China, you may be deprived of the benefits of such inspection which could result in limitation or restriction to our access to the U.S. capital markets and trading of our securities may be prohibited under the HFCAA. See “Risk Factors – Risks Relating to Doing Business in the PRC – A recent joint statement by the SEC and the PCAOB proposed rule changes submitted by Nasdaq, and the Holding Foreign Companies Accountable Act passed by the US Senate, all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our offering.”

We are an “emerging growth company” as defined under the federal securities laws and will be subject to reduced public company reporting requirements. Please read the disclosures beginning on page 21 of this prospectus for more information.

Furthermore, we are, and following the completion of this offering, will continue to be a “controlled company” as defined under the Nasdaq Stock Market Rules because Mr. Guohua Huang will beneficially own all of our then issued and outstanding Class B Ordinary Shares and will be able to exercise [ ]% of our total voting power. Therefore, we may elect not to comply with certain corporate governance requirements of Nasdaq. Currently, we do not plan to utilize the “controlled company” exemptions with respect to our corporate governance practice after we complete this offering. Please read the disclosures beginning on page 21 of this prospectus for more information.

Investing in our Class A Ordinary Shares involves a high degree of risk, including the risk of losing your entire investment. See “Risk Factors” beginning on page 28 to read about factors you should consider before buying our Class A Ordinary Shares.

We expect our total cash expenses for this offering (including cash expenses payable to our underwriters for their out-of-pocket expenses) to be approximately $[ ], exclusive of the above commissions. These payments will further reduce proceeds available to us before expenses. See “Underwriting”.

This offering is being conducted on a firm commitment basis. The underwriters are obligated to take and pay for all of the shares if any such shares are taken. We agree to grant the underwriters an option for a period of 30 days after the closing of this offering to purchase up to 15% of the total number of our Class A Ordinary Shares to be offered by us pursuant to this offering (excluding shares subject to this option), solely for the purpose of covering overallotments, at the initial public offering price less the underwriting discount. If the underwriters exercise the option in full, the total underwriting discounts and commissions payable will be $[ ] and the total proceeds to us, after underwriting discounts and commissions but before offering expenses, will be approximately $[ ]. If we complete this offering, net proceeds will be delivered to our company on the closing date.

Neither the Securities and Exchange Commission nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

We and the underwriters have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses prepared by us or on our behalf or to which we have referred you. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the Class A Ordinary Shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted or where the person making the offer or sale is not qualified to do so or to any person to whom it is not permitted to make such offer or sale. The information contained in this prospectus is current only as of the date on the front cover of the prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.

Unless otherwise indicated or the context requires otherwise, references in this prospectus to:

Our business is conducted through EPWK WFOE and the VIE in the PRC, using RMB, the currency of China. Our consolidated financial statements are presented in United States dollars. In this prospectus, we refer to assets, obligations, commitments and liabilities in our consolidated financial statements in United States dollars. These dollar references are based on the exchange rate of RMB to United States dollars, determined as of a specific date or for a specific period. Changes in the exchange rate will affect the amount of our obligations and the value of our assets in terms of United States dollars which may result in an increase or decrease in the amount of our obligations (expressed in dollars) and the value of our assets.

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements included elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in our Class A Ordinary Shares, discussed under “Risk Factors”, before deciding whether to buy our Class A Ordinary Shares. This prospectus contains information from an industry report commissioned by us and prepared by Frost & Sullivan, an independent research firm, to provide information regarding our industry and our market position in China. We refer to this report as the F&S report.

Our Business

Our mission is to add value to our users in both service supply and demand sides. We create an innovative and efficient crowdsourcing platform to connect businesses with great talents. We design a digital marketplace with a comprehensive services catalog and an efficient search, find and order process to match talents with service needs.

EPWK Holdings Ltd. was incorporated in the Cayman Islands as an exempted company in March 2022 as a holding company with no material operations of our own, we conduct our operations in China through EPWK VIE and its subsidiaries. Three other competitors and we take up 54.6% market share of the crowdsourcing market in China, and, with US$0.23 billion Gross Merchandise Volume (“GMV”) in the first half of 2022, we are the second largest online marketplace in China, only behind Zhubajie’s US$0.33 billion GMV. Our platform, operated through EPWK VIE, is one of the only two comprehensive crowdsourcing platforms in China, with the other one operated by Zhubajie, and enables businesses (buyers) and service providers (sellers) to find each other. From 2019 to 2021, our platform enabled approximately US$804 million (RMB5.39 billion) of GMV across 2.23 million projects between 15.33 million sellers and 7.67 million buyers from all 34 provinces of China. Specifically, in 2019, we enabled US$210 million of GMV across 0.6 million projects between 12 million sellers and 6 million buyers. In 2020, we enabled US$ 254 million of GMV across 0.7 million projects between 12.32 million sellers and 6.16 million buyers. In 2021, we enabled US$340 million of GMV across 0.9 million projects between 15.33 million sellers and 7.67 million buyers.

Our marketplace platform was launched in 2011. We have achieved significant growth ever since our inception. Our platform users consist of buyers who seek talents for their jobs and sellers who offer different talents and skills. We currently have over 23 million registered users and offer an expansive catalog to provide diversified services to businesses of all sizes. Our average annual active users, or AAU, is 10.13 million. Our daily inquiries well exceed 10,000 from logo design to business name selection to software development. Our GMV increased by 33.5% from US$ 254 million (RMB 1.755 billion) in 2020 to US$ 340 million (RMB 2.19 billion) in 2021.

Our Buyers

Our buyers include micro, small, and medium sized businesses from various industries. The sizes of the buyers range from one-man shops to companies with US$ 23 million (RMB 150 million) revenue. As of December 31, 2021, our service covers more than 2,800 cities and counties and counties with approximately 7.67 million active buyers.

Our Services to Buyers

Access to an expansive catalog of services. Our catalog has seven categories of design, software development, marketing, business writing, interior decoration, life service, and business service. The seven categories cover over 300 items including logo design, animation design, industrial design, website development, software development, copywrite planning, marketing promotion, decoration design and more.

Access to a diverse pool of sellers. We provide online and mobile access to approximately 15.33 million sellers with a broad set of skills. Through our website and mobile apps, buyers can post their jobs for free, connect with these talents easily, and get a broad range of services executed quickly and efficiently.

Reliable customer service. We focus on providing quality customer service to assist our buyers in contracting, delivery, payment, and dispute resolution.

Access to online design sharing database. Our design sharing database kubeijie.com provides design licensing and digital copyright protection services. It collects creative works of many designers in China, providing buyers access to the platform to search creative materials for commercial use. The platform has two major databases: Gallery Center and Yipin Font Library. The Gallery Center contains searchable cartoon images, illustrations, artistic textures, pattern elements, and other creative materials to be licensed or purchased. Yipin Font Library provides 1 free downloadable font and 3 specialized fonts at different price levels.

AI-powered online tools. Our AI-powered online tools at xwzn.cn enable our buyers to generate customized business names and logos instantly based on industries, geographic locations, brand preferences, keywords, and other values. Names and logos are automatically screened for trademark conflicts and are evaluated for registrability.

IP registration and management services. We provide our buyers with general intellectual property services, including trademark registration, copyright registration, patent applications, trademark transactions, and patent transactions. Buyers have access to use our IP database to search their work against registered trademarks, copyrights, and patents to prevent any infringement before any commercial use. Furthermore, when buyers get their tasks fulfilled on our platform, we assist them with IP registration both domestically and internationally.

Other value-added services. We provide our corporate users with business certification service approved by Certification and Accreditation Administration of the People’s Republic of China (“CNCA”). Business certifications are imperative to our corporate users for their business credibility, brand building, IP application, and eligibility to bid for strategic projects. Our services cover intellectual property management system (IPMS) certification, quality and environmental system certification, environmental management system certification, occupational health and safety management system certification, service certification, corporate integrity management system certification, and social responsibility management system certification. We also assist our corporate users with business registration and compliance filings, bookkeeping and tax filings, and license applications.

Our Sellers

Our sellers consist of student artists, professional designers, part-time freelancers, and micro, small, and medium sized businesses with different talents, skills, and services to offer. As of December 31, 2021, we had 15.53 million sellers on our platform.

Our Benefits to Sellers

Access to clients with different needs. Our marketplace platform provides sellers access to quality clients and rewarding projects. With 7.67 million active buyers, our platform publishes tasks ranging from quick to longer-term projects. We enable sellers to focus on what they do best and find clients outside of their local geography.

AI-powered online tools. Our AI-powered online tools at xwzn.cn enable our sellers to generate logo ideas and provide inspiration to sellers. Logos are automatically screened for trademark conflicts to prevent infringement.

Access to online design sharing database. Our design sharing database kubeijie.com provides a platform for sellers to share and trade their creative works. Sellers may license or sell their works to buyers or other sellers.

Reliable customer service. We focus on providing quality customer service to assist our sellers in contracting, IP protection, delivery, payment, and dispute resolution. We work with a third-party bank to collect the funds from the buyer at the time of purchase and release them to the seller upon project completion.

IP registration and management services. We provide our sellers with general intellectual property services, including trademark registration, copyright registration, patent applications, trademark transactions, and patent transactions. Sellers have access to use our IP database to search their work against registered trademarks, copyrights, and patents to prevent infringement before any commercial use.

Business support services. We assist sellers to manage all of the administrative aspects of their business from office space renting and management, company name selection, business registration, and logo design to website construction, product packaging, marketing, bookkeeping, and tax filing.

Our Strengths

Second Largest Online Marketplace with Expansive Service and Geographic Footprint

Three other competitors and we take up 54.6% market share of the crowdsourcing market in China, and, with US$0.23 billion Gross Merchandise Volume (“GMV”) in the first half of 2022, we are the second largest online marketplace in China, only behind Zhubajie’s US$0.33 billion GMV. Our platform, operated through EPWK VIE, is one of the only two comprehensive crowdsourcing platforms in China, with the other one operated by Zhubajie. Although most platforms solely focus on a particular type of industry such as software, IT, and design, our comprehensive platform provide professional services to clients in various fields covering over 300 items in seven categories. The comprehensiveness of our services attracts more buyers to post jobs on our platform, which in turn attracts more sellers with different skills and expands our services, forming a virtuous cycle. From 2019 to 2021, our platform enabled approximately US$ 804 million (RMB 5.39 billion) of GMV across 2.23 million projects. No single client accounted for more than 3 percent of the total client spend. We believe our size and scale demonstrates the effectiveness of our platform in connecting businesses with nationwide talent.

Since our inception, we have connected buyers and sellers in over 2,800 cities and counties in all 34 provinces in China. In 2018, we launched a creative design crowdsourcing platform for local Xiamen entrepreneurs and entrepreneurs across the Strait from Taiwan. It provides access to young Taiwanese people who are interested in understanding the mainland market and starting a business there. It also provides business opportunities for entrepreneurs from both sides of the Strait and integrates mainland’s and Taiwan's talents in advertising design, industrial design, software development, animation design, and other services. Since the launch of the cross-Strait platform, we have assisted over 1,000 businesses including 131 from Taiwan.

Trusted Platform for Buyers and Sellers

We believe our ability to foster trust and credibility on our platform drives growth and differentiates us. Our skilled team uses a combination of the latest technology, data science, and product features to make our platform a trusted online marketplace to get work done. Since inception, EPWK VIE has obtained 5 patents through technological innovation and established a comprehensive service platform by deploying a user evaluation system, a seller ranking system, and data security products. EPWK VIE has created a comfortable service experience for all users while ensuring the security of user information and transactions.

Specifically, EPWK VIE has introduced Node.js + Vue in the front-end to speed up server-side rendering for faster loading and unified mental model and better search engine optimization (“SEO”). Additionally, EPWK VIE uses Golang to reconstruct the business logic of services with large internet traffic to provides powerful service at lower cost to support EPWK VIE platform, which needs to work under high pressure caused by large internet traffic. In terms of operation and maintenance, EPWK VIE established a one-stop operation and maintenance monitoring scheme based on big data and Prometheus & Grafana to monitor, locate, and resolve operating problems. The platform also relies on Kubernetes to optimize operation ability and allocate operating tasks, which solves problems such as insufficient resources, unreasonable task allocation, and system deadlock, and improves computing efficiency.

Based on the above latest technologies, combined with two patented algorithms and bilateral data analysis, the platform is more accurate and efficient in making service recommendation and matching buyers and sellers. At the same time, sellers are able to synchronize buyer information to the Customer Relationship Management system (CRM) for effective service management.

We also provide contracting, third party payment, a feedback system, and dispute resolution to guarantee smooth transactions between buyers and sellers.

Contracting. The users are required to accept a series of agreements. The Registration Agreement governs the conditions and qualifications of being a registered user; the EPWK Platform Service Agreement lists the rights and obligations of being a user of the platform; the Privacy Policy give users notices that the platform will collect, store, use, disclose and protect their personal information during the service period; the Task Submission and Publication Agreement dictates the rules, rights, and obligations relating to offering and purchasing services or products; the Online Store Agreement defines the rights and responsibilities for sellers to operate online stores on the platform; the Online VIP Store Service Contract confirms the rights and responsibilities associated with VIP membership on the platform; the Bid Rules specify methods for sellers to submit proposals to bid for jobs; the Reward Payment Rules clarifies the payment settlement procedures on the platform; and the Transaction Rules provide ways for users to resolve transaction disputes. We also facilitate electronic contracts execution between buyers and sellers to ensure authenticity and improve efficiency. A Refund Policy between buyers and sellers is offered as well.

Third Party Payment. We work with Xiamen International Bank to hold and release funds securely, enabling mutual trust and timely payments.

Feedback System. Our feedback system provides us with sufficient data to select qualified sellers with consistent performance and delivery and eliminate underperforming sellers. The feedback system also enables sellers to build their business reputation by establishing professional visibility and long-term credibility.

Dispute Resolution. We also have a dispute resolution team consisting of well-respected designers, developers, and internal staff to assist disputed parties to reach settlement amicably and efficiently. In the event where no settlement can be reached, we will notify the third-party bank to freeze the fund and release it only when a court order is issued.

Strong R&D Capabilities

We have an independent R&D team to build and maintain our websites and mobile app and develop new products and features. Our teams have expansive experience in demand insight, product creativity, and technology implementation for crowdsourcing platform products. They ensure continuous problem-solving and upgrading of our platform and enable AI-based data analytics to allow us to personalize experiences for both buyers and sellers.

Technology Capabilities for Accurate Matching

Our multidimensional data insights, powerful AI algorithm, and big data capacity enable us to effectively process the data and continuously improve our matching accuracy. Our patented algorithm picks up features and preferences demonstrated through buyers’ published jobs and sellers’ professional profiles. Our platform processes these features and refines our matching to enable talents to find the right opportunities.

Powerful Network Effects

We have heavily invested in building a robust platform with features and functionalities that are necessary to connect buyers and sellers on a large scale. We believe our platform provides a strong-value proposition for both sides of our marketplace and our scale creates powerful network effects that strengthen our competitive differentiation. After more than ten years of operation, we have accumulated a large number of users with a good repurchase rate. We currently have over 10.13 million annual active users. As a result, we have been able to scale our business and our community.

Business Model with Strong Retention Metrics

The growth in our marketplace is driven by long-term and recurring use of our platform by buyers and sellers, which leads to increased revenue for us. Unlike most commission-only based marketplace platforms, our platform is commission-free with all project service fees go to the sellers. We have built a tiered membership system to allow sellers to choose what benefits appeal to them and, consequently, what they are willing to pay for such benefits. It provides flexibility to meet personalized needs and increase user engagement. We have over 10,000 paid members with regular annual renewal.

We also charge service fees to infrequent sellers, transactions with smaller amounts, or manually pairing talents to service needs without AI support for optimized matching. In addition, we provide business support services to sellers, integrating our online resources with offline support to nurture fledgling sellers. While these sellers gain experience and build up their business through our shared office space and one-stop shop administrative services, we also broaden our revenue sources. Users of our commission-based services and business support services exceed well over 0.1 million. We believe our business model has incentivized our users to build and maintain their business presence on our platform.

Prominent Brand Value

We are one of the first crowdsourcing marketplace platforms in China and we believe are well known in the industry. From 2015 to 2017, EPWK VIE was certified as a national level high-tech company by the Ministry of Science and Technology. In 2018, EPWK VIE was included as a case study in the Report on China’s Shared Economy jointly issued by the National Reform and Development Commission and the Ministry of Industry and Information Technology. In 2019, it was again included in the Report of Best Practice of Shared Economy issued by the State Administration of Market Regulation and China Council for the Promotion of International Trade. We also participated in drafting industry standards for creative knowledge and skills sharing platforms with the Business Committee of China Council for Promotion of International Trade. The standards were officially released on July 31, 2020 as the first of its kind to provide guidance to existing and new platforms. The standards have set out general rules and basic requirements, as well as requirements for audit, transaction services, transaction management, information security, and protection of intellectual property rights. It greatly contributed to the standardization process of China’s crowdsourcing industry.

Experienced Management Team

Our management team has a strong track record of scaling and running businesses with a focus on online marketplaces, business-to-business services and software, user psychology and experience optimization, and business innovation. Our Founder and Chief Executive Officer, Mr. Guohua Huang, is recognized as a leading figure in crowdsourcing, media, and marketing. Acting on industry insight, Mr. Huang has led our company on the waves of innovations in the industry and built our crowdsourcing platform with a vision to connect talent with businesses through technology and service. Our Chief Operating Officer Mr. Lin has over 25 years of professional experience in corporate management, brand planning, marketing, and project investment. Our Chief Technology Officer Mrs. Mei Feng has 13 years of experience in Internet industry and product strategic planning, with a focus on platform product design and planning, technology iteration, and innovation.

Growth Strategies

Broaden and Deepen Categories

We intend to focus further on customizing experiences for categories through tailored features and functionalities, thus making it easier and more efficient for buyers to connect with the right sellers.

Attract New Buyers and Sellers Through Marketing Efforts

We intend to expand our marketing efforts to increase awareness of our platform. As a result, the large pool of talents, jobs, and flexible transactions attract new buyers and sellers.

Increase Spend from Existing Buyers

We intend to expand our relationship with our existing buyers and increase their spending on our platform by investing in building new products and premium features.

Provide Better Offerings to Top Sellers

We intend to improve our seller rating system based on sellers’ skills and performances. Our goal is to select 100 top sellers and provide them with premium offerings such as recommending jobs from Fortune 500 buyers and investing in the sellers’ business upgrading and expansion.

Assist Commercialization of Sellers’ Creative Designs

Many sellers may have creative designs but do not know how to commercialize them. We plan to build an ecosystem to serve the creative designers during the entire commercialization process. Our services may cover manufacturing prototypes, reaching out to potential buyers, setting prices, marketing, and building supply chains.

Our History and Corporate Structure

We were incorporated in the Cayman Islands on March 24, 2022. EPWK Group Limited (“EPWK BVI”), a subsidiary wholly owned by us, was incorporated in the British Virgin Islands on April 4, 2022. EPWK Holdings Limited (“EPWK HK”), EPWK BVI’s wholly-owned subsidiary, was incorporated in Hong Kong on April 28, 2022. Yipinweike (Guangzhou) Network Technology Co., Ltd. (“WFOE”), EPWK HK’s wholly owned subsidiary, was organized pursuant to PRC laws on July 26, 2022. Our variable interest entity, Xiamen EPWK Network Technology Co., Ltd. (“EPWK VIE”), was established on March 25, 2011 in Xiamen, Fujian Province, PRC pursuant to PRC laws. EPWK VIE’s shareholders include certain PRC residents and corporate entities controlled by PRC residents.

On August 11, 2022, the Company consummated a reorganization pursuant to which, EPWK WFOE, EPWK VIE and EPWK VIE’s shareholders entered into a series of contractual arrangements. Such agreements are described under “Prospectus Summary – Contractual Arrangements between EPWK WFOE and EPWK VIE. EPWK Holdings Ltd. is a holding company with no business operation other than holding the shares in EPWK HK and EPWK HK is a pass-through entity with no business operation. EPWK WFOE is exclusively engaged in the business of managing the operation of EPWK VIE.

The VIE Structure

The VIE entity, EPWK VIE, is Xiamen EPWK Network Technology Co., Ltd. This is an offering of the ordinary shares of the offshore holding company in Cayman Islands. Neither we nor our subsidiaries own any equity interest in EPWK VIE. As a result, you are not investing in EPWK VIE and may never hold equity interests in the Chinese operating companies. The VIE arrangements have not been tested in a court of law.

EPWK VIE generated revenues of $12,905,356 and $11,366,317 for the years ended June 30, 2020 and 2021, respectively. For the year ended June 30, 2022, it generated revenues of $12,811,143.

Our corporate structure as of the date of this prospectus is as follows:

Because EPWK VIE and its subsidiaries are based in China and are engaged in network culture business, and due to PRC legal restrictions on foreign ownership in the network culture business, we do not own any equity interest in the VIE. Instead, we receive the economic benefits of the VIE’s business operation through a series of contractual agreements (the “VIE Agreements”), which have not been tested in court. We have evaluated the guidance in FASB ASC 810 and determined that EPWK WFOE is the primary beneficiary of EPWK VIE and its subsidiaries, for accounting purposes only, because, pursuant to the VIE Agreements, the VIE shall pay service fees equal to all of its net income to EPWK WFOE, while EPWK WFOE has the power to direct the activities of the VIE that can significantly impact the VIE’s economic performance and is obligated to absorb all of losses of the VIE. Such contractual arrangements are designed so that the operations of the VIE are solely for the benefit of EPWK WFOE and, ultimately, EPWK Holdings Ltd, which has indirect ownership in 100% of the equity in EPWK WFOE. Accordingly, under U.S. GAAP and for accounting purpose only, we treat the VIE and its subsidiaries as consolidated affiliated entities and have consolidated their financial results in our financial statements. Since we do not hold equity interests in EPWK VIE, we are subject to risks due to uncertainty of the interpretation and the application of the PRC laws and regulations, including but not limited to limitation on foreign ownership of internet technology companies, regulatory review of oversea listing of PRC companies through a special purpose vehicle, and the validity and enforcement of the VIE Agreements. We are also subject to the risks of uncertainty about any future actions of the PRC government in this regard that could disallow the VIE structure, which would likely prevent us from offering or continue offering securities to investors or result in a material change in our operations, and the value of our Class A Ordinary Shares may depreciate significantly or become worthless.

The VIE Agreements include:

Exclusive Business Cooperation Agreement,

Call Option Agreements,

Equity Pledge Agreements,

Shareholders Powers of Attorney, and

Irrevocable Commitment Letter.

They are designed to provide our wholly-foreign owned entity, Yipinweike (Guangzhou) Network Technology Co., Ltd., with the power, rights, and obligations equivalent in all material respects to those it would possess as the principal equity holder of EPWK VIE. Under the VIE Agreements, EPWK WFOE is entitled to collect a service fee that is equal to 100% of the net income of the EPWK VIE, and EPWK WFOE has the power to direct the activities of the EPWK VIE that can significantly impact the EPWK VIE’s economic performance and is obligated to absorb losses of the EPWK VIE, which makes us, through our direct ownership of 100% of the equity in EPWK WFOE, the primary beneficiary to receive the economic benefits of the EPWK VIE’s business operation for accounting purposes only. Because our economic interest in the EPWK VIE is more than insignificant exposure to potential losses of or benefits from it, and we have power over the most significant economic activities of the EPWK VIE, we have consolidated the financial results of the EPWK VIE in our consolidated financial statements under generally accepted accounting principles in the U.S. (“U.S. GAAP”) for accounting purpose only. However, the economic interest in and the power over the EPWK VIE are based on contractual agreements and are not equivalent to equity ownership in the business of the EPWK VIE, and the structure involves unique risks to investors. See “Prospectus Summary – Contractual Arrangements between EPWK WFOE and EPWK VIE” for a summary of these VIE Agreements.

The VIE Agreements may not be effective in providing control over EPWK VIE as we are subject to certain legal and operational risks associated with EPWK VIE’s operations in China. PRC laws and regulations governing our current business operations are sometimes vague and uncertain. Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. Since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list on an U.S. exchange. We may also be subject to sanctions imposed by PRC regulatory agencies including the CSRC if we fail to comply with their rules and regulations.

We cannot assure you that the PRC courts or regulatory authorities may not determine that our corporate structure and the VIE Agreements violate PRC laws, rules or regulations. If the PRC courts or regulatory authorities determine that our contractual arrangements are in violation of applicable PRC laws, rules or regulations, the VIE Agreements will become invalid or unenforceable, and EPWK VIE will not be treated as a VIE, and we will not be entitled to treat EPWK VIE’s assets, liabilities and results of operations as our assets, liabilities and results of operations, which could effectively eliminate the assets, revenue and net income of EPWK VIE from our balance sheet, which would most likely require us to cease conducting our business and would result in the delisting of our Class A Ordinary Shares from Nasdaq Capital Market after this offering and a significant impairment in the market value of our Class A Ordinary Shares. If the VIE structure is determined to be in violation of any existing or future PRC laws, rules or regulations, or if EPWK WFOE or the VIE fails to obtain or maintain any of the required governmental permits or approvals, the relevant PRC regulatory authorities would have broad discretion in dealing with such violations, including: imposing fines on the EPWK WFOE or the VIE, revoking the business and operating licenses of EPWK WFOE or the VIE, discontinuing or restricting the operations of EPWK WFOE or the VIE; imposing conditions or requirements with which we, EPWK WFOE, or the VIE may not be able to comply; requiring us, EPWK WFOE, or the VIE to restructure the relevant ownership structure or operations which may significantly impair the rights of the holders of our Class A Ordinary Shares in the equity of the VIE; and restricting or prohibiting our use of the proceeds from our initial public offering to finance our business and operations in China. See “Risk Factors – Risk Relating to Our Corporate Structure – PRC laws and regulations governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations may impair our ability to operate profitable”, and “Risk Factors – Risk Relating to Doing Business in the PRC – The Chinese government exerts substantial influence over the manner in which we must conduct our business and may intervene or influence our operations at any time, which actions could impact our operations materially and adversely, and significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our Class A Ordinary Shares to significantly decline or be worthless.” for more information. See “Risk Factors – Risks Relating to Our Corporate Structure”, “Risk Factors – Risks Relating to Doing Business in the PRC” and “Risk Factors – Risks Relating to This Offering and Our Ordinary Shares” for more information.

Contractual Arrangements between EPWK WFOE and EPWK VIE

Due to PRC legal restrictions on foreign ownership in network culture business, neither we nor our subsidiaries own any equity interest in EPWK VIE. This is an offering of the Class A Ordinary Shares of the offshore holding company in Cayman Islands. You are not investing in EPWK VIE.

EPWK WFOE, EPWK VIE and its shareholders entered into a series of contractual arrangements, also known as VIE Agreements, on August 11, 2022. Under the VIE Agreements, EPWK WFOE is entitled to collect a service fee that is equal to 100% of the net income of the VIE, and WFOE has the power to direct the activities of the VIE that can significantly impact the VIE’s economic performance and is obligated to absorb losses of the VIE, which makes us, through our direct ownership of 100% of the equity in EPWK WFOE, the primary beneficiary to receive the economic benefits of the VIE’s business operation for accounting purposes. Because our economic interest in the VIE is more than insignificant exposure to potential losses of or benefits from it, and we have power over the most significant economic activities of the VIE, we have consolidated the financial results of the VIE in our consolidated financial statements under generally accepted accounting principles in the U.S. (“U.S. GAAP”). The VIE structure has its inherent risks that may affect your investment, including less effectiveness and certainties than direct ownership and potential substantial costs to enforce the terms of the VIE Agreements. We, as a Cayman Islands holding company, may incur significant difficulties and costs in enforcing any rights we may have under the VIE Agreements with the VIE, its founders and owners, in PRC because all of the VIE Agreements are governed by the PRC laws and provide for the resolution of disputes through arbitration in the PRC, where legal environment in the PRC is not as developed as in the United States. Furthermore, these VIE Agreements may not be enforceable in China if PRC government authorities or courts take a view that such VIE Agreements contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event we are unable to enforce these VIE Agreements, we may not be able to exert effective control over EPWK VIE, and our ability to conduct our business may be materially and adversely affected.

Each of the VIE Agreements is described in detail below.

Exclusive Business Cooperation Agreement

Pursuant to the exclusive business cooperation agreement between EPWK WFOE and EPWK VIE, EPWK WFOE has the exclusive right to provide EPWK VIE with technical support services, consulting services and other services, including technical support, technical assistance, technical consulting, and professional training necessary for EPWK VIE’s operation, network support, database support, software services, business management consulting, grant use rights of intellectual property rights, lease hardware and device, provide system integration service, research and development of software and system maintenance, provide labor support and to develop the related technologies based on EPWK VIE’s needs. In exchange, EPWK WFOE is entitled to a service fee that equates to all of the consolidated net income after offsetting previous year’s loss (if any) of EPWK VIE. The service fees may be adjusted based on the actual scope of services rendered by EPWK WFOE and the operational needs of EPWK VIE.

Pursuant to the exclusive business cooperation agreement, EPWK WFOE has the unilateral right to adjust the service fee at any time, and EPWK VIE has no right to adjust the service fee. We believe that such conditions under which the service fee may be adjusted will be primarily based on the needs of EPWK VIE to operate and develop its business in the AR market. For example, if EPWK VIE needs to expand its business, increase research investment or consummate mergers or acquisitions in the future, EPWK WFOE has the right to decrease the amount of the service fee, which would allow EPWK VIE to have additional capital to operate and develop its business.

The exclusive business cooperation agreement remains in effect for 10 years until August 10, 2032 and shall be automatically renewed for one year at the expiration date of the validity term. However, EPWK WFOE shall have the right to terminate this agreement upon giving 30 days’ prior written notice to EPWK VIE at any time.

Call Option Agreements

Pursuant to the call option agreements, among EPWK WFOE, EPWK VIE and the shareholders who collectively owned all of EPWK VIE, such shareholders jointly and severally grant EPWK WFOE an option to purchase their equity interests in EPWK VIE. The purchase price shall be the lowest price then permitted under applicable PRC laws. EPWK WFOE or its designated person may exercise such option at any time to purchase all or part of the equity interests in EPWK VIE until it has acquired all equity interests of EPWK VIE, which is irrevocable during the term of the agreements.

The call option agreements remain in effect for 10 years until August 10, 2032 and shall be automatically renewed for one year at the expiration date of the validity term. However, EPWK WFOE shall have the right to terminate these agreements upon giving 30 days’ prior written notice to EPWK VIE at any time.

Equity Pledge Agreements

Pursuant to the equity pledge agreements, among the shareholders who collectively owned all of EPWK VIE, such shareholders pledge all of the equity interests in EPWK VIE to EPWK WFOE as collateral to secure the obligations of EPWK VIE under the exclusive business cooperation agreement and call option agreements. These shareholders are prohibited or may not transfer the pledged equity interests without prior consent of EPWK WFOE unless transferring the equity interests to EPWK WFOE or its designated person in accordance with the call option agreements.

The equity pledge agreement will take effect from the date of signing, that is, on August 11, 2022, and three days after the agreement is signed, the share pledge will be recorded under the EPWK VIE shareholder register.

The equity pledge agreements remain in effect for 10 years until August 10, 2032 and shall be automatically renewed for one year at the expiration date of the validity term. However, EPWK WFOE shall have the right to terminate these agreements upon giving 30 days’ prior written notice to EPWK VIE at any time.

Shareholders Powers of Attorney (“POAs”)

Pursuant to the shareholders powers of attorney, the shareholders of EPWK VIE give EPWK WFOE an irrevocable proxy to act on their behalf on all matters pertaining to EPWK VIE and to exercise all of their rights as shareholders of EPWK VIE, including the right to attend shareholders meetings, to exercise voting rights and all of the other rights, and to sign transfer documents and any other documents in relation to the fulfillment of the obligations under the call option agreements and the equity pledge agreements.

The shareholders powers of attorney remain in effect for 10 years until August 10, 2032 and shall be automatically renewed for one year at the expiration date of the validity term. However, shareholders of EPWK VIE shall have the right to terminate these agreements upon giving 30 days’ prior written notice to EPWK WFOE at any time.

Irrevocable Commitment Letter

Pursuant to the irrevocable commitment letter, the individual shareholders of EPWK VIE commit that their spouses or inheritors have no right to claim any rights or interest in relation to the shares that they hold in EPWK VIE and have no right to impose any impact on the daily managing duties of EPWK VIE, and commit that if any event which refrains them from exercising shareholders’ rights as a registered shareholder, such as death, incapacity, divorce or any other event, could happen to them, the shareholders of EPWK VIE will take corresponding measures to guarantee the rights of other registered shareholders and the performance of the Contractual Arrangements. The letter is irrevocable and shall not be withdrawn without the consent of EPWK WFOE. The spouses of EPWK VIE individual shareholders also undertake that they have no right to claim any rights or interest in relation to the shares that they hold in EPWK VIE and have no right to impose any impact on the daily managing duties of EPWK VIE.

Based on the foregoing contractual arrangements, which grant EPWK WFOE effective control of EPWK VIE and enable EPWK WFOE to receive all of their expected residual returns, we account for EPWK VIE as a VIE. Accordingly, we consolidate the accounts of EPWK VIE for the periods presented herein, in accordance with Regulation S-X-3A-02 promulgated by the Securities Exchange Commission (“SEC”), and Accounting Standards Codification (“ASC”) 810-10, Consolidation.

Permission Required from the PRC Authorities to Operate the VIE or Offer Our Class A Ordinary Shares to Foreign Investors

In the opinion of our PRC counsel, Dentons, we, our subsidiaries, and the VIE have obtained all the requisite licenses, permissions, and approvals from the PRC government to operate their business and engage in the business activities currently conducted by them in China, including through contractual arrangements, and offer the securities being registered to foreign investors. As of the date of this prospectus, none of our, our subsidiaries’, or the VIE’s licenses, permissions, or approvals have ever been denied. Dentons further advises us that we, our subsidiaries, and the VIE are not currently required to obtain any other licenses, permissions, or approvals from the PRC government, including CSRC or CAC, to operate their business, including through contractual arrangements, or offer the securities being registered to foreign investors. We have disclosed the details of the licenses, permissions, and approvals issued by the PRC government to us, our subsidiaries, or the VIE as of the date of this prospectus. See PROSPECTUS SUMMARY – Our History and Corporate Structure – Requisite Permissions or Approvals on page 14.

The General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the “Opinions on Severely Cracking Down on Illegal Securities Activities According to Law,” or the Opinions, which was made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems will be taken to deal with the risks and incidents of China-concept overseas listed companies, and cybersecurity and data privacy protection requirements and similar matters. The Opinions and any related implementing rules to be enacted may subject us to compliance requirement in the future. Given the current regulatory environment in the PRC, we are still subject to the uncertainty of different interpretation and enforcement of the rules and regulations in the PRC adverse to us, which may take place quickly with little advance notice. On December 28, 2021, the CAC, together with 12 other government departments of the PRC, jointly promulgated the Cybersecurity Review Measures, which became effective on February 15, 2022. The Cybersecurity Review Measures require that an online platform operator which possesses the personal information of at least one million users must apply for a cybersecurity review by the CAC if it intends to be listed in foreign countries. In compliance with the Measures, we have submitted a written declaration and other materials required for the cybersecurity review to the CAC. Upon reviewing our materials in accordance with the Measures, the Office of Cybersecurity Review of the CAC, which is responsible for organizing cybersecurity reviews and developing relevant rules and regulations, informed us that we passed the cybersecurity review for this offering.

In the opinion of our PRC legal counsel, Dentons, there is no explicit provisions under currently effective PRC laws, regulations, or rules require companies like us who indirectly list their shares through contractual arrangements to obtain approvals from PRC authorities. As a result, we and the VIE do not need to obtain approval from CSRC or CAC or other equivalent PRC government authorities according to currently effective PRC laws, regulations and rules to operate our business or offer our Class A Ordinary Shares to foreign investors. However, due to the lack of further clarifications or detailed rules and regulations on overseas listing, Dentons, our counsel as to PRC law, have further advised us that, there are still uncertainties as to how such rules and regulations will be interpreted or implemented and whether the PRC regulatory agencies may adopt new laws, regulations, rules, or detailed implementation and interpretation, and there is no guarantee that PRC regulatory agencies, including the CSRC or CAC, would take the same view as they do. And we cannot assure you that we and the VIE can fully or timely comply with such new laws, regulations, rules or detailed implementation and interpretation. If it is determined that the approval of CSRC or CAC or other PRC government authorities is required for this offering or the operation of VIE, or if the CSRC or CAC or other regulatory agencies later promulgate new rules or interpretation that requires us to obtain their approvals for this offering or the operation of VIE, we may be unable to timely obtain such approvals or waivers to the requirements, and we may face sanctions, by the CSRC or CAC or other PRC regulatory agencies, for failure to timely obtain such approvals. These regulatory authorities may impose fines and penalties on our operations in China, limit our ability to pay dividends to investors outside of China, limit our operating privileges (such as application for, and renew of, various types of licenses and permits) in China, delay or restrict the repatriation of the proceeds from our offshore offerings into China or take other actions that could materially and adversely affect our business, reputation, financial condition, results of operations, prospects.

Additionally, because our Hong Kong subsidiary, EPWK Holdings Limited (“EPWK HK”), is not currently engaging in any active business activities and merely acting as a holding company, we do not believe we need to obtain additional permissions and approvals, including those under securities, data security, or anti-monopoly laws or regulations in Hong Kong, except those already disclosed in this Prospectus.

Dividend Distributions or Assets Transfer among the Holding Company, its Subsidiaries, the Consolidated VIE, and Investors

We intend to keep any future earnings to re-invest in and finance the expansion of our business, and we do not anticipate that any cash dividends will be paid or any assets will be transferred in the foreseeable future. As of the date of this prospectus, no transfers of cash, dividend payment or distribution has been made among the holding company, our subsidiaries, the consolidated VIE, or investors. Under Cayman Islands law, a Cayman Islands company may pay a dividend on its shares out of either profit or share premium amount, provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts due in the ordinary course of business. If we determine to pay dividends on any of our Class A Ordinary Shares in the future, as a holding company, we will be dependent on receipt of funds from our Hong Kong subsidiary, EPWK HK. EPWK HK is permitted under the laws of Hong Kong SAR to provide funds to us through dividend distribution out of profits available for distribution (that is, accumulated realized profits less accumulated realized losses) or other distributable reserves but not through share capital.

However, we, our subsidiaries and the VIE’s abilities to use cash held in use cash held in PRC or in a PRC entity through transfers, distributions, or dividends to fund operations or for other purposes outside of the PRC are subject to restrictions and limitations imposed by the PRC government. Current PRC regulations permit our indirect PRC subsidiaries to pay dividends to the Company only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Each of such entity in China is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation.

The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. Furthermore, if our subsidiaries in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments. If we or our subsidiaries are unable to receive all of the revenues from our operations through the current VIE Agreements, we may be unable to pay dividends on our Class A Ordinary Shares.

Furthermore, we may lose our ability to fund operations or for other uses outside of Hong Kong using cash in Hong Kong or a Hong Kong entity if, in the future, the PRC government expands its restrictions and limitations to include Hong Kong or Hong Kong entities.

Cash dividends, if any, on our Class A Ordinary Shares will be paid in U.S. dollars. If we are considered a PRC tax resident enterprise for tax purposes, any dividends we pay to our overseas shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding tax at a rate of up to 10.0%.

Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC project. However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including without limitation that (a) the Hong Kong resident enterprise must be the beneficial owner of the relevant dividends; and (b) the Hong Kong resident enterprise must directly hold no less than 25% share ownership in the PRC project during the 12 consecutive months preceding its receipt of the dividends. In current practice, a Hong Kong resident enterprise must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by our PRC subsidiary to its immediate holding company, EPWK HK. As of the date of this prospectus, we have not applied for the tax resident certificate from the relevant Hong Kong tax authority. EPWK HK intends to apply for the tax resident certificate when EPWK WFOE plans to declare and pay dividends to EPWK HK. See “Risk Factors- There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiary, and dividends payable by our PRC subsidiary to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.”

Financial Significance of the VIE

Under PRC law, we may provide funding to EPWK WFOE only through capital contributions or loans, and to EPWK VIE only through loans, subject to satisfaction of applicable government registration and approval requirements. We rely on dividends and other distributions from EPWK WFOE to satisfy part of our liquidity requirement. EPWK WFOE enjoys the economic interest in the operations of EPWK VIE in the form of service fees under the contractual arrangements among EPWK WFOE, EPWK VIE, and shareholders of EPWK VIE. For risks relating to the fund flows of our China operations, see “Risk Factors – Risks Relating to Our Corporate Structure – PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans to our PRC subsidiaries and VIE or making additional capital contributions to our wholly foreign-owned subsidiaries in China, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” And “Risk Factors – Risks Relating to Our Corporate Structure – We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.”

The VIE and its subsidiaries contributed to 100% of our consolidated revenue and accounted for 100% of our consolidated total assets and liabilities as of June 30, 2022 and 2021, and for the year ended June 30, 2022 and 2021 and there was no reconciliation performed between the financial position, cash flows and results of operations of the VIE and us.

The following financial information of the VIE and its subsidiaries was included in the consolidated financial statements:

Assets Transfer Between VIE and Other Consolidated Entities

To date, we have not distributed any earnings or settled any amounts owed under the Contractual Arrangements. We do not have any plan to distribute earnings or settle amounts owed under the VIE agreements in the foreseeable future. We do not have any cash flows or transfers of other assets between EPWK VIE and EPWK WFOE for the years ended June 30, 2021 and 2022, and there is no dividends or distributions that EPWK VIE or its subsidiaries have made to our Company. See “Selected Condensed Consolidating Financial Statements of Parent, Subsidiaries, VIE and its Subsidiaries.”

Dividends or Distributions Made to Us and U.S. Investors and Tax Consequences

To date, EPWK VIE has not paid any service fees to us. In addition, we have not made any dividends or distributions to U.S. investors. In addition, subject to the passive foreign investment company rules, the gross amount of any distribution that we make to investor with respect to Class A ordinary shares (including any amounts withheld to reflect PRC withholding taxes) will be taxable as a dividend, to the extent paid out of the current or accumulated earnings and profits of us and EPWK VIE, as determined under United States federal income tax principles. If we are considered a PRC tax resident enterprise for tax purposes, any dividends we pay to our overseas shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding tax. See “Risk Factors – Risks Relating to Doing Business in the PRC – Under the PRC Enterprise Income Tax Law, or the EIT Law, we may be classified as a “resident enterprise” of China, which could result in unfavorable tax consequences to us and our non-PRC shareholders.”

Restrictions on Foreign Exchange and the Ability to Transfer Cash Between Entities, Across Borders and to U.S. Investors

Our PRC counsel, Dentons, has advised us that the PRC government imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. All of our income and income of EPWK VIE is received in Renminbi and shortages in foreign currencies may restrict our ability to pay dividends or other payments, or otherwise satisfy our foreign currency denominated obligations, if any. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions, can be made in foreign currencies without prior approval from SAFE as long as certain procedural requirements are met. Approval from appropriate government authorities is required if Renminbi is converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may, at its discretion, impose restrictions on access to foreign currencies for current account transactions and if this occurs in the future, we may not be able to pay dividends in foreign currencies to our shareholders.

Relevant PRC laws and regulations permit the PRC companies to pay dividends only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Additionally, our PRC subsidiary and EPWK VIE can only distribute dividends upon approval of the shareholders after they have met the PRC requirements for appropriation to the statutory reserves. As a result of these and other restrictions under the PRC laws and regulations, the PRC subsidiaries and EPWK VIE are restricted to transfer a portion of their net assets to us either in the form of dividends, loans or advances. Even though we currently do not require any such dividends, loans or advances from our PRC subsidiary and EPWK VIE for working capital and other funding purposes, we may in the future require additional cash resources from our PRC subsidiary and EPWK VIE due to changes in business conditions, to fund future acquisitions and developments, or merely declare and pay dividends to or distributions to our shareholders.

We currently do not have any cash management policies that dictate the purpose, amount and procedure of fund transfers among our Cayman Islands holding company, our subsidiaries, the consolidated VIEs, or investors. Rather, the funds can be transferred in accordance with the applicable laws and regulations. We may require additional capital resources in the future, and we may seek to issue additional equity or debt securities or obtain new or expanded credit facilities, which could subject us to operating and financing covenants, including requirements to maintain certain amount of cash reserves. There have been no transfers of cash or other assets, dividends, or distribution made to EPWK and among its subsidiaries and VIE and its subsidiaries, and they have no plans to make any transfers of cash or other assets, distribution, or dividend payment to EPWK and among themselves in the near future. Neither EPWK nor any of its subsidiaries nor the VIE and its subsidiaries have made any transfer of cash or other assets, dividends, or distributions to investors as of the date of this prospectus. We, our subsidiaries, and the VIE have no present plans to distribute earnings or settle amounts owed under the VIE agreements and plan to retain EPWK’s retained earnings to continue to grow EPWK’s business. For more information, please refer to “Selected Condensed Consolidating Financial Statements of Parent, Subsidiaries, VIE and its Subsidiaries” and the consolidated financial statements starting from page F-3. Our board of directors has complete discretion on whether to distribute dividends, subject to applicable laws. We do not have any current plan to declare or pay any cash dividends on our Class A ordinary shares in the foreseeable future after this offering. We are permitted under the laws of Cayman Islands to provide funding to our subsidiaries in Hong Kong and PRC through loans or capital contributions without restrictions on the amount of the funds, provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts due in the ordinary course of business. Our subsidiary in Hong Kong is also permitted under the laws of Hong Kong SAR to provide funds to us through dividend distribution out of profits available for distribution or other distributable reserves. However, we, our subsidiaries and the VIE’s abilities to use cash held in PRC or in a PRC entity through transfers, distributions, or dividends to fund operations or for other purposes outside of the PRC are subject to restrictions and limitations imposed by the PRC government. Current PRC regulations only permit EPWK WFOE, Yipinweike (Guangzhou) Network Technology Co., Ltd., to pay dividends to the Company out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. The majority of our and the consolidated VIE’s revenues are collected in Renminbi; thus, foreign exchange shortages and foreign exchange control may limit our ability to pay dividends or other payments or otherwise meet our obligations denominated in foreign currencies. Furthermore, we may lose our ability to fund operations or for other uses outside of Hong Kong using cash in Hong Kong or a Hong Kong entity if, in the future, the PRC government expands its restrictions and limitations to include Hong Kong or Hong Kong entities. Therefore, our ability to transfer cash between EPWK VIE and us, our subsidiaries outside of China, and investors may be restricted. See “Prospectus Summary – Dividend Distributions or Assets Transfer among the Holding Company, its Subsidiaries and the Consolidated VIE,” “Summary of Risk Factors – We may not be able to use funds held in the PRC or Hong Kong or a PRC or Hong Kong entity to fund operations or for other purposes outside of the PRC due to the interventions or imposition of restrictions and limitations on the ability of us, our subsidiaries, or the consolidated VIE by the PRC government to transfer cash,” and “Risk Factors – Risk Relating to Doing Business in the PRC – Our ability to transfer cash between subsidiaries, the consolidated VIE, and investors outside PRC or Hong Kong may be significantly restricted by the Chinese government.”

Requisite Permissions or Approvals

In the opinion of our PRC counsel, Dentons, we, our subsidiaries, and the VIE are currently not required to obtain permissions from any of the PRC authorities to issue our Class A Ordinary Shares to foreign investors. Dentons further advised us that we, our subsidiaries, and the VIE have obtained all the required licenses, permissions, or approvals from the PRC government, as shown below, to operate their respective business in China.

Company Name	Scope of Business Operation	Governmental Permission Required	Status
Xiamen EPWK Network Technology Co., Ltd.	Operate the creative crowdsourcing and knowledge and skills sharing service platform “EPWK.COM”, with creative services as the main content, through the improvement of personalized and accurate recommendations, transaction rules, and online customer service assistants, to match buyers (clients) and sellers (freelancers) on the platform for convenient and efficient transactions.	Value-added telecom business license Network culture business license Radio and TV Program Production and Business Operation License Human resources service license	Approved
Xiamen Yipinweike Network Information Co., Ltd.	Operate the intellectual property service platforms “Yipin Zhishi Chanquan (epbiao.com)” and “Zhiquanxia (zhiquanxia.com)” to provide customers with one-stop services for intellectual property protection and transaction, including domestic and international trademark registration, trademark transaction, copyright registration, patent application, intellectual property standard implementation counseling and other intellectual property services.	Value-added telecom business license	Approved
Xiamen Kutai Network Technology Co.,Ltd.	Operate a self-service corporate brand design platform, “Xiaowei Zhineng (xwzn.cn),” using artificial intelligence and big data technology to provide intelligent tools such as online intelligent name design and check, intelligent LOGO design, and intelligent poster design.	Value-added telecom business license	Approved
Xiamen EPWK Zhibang Finance and Taxation Service Co., Ltd.	Operate the online corporate and taxation service platform “Yipin Caishui (epcsw.com)”, which provides services such as registration, dissolution, bookkeeping, license change, and tax support for small and medium-sized enterprises.	Accounting agency bookkeeping license	Approved
Qi Zhi (Beijing) Certification Co., Ltd.	A certification company approved by the Certification and Accreditation Administration to provide certification services for intellectual property management system, quality management system, environmental management system, occupational health and safety management system, wholesale and retail service, corporate integrity management system, and social responsibility management system and other certification services.	Approval form of certification authority	Approved
Xiamen EPWK Investment Management Co., Ltd.	Operate business incubators to serve innovative entrepreneurs online or in person by providing convenient, open, low-cost workspace, network space, social space and resource sharing space to combine innovation and entrepreneurship and connecting entrepreneurs with investors.	None

Summary of Risk Factors

Risks Relating to Our Business Operations

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

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The COVID-19 pandemic adversely impacted our business for a period of time and has resulted in reductions in demand for our products and services by some of our clients, including our small- and medium-sized business clients, which have been most impacted by the resulting macroeconomic downturn and from which we derive a substantial portion of our GMV and revenue. See Risk Factors – Risks Relating to Our Business Operations – We face risks related to health epidemics such as the COVID-19, and other outbreaks, which could significantly disrupt our operations and adversely affect our business, financial condition and results of operations on page 28.

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Though we had net income of $623,836 in the year ended June 30, 2021, we incurred net losses of $3,405,919 and $529,315 in the same period of 2022 and 2020, respectively. See Risk Factors – Risks Relating to Our Business Operations – We have a history of net losses, anticipate increasing our operating expenses in the future, and may not achieve or sustain profitability on page 29.

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The size of our community of users, including both buyers and sellers, is critical to our success. Any decrease in the attractiveness of our platform relative to these other options available to buyers and sellers could lead to decreased engagement on our platform, which could result in a drop in revenue on our platform. See Risk Factors – Risks Relating to Our Business Operations – Our growth depends on our ability to attract and retain a community of buyers and sellers, and the loss of our users, failure to maintain or grow spend of our current users, or failure to attract new users could adversely impact our business on page 29.

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Any failure to maintain high-quality support, or a market perception that we do not maintain high-quality support, could harm our reputation or adversely affect our ability to market the benefits of our platform to existing and prospective users. See Risk Factors – Risks Relating to Our Business Operations – If we fail to maintain and improve the quality of our platform, we may not be able to attract and retain users on page 31.

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The nature of our business exposes us to claims related to defamation, infringement, misappropriation or other violations of third-party intellectual property rights, rights of publicity and privacy and personal injury torts. See Risk Factors – Risks Relating to Our Business Operations – We may face lawsuits or incur liability as a result of content published or made available through our platform on page 32.

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The market segments for freelance marketplace are highly competitive, rapidly evolving, fragmented, and subject to changing technology, shifting needs, and frequent introductions of new competitors as well as new products and services. See Risk Factors – Risks Relating to Our Business Operations – We face intense competition and could lose market share to our competitors, which could adversely affect our business, financial condition, and operating results on page 33.

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Because we do not possess an internal payment method given the difficulties of obtaining and maintaining a payment license, all payments by our clients are processed by third parties such as UnionPay, Alipay and WeChat Pay. The payment processing business is highly regulated, and it is subject to a number of risks that could materially and adversely affect their abilities to provide payment processing services to us. See Risk Factors – Risks Relating to Our Business Operations – Because we rely upon a third party to perform the payment processing for our clients, the failure or inability of the third party to provide these services could impair our ability to operate on page 36.

Risks Relating to Our Corporate Structure

We are also subject to risks and uncertainties related to our corporate structure, including, but are not limited to, the following:

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All of our current revenue and net income is derived from EPWK VIE in China. Foreign ownership of internet technology businesses, such as distribution of online information, is subject to restrictions under current PRC laws and regulations. See Risk Factors – Risks Relating to Our Corporate Structure – We do not have direct ownership of our operating entities in China but has the power to direct the activities of the VIE that can significantly impact the VIE’s economic performance and is obligated to absorb all of losses of the VIE through VIE Agreements, which may not be effective in providing control over EPWK VIE on page 38.

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We are an offshore holding company incorporated in the Cayman Islands. As a holding company with no material operations, our operations were conducted in China by our subsidiaries and through VIE Agreements with EPWK VIE in China. There are uncertainties regarding the interpretation and application of PRC laws, rules and regulations, including but not limited to the laws, rules and regulations governing the validity and enforcement of the VIE Agreements between EPWK WFOE and EPWK VIE. See Risk Factors – Risks Relating to Our Corporate Structure – Because we are an offshore holding company and our business was conducted through VIE Agreements with EPWK VIE in China, if we fail to comply with applicable PRC law, we could be subject to severe penalties and our business could be adversely affected on page 39.

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As all of the VIE Agreements with EPWK VIE are governed by the PRC laws and provide for the resolution of disputes through arbitration in the PRC, they would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal environment in the PRC is not as developed as in the United States. As a result, uncertainties in the PRC legal system could further limit our ability to enforce these VIE Agreements. See Risk Factors – Risks Relating to Our Corporate Structure – We may incur substantial difficulties and costs in enforcing any rights we may have under the VIE Agreements in PRC on page 40.

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We may be required to obtain the approval of the China Securities Regulatory Commission, or the CSRC, prior to the listing and trading of our Class A Ordinary Shares on an overseas stock exchange. See Risk Factors – Risks Relating to Our Corporate Structure – The approval of the China Securities Regulatory Commission and other compliance procedures may be required in connection with this offering, and, if required, we cannot predict whether we will be able to obtain such approval. As a result, both you and us face uncertainty about future actions by the PRC government that could significantly affect EPWK VIE’s financial performance and the enforceability of the VIE Agreements on page 40.

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Any failure by any of our shareholders who is a PRC resident, or is controlled by a PRC resident, to comply with relevant requirements under these regulations could subject us to fines or sanctions imposed by the PRC government, including restrictions on our overseas or cross–border investment activities, restrictions on EPWK WFOE’s ability to pay dividends or make distributions to us and on our ability to increase our investment in the EPWK WFOE. See Risk Factors – Risks Relating to Our Corporate Structure – Regulations relating to offshore investment activities by PRC residents may limit our ability to acquire PRC companies and could adversely affect our business on page 42.

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The Foreign Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments. However, since it is relatively new, uncertainties still exist in relation to its interpretation and implementation. See Risk Factors – Risks Relating to Our Corporate Structure – Uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations on page 43.

Risks Relating to Doing Business in the PRC

We are based in China and having the majority of our operations in China, and therefore, we face risks and uncertainties relating to doing business in the PRC in general, including, but not limited to, the following:

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Our principal business operation is conducted in the PRC. Shareholder claims or regulatory investigation that are common in the United States generally are difficult to pursue as a matter of law or practicality in China. In the event that the U.S. regulators carry out an investigation on us and there is a need to conduct an investigation or collect evidence within the territory of the PRC, the U.S. regulators may not be able to carry out such investigation or evidence collection directly in the PRC under the PRC laws. See Risk Factors – Risks Relating to Doing Business in the PRC – It may be difficult for overseas shareholders and/or regulators to conduct investigations or collect evidence within China on page 47.

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The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Substantially all of our operations are located in China. Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, environmental regulations, land use rights, property and other matters. See Risk Factors – Risks Relating to Doing Business in the PRC – The Chinese government exerts substantial influence over the manner in which we must conduct our business and may intervene or influence our operations at any time, which actions could impact our operations materially and adversely, and significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our Class A Ordinary Shares to significantly decline or be worthless on page 55.

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We conduct all of our operations and all of our revenue is generated in the PRC. Accordingly, economic, political and legal developments in the PRC will significantly affect our business, financial condition, results of operations and prospects. See Risk Factors – Risks Relating to Doing Business in the PRC – Changes in the policies, regulations, rules, and the enforcement of laws of the PRC government may be quick with little advance notice and could have a significant impact upon our ability to operate profitably in the PRC on page 49.

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While the PRC economy has experienced significant growth in the past two to three decades, growth has been uneven, both geographically and among various sectors of the economy. The PRC government continues to play a significant role in regulating the economy, and any changes in economy-related policies, laws and regulations could adversely affect the economy in China and could have a material adverse effect on our business. See Risk Factors – Risks Relating to Doing Business in the PRC – China’s economic, political and social conditions, laws and regulations, as well as possible interventions and influences of any government policies and actions are uncertain and could have a material adverse effect on our business and the value of our Class A Ordinary Shares on page 49.

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We are subject relating various risks and costs associated with to the collection, use, sharing, retention, security, and transfer of confidential and private information, such as personal information and other data. Our compliance obligations include those relating to the Data Protection Act (As Revised) of the Cayman Islands and the relevant PRC laws in this regard. These laws continue to develop, and the PRC government may adopt other rules and restrictions in the future. Non-compliance could result in penalties or other significant legal liabilities. See Risk Factors – Risks Relating to Doing Business in the PRC – In light of recent events indicating greater oversight by the Cyberspace Administration of China, or CAC, over data security, particularly for companies seeking to list on a foreign exchange, we are subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, our listing on Nasdaq, financial condition, results of operations, and the offering on page 52.

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Uncertainties with respect to the PRC legal system, including uncertainties regarding the enforcement of laws, and sudden or unexpected changes in laws and regulations in China with little advance notice could adversely affect us. See Risk Factors – Risks Relating to Doing Business in the PRC – Uncertainties with respect to the PRC legal system could significantly impact our business operation on page 48.

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Chinese government may intervene or influence our operations at any time or may exert more control over offerings conducted overseas and foreign investment in China-based issuers, which could result in a material change in our operations and/or the value of our ordinary shares. Additionally, the governmental and regulatory interference could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. See Risk Factors – Risks Relating to Doing Business in the PRC – The Chinese government may intervene or influence our operations at any time, which could result in a material change in our operations and/or the value of our shares on page 48.

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It may be difficult for you to bring legal actions against us as we are an exempted company incorporated under the laws of the Cayman Islands, we conduct substantially all of our operations in China, and substantially all of our assets are located in China. See Risk Factors – Risks Relating to Doing Business in the PRC – Because we are a Cayman Islands corporation and all of our business is conducted in the PRC, you may be unable to bring an action against us or our officers and directors or to enforce any judgment you may obtain on page 50.

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We may be subject to the additional and more stringent criteria of Nasdaq for our initial and continued listing, which might cause delay or even denial of our listing application. See Risk Factors – Risks Relating to Doing Business in the PRC – Nasdaq may apply additional and more stringent criteria for our initial and continued listing because we plan to have a small public offering and our insiders will hold a large portion of our listed securities on page 50.

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Substantially all of our revenues and costs are denominated in Renminbi. We are a holding company and we rely on dividends paid by our subsidiary in China for our cash needs. Any significant revaluation of Renminbi may materially and adversely affect our results of operations and financial position reported in Renminbi when translated into U.S. dollars and may have a material and adverse effect on your investment. See Risk Factors – Risks Relating to Doing Business in the PRC – We face exposure to foreign currency exchange rate fluctuations, and such fluctuations could adversely affect our business, results of operations and financial condition on page 54.

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We are required by privacy and data protection laws in China to ensure the confidentiality, integrity and availability of the information of our users, customers and other data, which is also essential to maintaining their confidence in our online services. However, the interpretation and application of such laws in China are often uncertain and in flux. See Risk Factors – Risks Relating to Doing Business in the PRC – In light of recent events indicating greater oversight by the Cyberspace Administration of China, or CAC, over data security, particularly for companies seeking to list on a foreign exchange, we are subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, our listing on Nasdaq, financial condition, results of operations, and the offering on page 52.

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If we are deemed as a PRC “resident enterprise,” we will be subject to PRC enterprise income tax on our worldwide income at a uniform tax rate of 25%. This could have a material and adverse effect on our overall effective tax rate, our income tax expenses and our net income. See Risk Factors – Risks Relating to Doing Business in the PRC – Under the PRC Enterprise Income Tax Law, or the EIT Law, we may be classified as a “resident enterprise” of China, which could result in unfavorable tax consequences to us and our non-PRC shareholders on page 50.

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We may not be able to use funds held in the PRC or Hong Kong or a PRC or Hong Kong entity to fund operations or for other purposes outside of the PRC due to the interventions or imposition of restrictions and limitations on the ability of us, our subsidiaries, or the consolidated VIE by the PRC government to transfer cash. See Risk Factors – Risk Relating to Doing Business in the PRC – Our ability to transfer cash between subsidiaries, the consolidated VIE, and investors outside PRC or Hong Kong may be significantly restricted by the Chinese government on page 59.

Risks Relating to this Offering and Our Ordinary Shares

In addition to the risks described above, we are subject to general risks and uncertainties relating to this offering and our Class A Ordinary Shares, including, but not limited to, the following:

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An active public market for our Ordinary Shares may not develop or be sustained after the offering, in which case the market price and liquidity of our Ordinary Shares will be materially and adversely affected. See Risk Factors – Risks Relating to this Offering and Our Ordinary Shares – There has been no public market for our Class A Ordinary Shares prior to this offering, and you may not be able to resell our Class A Ordinary Shares at or above the price you pay for them, or at all on page 59.

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We cannot assure you that the market price of our Ordinary Shares will not decline significantly below the initial public offering price as that price is determined by negotiations between us and the underwriters, and does not bear any relationship to our earnings, book value or any other indicia of value. See Risk Factors – Risks Relating to this Offering and Our Ordinary Shares – The initial public offering price for our Class A Ordinary Shares may not be indicative of prices that will prevail in the trading market and such market prices may be volatile on page 59.

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The initial public offering price of our Ordinary Shares is substantially higher than the (pro forma) net tangible book value per share of our Ordinary Shares. Consequently, assuming no exercise of over-allotment option by the underwriter, when you purchase our Ordinary Shares in the offering and upon completion of the offering, you will incur immediate dilution. See Risk Factors – Risks Relating to this Offering and Our Ordinary Shares – You will experience immediate and substantial dilution in the net tangible book value of Class A Ordinary Shares purchased on page 59.

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We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future. See Risk Factors – Risks Relating to this Offering and Our Ordinary Shares – We do not intend to pay dividends for the foreseeable future on page 60.

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The market price of our Ordinary Shares may fluctuate significantly in response to numerous factors, many of which are beyond our control. We cannot assure you that the initial public offering price of our Ordinary Shares, or the market price following our initial public offering, will equal or exceed prices in privately negotiated transactions of our shares that have occurred from time to time prior to our initial public offering. See Risk Factors – Risks Relating to this Offering and Our Ordinary Shares – The market price of our Class A Ordinary Shares may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the initial public offering price on page 60.

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Our management will have significant discretion as to the use of the net proceeds to us from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the market price of our Ordinary Shares. See Risk Factors – Risks Relating to this Offering and Our Ordinary Shares – Our management has broad discretion to determine how to use the funds raised in the offering and may use them in ways that may not enhance our results of operations or the price of our Class A Ordinary Shares on page 61.

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We will only be subject to the requirement that we maintain internal controls and that management perform periodic evaluation of the effectiveness of the internal controls after filing the registration statement of which this prospectus is a part. See Risk Factors – Risks Relating to this Offering and Our Ordinary Shares – Our lack of effective internal controls over financial reporting may affect our ability to accurately report our financial results or prevent fraud which may affect the market for and price of our Ordinary Share on page 61.

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As an emerging growth company, we may elect not to comply with such auditor attestation requirements, our investors may not have access to certain information they may deem important. See Risk Factors – Risks Relating to this Offering and Our Ordinary Shares – Because we are an “emerging growth company,” we may not be subject to requirements that other public companies are subject to, which could affect investor confidence in us and our Class A Ordinary Shares on page 62.

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Mr. Guohua Huang is currently the beneficial owners of all of the outstanding Class B ordinary shares or 18.56% of our outstanding shares, which are indirectly held by Mr. Guohua Huang. After the offering, Mr. Guohua Huang will be able to exercise approximately [ ]% of the total voting power of our issued and outstanding share capital. See Risk Factors – Risks Relating to this Offering and Our Ordinary Shares – Since Mr. Guohua Huang will be able to exercise more than [ ]% of the total voting power of our issued and outstanding share capital following the offering, Mr. Guohua Huang will have the ability to elect directors and approve matters requiring shareholder approval on page 62.

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Following this offering, we will be a “controlled company” as defined under the NASDAQ Stock Market Rules because one of our principal shareholders, Mr. Guohua Huang, will beneficially own more than 50% of voting power for the election of directors. For so long as we are a controlled company under that definition, we are permitted to elect to rely, and may rely, on certain exemptions from corporate governance rules. See Risk Factors – Risks Relating to this Offering and Our Ordinary Shares – Following this offering, we will be a “controlled company” within the meaning of the NASDAQ Stock Market Rules and, as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies on page 62.

Holding Foreign Companies Accountable Act

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA. An identified issuer will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC. In June 2021, the Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if signed into law, would reduce the time period for the delisting of foreign companies under the HFCAA to two consecutive years instead of three years. On December 29, 2022, a legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”), was signed into law by President Biden. The Consolidated Appropriations Act contained, among other things, an identical provision to HFCAA, which reduces the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two. If our auditor cannot be inspected by the PCAOB, for two consecutive years, the trading of our securities on any U.S. national securities exchanges, as well as any over-the-counter trading in the U.S., will be prohibited. On September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCAA, whether the PCAOB is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions. On December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, because of positions taken by PRC authorities in those jurisdictions. On August 26, 2022, the CSRC, the MOF, and the PCAOB signed the Protocol governing inspections and investigations of audit firms based in China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. However, uncertainties still exist as to whether and how this new Protocol will be implemented and whether the PCAOB can make a determination that it is able to inspect and investigate completely in mainland China and Hong Kong. On December 15, 2022, the PCAOB determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination.

Our auditor, WWC, Professional Corporation (“WWC”), the independent registered public accounting firm of the Company, is headquartered in San Mateo, California, with no branches or offices outside of the United States. WWC is currently subject to the PCAOB inspections under a regular basis, with the last inspection being conducted in November 2021. Therefore, WWC is not subject to the determinations as to the inability to inspect or investigate registered firms completely announced by the PCAOB on December 16, 2021. However, as more stringent criteria have been imposed by the SEC and the PCAOB, recently, which would add uncertainties to our offering, and we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements. See Risk Factors – Risks Relating to Doing Business in the PRC – A recent joint statement by the SEC and the Public Company Accounting Oversight Board (United States), or the “PCAOB,” proposed rule changes submitted by Nasdaq, and the newly enacted “Holding Foreign Companies Accountable Act” all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our offering.”

Corporate Information

Our principal executive offices are located at Floor 4-602, building A district, No. 359 of Chengyi Street, Xiamen Software Park Phase III Xiamen, Fujian Province, People’s Republic of China, and our phone number is +4006999467. We maintain a corporate website at www.epwk.com. The information contained in, or accessible from, our website or any other website does not constitute a part of this prospectus.

We are and, following the closing of this offering, will be a “controlled company” as defined under the NASDAQ Stock Market Rules because Mr. Guohua Huang will beneficially own [ ]% of voting power for the election of directors.

Implications of Being an Emerging Growth Company, a Foreign Private Issuer, a Controlled Company, and a China-based company.

We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include:

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a requirement to have only two years of audited financial statements and only two years of related selected financial data and management’s discussion and analysis of financial condition and results of operations disclosure;

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an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002;

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an exemption from implementation of new or revised accounting standards until they would apply to private companies and from compliance with any new requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation;

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reduced disclosure obligations regarding executive compensation arrangements; and

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no requirement to seek nonbinding advisory votes on executive compensation or golden parachute arrangements.

We have elected to avail ourselves of the extended transition period for implementing new or revised financial accounting standards. We may take advantage of some or all of the other provisions described above until we are no longer an emerging growth company. We will remain an emerging growth company until the earlier to occur of (1) (a) the last day of the fiscal year following the fifth anniversary of the closing of this offering, (b) the last day of the fiscal year in which our annual gross revenue is $1.07 billion or more, or (c) the date on which we are deemed to be a “large accelerated filer,” under the rules of the U.S. Securities and Exchange Commission, or SEC, which means the market value of our equity securities that is held by non-affiliates exceeds $700 million as of the prior July 31st, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers. Moreover, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. In addition, as a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq listing standards. Following this offering, we intend to rely on home country practice to be exempted from the corporate governance requirements that we have a majority of independent directors on our board of directors and the audit committee of our board of directors has a minimum of three members. As a result, we will not have a majority of independent directors and our audit committee will consist of two independent directors instead of three members. These practices may afford less protection to shareholders than they would enjoy if we complied fully with the Nasdaq listing standards.

Upon the completion of this offering, we will be a “controlled company” as defined under the Nasdaq Stock Market Rules because Mr. Guohua Huang, will beneficially own all of our then issued and outstanding Class B Ordinary Shares and will be able to exercise [ ]% of our total voting power. Under the Nasdaq Stock Market Rules, a “controlled company” may elect not to comply with certain corporate governance requirements. Currently, we do not plan to utilize the “controlled company” exemptions with respect to our corporate governance practice after we complete this offering.

In addition, we are an offshore holding company incorporated in the Cayman Islands. As a holding company with no material operations, our operations were conducted in China by our subsidiaries and through VIE Agreements, with EPWK VIE and its subsidiaries, which involves unique risks to investors. This is an offering of the Class A Ordinary Shares of the offshore holding company in Cayman Islands. You are not investing in EPWK VIE. Neither we nor our subsidiaries own any share in EPWK VIE. Instead, we control and receive the economic benefits of EPWK VIE’s business operation through VIE Agreements, dated August 11, 2022. Under the VIE Agreements, EPWK WFOE is entitled to collect a service fee that is equal to 100% of the net income of the EPWK VIE, and EPWK WFOE has the power to direct the activities of the EPWK VIE that can significantly impact the EPWK VIE’s economic performance and is obligated to absorb losses of the EPWK VIE, which makes us, through our direct ownership of 100% of the equity in EPWK WFOE, the primary beneficiary to receive the economic benefits of the EPWK VIE’s business operation for accounting purposes only. Because our economic interest in the EPWK VIE is more than insignificant exposure to potential losses of or benefits from it, and we have power over the most significant economic activities of the EPWK VIE, we have consolidated the financial results of the EPWK VIE in our consolidated financial statements under generally accepted accounting principles in the U.S. (“U.S. GAAP”). However, the economic interest in and the power over the EPWK VIE are based on contractual agreements and are not equivalent to equity ownership in the business of the EPWK VIE, and the structure involves unique risks to investors. Because of our corporate structure, we are subject to risks due to uncertainty of the interpretation and the application of the PRC laws and regulations, including but not limited to limitation on foreign ownership of internet technology companies, and regulatory review of oversea listing of PRC companies through a special purpose vehicle, and the validity and enforcement of the VIE Agreements. We are also subject to the risks of uncertainty about any future actions of the PRC government in this regard. The VIE Agreements may not be effective in providing control over EPWK VIE. We may also subject to sanctions imposed by PRC regulatory agencies including Chinese Securities Regulatory Commission if we fail to comply with their rules and regulations. Furthermore, Our Class A Ordinary Shares may be prohibited to trade on a national exchange under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors for two consecutive years beginning in 2021. Our auditor is currently subject to PCAOB inspections and PCAOB is able to inspect our auditor.

Selected Condensed Consolidating Financial Statements of Parent, Subsidiaries, VIE and its Subsidiaries

The following tables present selected condensed consolidating financial data of the Parent (EPWK Holdings Ltd.), the Subsidiaries (EPWK Holdings Limited and Yipinweike (Guangzhou) Network Technology Co., Ltd.), the VIE (Xiamen EPWK Network Technology Co., Ltd.) and its Subsidiaries (Xiamen Yipinweike Network Information Co., Ltd, Xiamen Kutai Network Technology Co.,Ltd., Xiamen EPWK Zhibang Finance and Taxation Service Co., Ltd., Xiamen EPWK Investment Management Co., Ltd., Xiamen EPWK Zhongchuang Coffee Co., Ltd., Xiamen EPWK Yixing Business Incubator Management Co., Ltd., Xiamen EPWK Chuanke Incubator Management Co., Ltd., Xiamen EPWK Kutai Incubator Management Co., Ltd., Xiamen EPWK ZhiSheng Intellectual Property Agency Co., Ltd., Qi Zhi (Beijing) Certification Co., Ltd. and Xiamen Kubeijie Network Technology Co. Ltd.), together with eliminating adjustments. Such financial data include condensed consolidating balance sheets data as of June 30, 2022 and 2021 and the related condensed consolidating statements of operations and cash flows data for the year ended June 30, 2022 and 2021.

The following table sets forth selected historical statements of operations for the fiscal year ended June 30, 2022 and 2021, and balance sheets data as of June 30, 2022 and 2021, which have been derived from our audited financial statements for those periods. The financial data are presented in United States dollars (“USD”). Our historical results are not necessarily indicative of the results that may be expected in the future. You should read this data together with our consolidated financial statements and related notes appearing elsewhere in this prospectus as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” appearing elsewhere in the prospectus.

An investment in our Class A Ordinary Shares involves a high degree of risk. Before deciding whether to invest in our Class A Ordinary Shares, you should consider carefully the risks described below, together with all of the other information set forth in this prospectus, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and our consolidated financial statements and related notes. If any of these risks actually occurs, our business, financial condition, results of operations or cash flow could be materially and adversely affected, which could cause the trading price of our Class A Ordinary Shares to decline, resulting in a loss of all or part of your investment. The risks described below and in the documents referenced above are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may also affect our business. You should only consider investing in our Class A Ordinary Shares if you can bear the risk of loss of your entire investment.

We face risks related to health epidemics such as the COVID-19, and other outbreaks, which could significantly disrupt our operations and adversely affect our business, financial condition and results of operations.

Our business could be materially and adversely affected by health epidemics such as the COVID-19 and other outbreaks affecting the PRC. The COVID-19 pandemic adversely impacted our business for a period of time and has resulted in reductions in demand for our products and services by some of our clients, including our small- and medium-sized business clients, which have been most impacted by the resulting macroeconomic downturn and from which we derive a substantial portion of our GMV and revenue. If these clients continue to reduce their spending or cease operations entirely, the COVID-19 pandemic may have a material adverse effect on our business, financial condition, results of operations, and cash flows. Conversely, in 2020 we experienced an increase in GMV and revenue growth driven by an acceleration in the shift toward remote work, due in part to the COVID-19 pandemic. These positive impacts may not continue following the COVID-19 pandemic and the relaxation or lifting of restrictions intended to prevent its spread.

The extent to which the ongoing COVID-19 pandemic will adversely affect our business, financial condition, results of operations, and cash flow will depend on future developments, which are highly uncertain and cannot reasonably be predicted with confidence at this time, including the duration, spread, and severity of the outbreak, or the occurrence of additional “waves” of the outbreak; the timing and efficacy of vaccinations; government responses to the pandemic and potential restrictions on our business and the businesses of our users; the impact of the pandemic on the U.S. and global economies and demand for our offerings; how quickly and to what extent normal economic and operating conditions resume; and the reaction of users and potential users to these developments, among others. The potential impacts of such developments include, but are not limited to:

Although the COVID-19 pandemic did not have a material adverse impact on our financial results for the year ended June 30, 2021, the rapidly changing market and macroeconomic conditions caused by the COVID-19 pandemic have impacted the business of many of our clients, which resulted in a reduction in spend on our work marketplace for some of those affected clients. There can be no assurance that the positive impacts from the COVID-19 pandemic, such as increased client acquisitions, increased client spend, and increased client retention, will continue to offset those parts of our business that have been adversely impacted. Many of these risk factors are unpredictable and outside of our control, and any of these factors could amplify the other risks and uncertainties. Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business due to the macroeconomic downturn that has occurred as a result and is likely to continue in the future. Furthermore, any increase in client acquisition due to the shift toward remote work as a result of the COVID-19 pandemic may slow or decline once the impact of the COVID-19 pandemic is mitigated and users are no longer subject to government restrictions intended to prevent the spread of COVID-19.

We have a history of net losses, anticipate increasing our operating expenses in the future, and may not achieve or sustain profitability.

Although we had net income of $623,836 in the year ended June 30, 2021, we incurred net losses of $3,405,919 and $529,315 in the same period of 2022 and 2020, respectively. We expect to incur net losses for the foreseeable future. As of June 30,2022, we had accumulated deficit of $16.6 million. We expect to make significant expenditures related to the development and expansion of our business, including marketing, platform improvement, system and operation optimization. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently, or at all, to offset these higher expenses. While our revenue has grown in recent years, if our revenue declines or fails to grow at a rate faster than increases in our operating expenses, we will not be able to achieve profitability in future periods. As a result, we may continue to generate losses. We cannot assure you that we will achieve profitability in the future or that, if we do become profitable, we will be able to sustain profitability.

Our growth depends on our ability to attract and retain a community of buyers and sellers, and the loss of our users, failure to maintain or grow spend of our current users, or failure to attract new users could adversely impact our business.

The size of our community of users, including both buyers and sellers, is critical to our success. Our ability to achieve significant growth in revenue in the future will depend, in large part, upon our ability to attract new users and retain existing users on our platform. Over the past few years, we have experienced strong growth in the number of users on our platform, but we do not know whether we will be able to achieve similar user growth rates in the future. Sellers have many different ways of marketing their services and securing buyers, including meeting and contacting prospective buyers through other platforms, advertising to prospective buyers online or offline through other methods, signing up for online or offline third-party agencies or staffing firms or finding employment full-time or part-time through an agency or directly with a business. Buyers have similarly diverse options to find sellers, such as engaging sellers directly, finding sellers through other online or offline platforms or through staffing firms and agencies or hiring temporary, full-time, or part-time employees. Any decrease in the attractiveness of our platform relative to these other options available to buyers and sellers could lead to decreased engagement on our platform, which could result in a drop in revenue on our platform. In addition, a drop in engagement from buyers, including due to a general decrease in spending or otherwise as a result of the COVID-19 pandemic, could lead to diminished network effects and decrease the attractiveness of our platform to sellers. If we fail to attract new sellers or our existing sellers decrease their use of or cease using our platform, the quality or types of services provided by sellers that use our platform are not satisfactory to buyers, buyers may decrease their use of, or cease using, our platform.

Key factors in attracting and retaining buyers include our ability to grow our brand awareness, attract and retain high-quality sellers, and improve our review system. A key factor in attracting and retaining sellers, in turn, is maintaining and increasing the number of buyers using our platform and increasing the quantity and quality of tasks posted on our platform. Thus, achieving growth in our community of buyers and sellers may require us to increasingly engage in sophisticated and costly sales and marketing efforts that may not result in additional users.

Users can generally decide to cease using our platform at any time. Users may stop using our platform and related services if the quality of the user experience on our platform, including our support capabilities in the event of a problem, does not meet their expectations or keep pace with the quality of the user experience generally offered by competitive products and services. Users may also choose to cease using our platform if they perceive that our pricing model is not in line with the value they derive from our platform or for other reasons. In addition, expenditures by buyers may be cyclical and be affected by adverse changes in overall economic conditions or budgeting patterns. If we fail to attract new users or fail to maintain existing users, our revenue may grow more slowly than expected and our business could be materially and adversely affected.

We incurred net losses for the year ended June 30, 2022, and may not be able to generate sufficient operating cash flows and working capital to continue as a going concern. Failure to manage our liquidity and cash flows may materially and adversely affect our financial condition and results of operations. As a result, we may need additional capital, and financing may not be available on terms acceptable to us, or at all.

We incurred net losses of $3,405,919 for the year ended June 30, 2022. As a result, we have generated negative cash flows from operating activities of approximately $3.7 million. We can offer no assurance that we will operate profitably or that we will generate positive cash flows in the next twelve months, given our substantial expenses in relation to our revenue at this stage of our Company. Inability to collect our accounts receivable in a timely and sufficient manner, or the inability to offset our expenses with adequate revenue, may adversely affect our liquidity, financial condition and results of operations. Although we believe that our cash on hand and anticipated cash flows from operating activities will be sufficient to meet our anticipated working capital requirements and capital expenditures in the ordinary course of business for the next 12 months, we cannot assure you this will be the case.

If and when we are unable to generate sufficient cash flows from operations to meet our working capital requirements and various operating needs, we may need to raise additional funds for our operations and such funds may not be available on commercially acceptable terms, if at all. If we are unable to raise funds on acceptable terms, we may not be able to execute our business plan, take advantage of future opportunities, or respond to competitive pressures or unanticipated requirements. This may seriously harm our business, financial condition and results of operations. If we are unable to achieve or maintain profitability, the market price of our shares may significantly decrease. In the event that the Company requires additional funding to finance its operations, the Company’s major shareholders have indicated their intent and ability to provide such financial support, however, there is no assurance such funding will be available when the Company needs it in the future.

If we fail to maintain a balanced pool of freelancers with diversified skills to meet demands of our business customers, our business and operations may be adversely affected.

The size of our community of users, including both buyers and sellers, is critical to our success. Over the past few years, we have experienced strong growth in the number of users on our platform, including the number of business customers with a wide spectrum of demands and freelancers with a variety of skills and talents. However, as the business customers demands evolve constantly, it is important to recruit freelances with diversified skills to meet the most popular demands as well as less frequently requested demands. In the past years, we have increased demand in software development, logo design, brand marketing, copywriting and recruited a large number of freelancers in these fields. We have also strived to recruit and nurture freelancers with skills in areas such as video editing, 3D modeling. If we fail to maintain a balanced pool of freelancers with diversified skills to meet demands of our business customers in the future, our business and operations may be adversely affected.

Users may circumvent our platform, which could adversely affect our business.

Our business depends on buyers and sellers transacting through our platform. Despite our efforts to prevent them from doing so, users may circumvent our platform and engage with or pay each other through other means to avoid the transaction fees and service fees that we charge on our platform. In addition, our efforts to reduce circumvention by buyers and sellers may be costly or disruptive to implement and may fail to have the intended effect or have an adverse effect on our brand or user experience. Additionally, such efforts may reduce the attractiveness of our platform, divert the attention of management or otherwise harm our business.

Additionally, sellers, after utilizing our platform to build their reputation and brand and grow their clientele base, could choose to market their services and skills and transact with buyers outside of our platform.

We rely heavily on the reliability, security and performance of our software. If our software contains serious errors or defects, or we have difficulty maintaining the software, we may lose revenue and market acceptance and may incur costs to defend or settle claims with our customers.

The reliability and continuous availability of our platform is critical to our success. However, software such as ours often contains errors, defects, security vulnerabilities or software bugs that are difficult to detect and correct, particularly when first introduced or when new versions or enhancements are released. Any third-party software we incorporate into our platform may have similar deficiencies. Despite internal testing, our platform may contain serious errors or defects, security vulnerabilities or software bugs that we may be unable to successfully correct in a timely manner or at all, and any ensuing disruptions could result in lost revenue, significant expenditures of capital, a delay or loss in market acceptance and damage to our reputation and brand, any of which could have an adverse effect on our business, financial condition and results of operations. Furthermore, our platform is cloud-based, which allows us to deploy new versions and enhancements to all of our customers simultaneously. To the extent we deploy new versions or enhancements that contain errors, defects, security vulnerabilities or software bugs to all of our customers simultaneously, the consequences would be more severe than if such versions or enhancements were only deployed to a smaller number of customers. In addition, to the extent that we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business, financial condition and results of operations, as well as our reputation, may be adversely affected.

Since customers may use our solutions for processes that are critical to their businesses, errors, defects, security vulnerabilities, service interruptions or software bugs in our platform could result in losses to our customers. Customers may seek significant compensation from us for any losses they suffer or they may cease conducting business with us altogether. Further, a customer could share information about bad experiences on social media, which could result in damage to our reputation. There can be no assurance that provisions typically included in agreements with our customers that attempt to limit exposure to claims would be enforceable or adequate or would otherwise protect us from liabilities or damages with respect to any particular claim. Even if not successful, a claim brought against us by any of our customers would likely be time-consuming, divert management’s attention and be costly to defend and could seriously damage our reputation and brand, making it harder to sell our solutions.

If we fail to maintain and improve the quality of our platform, we may not be able to attract and retain users.

To satisfy both buyers and sellers, we need to continue to improve their user experience as well as innovate and introduce features and services that users find useful and that cause them to use our platform more frequently. This includes improving our technology to optimize search results, tailoring our database to additional geographic and market segments and improving the user-friendliness of our platform and our ability to provide high-quality support. Our users depend on our support organization to resolve issues relating to our platform. Our ability to provide effective support is largely dependent on our ability to attract and retain employees who are well versed in our platform. Any failure to maintain high-quality support, or a market perception that we do not maintain high-quality support, could harm our reputation or adversely affect our ability to market the benefits of our platform to existing and prospective users.

In addition, we need to adapt, expand and improve our platform and user interfaces to keep up with changing user preferences. We invest substantial resources in researching and developing new features and enhancing our platform by incorporating these new features, improving functionality and adding other improvements to meet our users’ evolving demands. The success of any enhancements or improvements to our platform or any new features depends on several factors, including timely completion, adequate quality testing, integration with technologies on our platform and third-party partners’ technologies and overall market acceptance. Because further development of our platform is complex, challenging and dependent upon an array of factors, the timetable for the release of new features and enhancements to our platform is difficult to predict, and we may not offer new features as rapidly as users of our platform require or expect. For example, with the growing propensity of our users to use mobile devices as their main task searching and management devices, we will need to continue modifying and updating our mobile apps to successfully manage the transition of our users to mobile devices. Additionally, the time, money, energy and other resources we dedicate to developing new features or enhancements to our platform may be greater than the short-term, and potentially the total, returns from these new offerings.

It is difficult to predict the problems we may encounter in introducing new features to our platform, and we may need to devote significant resources to the creation, support and maintenance of these features. We provide no assurances that our initiatives to improve our user experience will be successful. We also cannot predict whether any new features will be well received by users, or whether improving our platform will be successful or sufficient to offset the costs incurred to offer these new features. If we are unable to improve or maintain the quality of our platform, our business, prospects, financial condition and results of operations could be materially and adversely affected.

If we are not able to develop and release new products and services, or develop and release successful enhancements, new features, and modifications to our existing products and services, our business could be adversely affected.

The market for our platform is characterized by rapid technological change, frequent product and service introductions and enhancements, changing user demands, and evolving industry standards. The introduction of products and services embodying new technologies can quickly make existing products and services obsolete and unmarketable. We invest substantial resources in researching and developing new products and services and enhancing our platform by incorporating additional features, improving functionality, and adding other improvements to meet our users’ evolving demands in our increasingly highly competitive industry. For example, in 2020 we added certification services, bookkeeping and tax filing services, and built image and font galleries. We have established assessment system with various indicators to maintain the synergy between new products and existing products to fully utilize our existing resources and reduce uncertainty in introducing new products or services.

The success of any enhancements or improvements to, or new features of, our platform or any new products and services, depends on several factors, including timely completion, competitive pricing, adequate quality testing, integration with new and existing technologies on our work marketplace and third-party partners’ technologies, and overall demand and market acceptance consistent with the intent of such products or services. We cannot be sure that we will succeed, on a timely or cost-effective basis, in developing, marketing, and delivering enhancements or new features to our work marketplace or any new products and services that respond to continued changes in the market for talent or business services. Any enhancements or new features to our marketplace or any new products and services may not achieve, and in the past, had caused unintended negative effects on new products. Certain modifications we made to our products, services, and features also lowered user satisfaction and reduced the desirability of our products or services.

Because further development of our platform is complex, challenging, and dependent upon an array of factors, the timetable for the release of new products and services and enhancements to existing products and services is difficult to predict, and we may not offer new products and services as rapidly as users or prospective users of our marketplace require or expect. Any new products or services that we develop may not be introduced in a timely or cost-effective manner, may contain errors or defects, may not be properly integrated with new and existing technologies on our work marketplace or third-party partners’ technologies, may not achieve the intended market acceptance, or may adversely impact existing client spend and user growth and retention. Moreover, even if we introduce new products and services, we may experience a decline in revenue from our existing products and services that is not offset by revenue from the new products or services. In addition, we may lose existing users that choose to use competing products or services. This could result in a temporary or permanent decrease in revenue and adversely affect our business.

We may face lawsuits or incur liability as a result of content published or made available through our platform. Our business model may subject us to disputes between users of our platform.

The nature of our business exposes us to claims related to defamation, infringement, misappropriation or other violations of third-party intellectual property rights, rights of publicity and privacy and personal injury torts. The law relating to the liability of providers of online products or services for activities of their users remains somewhat unsettled, both within the United States and internationally. If a claim is brought against us due to the actions of our users, we could incur significant costs investigating and defending such claims and, if we are found liable, significant damages.

Because we generally recognize revenue from annual subscriptions over the term of an agreement, downturns or upturns in sales are not immediately reflected in our full results of operations.

We offer annual subscriptions and generally recognize revenue over the term of our customers’ contracts. Accordingly, increases in annual subscriptions during a particular period do not translate into immediate, proportional increases in revenue during such period, and a substantial portion of the revenue we recognize during a quarter is derived from deferred revenue from annual subscriptions purchased during previous quarters. Conversely, a decline in new or renewed annual subscriptions in any one quarter may not significantly reduce revenue for that quarter but could negatively affect revenue in future quarters. Accordingly, the effect of significant downturns in new or renewed sales of our solutions may not be fully reflected in our results of operations until future periods.

We face intense competition and could lose market share to our competitors, which could adversely affect our business, financial condition, and operating results.

The market segments for freelance marketplace are highly competitive, rapidly evolving, fragmented, and subject to changing technology, shifting needs, and frequent introductions of new competitors as well as new products and services. The level of competition within, and the frequency and likelihood of increased third-party investment and new competitors entering, such market segment may intensify further due to the COVID-19 pandemic and the resulting increase in remote work, macroeconomic downturn, and increased unemployment rates.

At present, the traditional freelance websites in the domestic freelance and crowdsourcing industries include Zhubajie.com, Project Easy, Time Wealth.com, Mission China, Zhicheng, Creative.com, China Reward Writer, etc. Except for Zhubajie.com with a larger scale of operation, most platforms are not well-known in the market. Their main products and services are homogeneous and lack core competitiveness. They are vulnerable to price wars to compete for users, which reduces the gross profit margin of the entire industry. The overall market influence of the industry is limited as there is no leading company, which affects the overall expansion of the industry.

In the face of fierce competition in the industry, we focus on building our brand awareness, diversifying our products and differentiating our services to better address the unique needs of our clients. We intend to acquire smaller competitors to increase our market share and gradually expand the company’s market influence. However, we cannot assure you that our strategies would be successfully implemented or we may be able to compete successfully against our current and future competitors. If we are unable to compete successfully against current and future competitors, our business, operating results, and financial condition would be adversely impacted.

Our user growth and engagement on mobile devices depend upon effective operation with mobile operating systems, networks, and standards that we do not control.

Mobile devices are increasingly used for platform transactions. A growing portion of our users access our platform through mobile devices. There is no guarantee that popular mobile devices will continue to support our platform or that mobile device users will use our platform rather than competing products. We are dependent on the interoperability of our platform with popular mobile operating systems that we do not control, such as Android and iOS, and any changes in such systems that degrade the functionality of our website or apps or give preferential treatment to competitors could adversely affect our platform’s usage on mobile devices. Additionally, in order to deliver a high-quality mobile user experience, it is important that our platform is designed effectively and works well with a range of mobile technologies, systems, networks and standards that we do not control. We may not be successful in developing relationships with key participants in the mobile industry or in developing features that operate effectively with these technologies, systems, networks or standards. In the event that it is more difficult for our users to access and use our platform on their mobile devices or users find our mobile offering does not effectively meet their needs, our competitors develop products and services that are perceived to operate more effectively on mobile devices or our users choose not to access or use our platform on their mobile devices or use mobile products that do not offer access to our platform, our user growth and user engagement could be adversely impacted.

If we fail to maintain and enhance our brand, our business, results of operations and prospects may be materially and adversely affected.

We believe that maintaining and enhancing our brand is of significant importance to the success of our business. A well-recognized brand is critical to increasing the number and the level of engagement of sellers and, in turn, enhancing our attractiveness to buyers. Successful promotion of our brand and our platform depends on, among other things, the effectiveness of our marketing efforts, our ability to provide a reliable, trustworthy and useful platform, the perceived value of our platform and our ability to provide quality support. In order to maintain and enhance our brand, we will need to continuously invest in marketing programs that may not be successful in achieving meaningful awareness levels. However, brand promotion activities may not yield increased revenue, and even if they do, the increased revenue may not offset the expenses we incur in building and maintaining our brand. We have conducted and may continue to conduct various marketing and brand promotion activities. We cannot assure you, however, that these activities will be successful or that we will be able to achieve the brand awareness we expect. In addition, our competitors may increase the intensity of their marketing campaigns, which may force us to increase our advertising spend to maintain our brand awareness.

In addition, any negative publicity relating to our platform, regardless of its veracity, could harm our brand. If our brand is harmed, we may not be able to grow or maintain our seller base, and our business, prospects, financial condition and results of operations could be materially and adversely affected.

We operate in a competitive environment with rapidly evolving technologies and market trends for business incubators.

There are business incubators as well as various investment funds and angel investors in China and abroad whose operations compete with ours, some of which, today or in the future, may possess similar or superior resources and financial capabilities. If the VIE is unable to successfully compete with these incubators, funds and/or angel investors in terms of sourcing, funding and executing investments in new ventures, this could result in lost investment opportunities and, in turn, adversely affect our ability to attract entrepreneurs and our standing in the community.

In addition, the industries which we and our portfolio companies are operating in are characterized by rapid technological changes and evolving trends. Our competitors and those of our portfolio companies, may develop technologies and products which compete with our technologies and products and those of our portfolio companies. Such competing technologies and products may prove to be more effective or less costly than our and our portfolio companies’ products. There can be no assurance that our and our portfolio companies’ products will be competitive against the products of competitors, or that we or our portfolio companies will be able to keep pace with technological developments and changes in market trends. Such technological advances and evolving market trends could make our and our portfolio companies’ technologies and products partially or completely redundant, or impair future sales, which could have a material adverse impact on our business, results of operations or financial condition.

Similarly, if we or our portfolio companies fail to identify emerging technologies or trends, or to respond to such technologies or trends in a timely and cost-effective manner, our ability to sustain or grow our business may suffer. Our portfolio companies are currently focused on internet, software technology and information services, and therefore, are subject to any market vagaries in these industries. Accordingly, the nature of the competition and development of trends in the industries that we and our portfolio companies operate in could have a material adverse impact on our business, financial condition, results of operations and prospects.

We rely on search engines, social networking sites and online streaming services to attract a meaningful portion of our users, and if those search engines, social networking sites and online streaming services change their listings or policies regarding advertising, or increase their pricing or suffer problems, it may limit our ability to attract new users.

Many users locate our platform through internet search engines, such as Baidu, and advertisements on social networking sites and online streaming services, such as WeChat, Douyin and Toutiao. If we are listed less prominently or fail to appear in search results for any reason, visits to our website could decline significantly, and we may not be able to replace this traffic. Search engines revise their algorithms from time to time in an attempt to optimize their search results. If the search engines on which we rely for algorithmic listings modify their algorithms, we may appear less prominently or not at all in search results, which could result in reduced traffic to our website that we may not be able to replace. Additionally, if the costs of search engine marketing services, such as Baidu, increase, we may incur additional marketing expenses, we may be required to allocate a larger portion of our marketing spend to this channel or we may be forced to attempt to replace it with another channel (which may not be available at reasonable prices, if at all), and our business, financial condition and results of operations could be adversely affected.

Furthermore, competitors may in the future bid on our brand names and other search terms that we use to drive traffic to our website. Such actions could increase our marketing costs and result in decreased traffic to our website. In addition, search engines, social networking sites and video streaming services may change their advertising policies from time to time. If any change to these policies delays or prevents us from advertising through these channels, it could result in reduced traffic to our website and sales of our solutions. Additionally, new search engines, social networking sites, video streaming services and other popular digital engagement platforms may develop in specific jurisdictions or more broadly that reduce traffic on existing search engines, social networking sites and video streaming services. If we are not able to achieve awareness through advertising or otherwise, we may not achieve significant traffic to our website.

Failure to protect confidential information of our users and network against security breaches could damage our reputation and brand and substantially harm our business and results of operations.

A significant challenge to the crowdsourcing industry is the secure storage of confidential information and its secure transmission over public networks. A majority of the orders and the payments for our products and services are made through our website and mobile app. In addition, all online payments are settled through third-party online payment services. Maintaining complete security on websites, app and mini programs and systems for the storage and transmission of confidential or private information, such as users’ personal information, payment-related information and transaction information, is essential to maintain consumer confidence in our systems.

We have adopted strict security policies and measures, including encryption technology, to protect our proprietary data and buyer information. We have not encountered instances of material data breach or unauthorized system intrusion. However, advances in technology, the expertise of hackers, new discoveries in the field of cryptography or other events or developments could result in a compromise or breach of the technology that we use to protect confidential information. We may not be able to prevent third parties, especially hackers or other individuals or entities engaging in similar activities, from illegally obtaining such confidential or private information we hold with respect to our users. Such individuals or entities obtaining confidential or private information may further engage in various other illegal activities using such information. In addition, we have limited control or influence over the security policies or measures adopted by third-party providers of online payment services through which some of our users may choose to make payment for purchases. Any negative publicity on our safety or privacy protection mechanisms and policies, and any claims asserted against us or fines imposed upon us as a result of actual or perceived failures, could have a material and adverse effect on our public image, reputation, financial condition and results of operations. Any compromise of our information security or the information security measures of our contracted commercial bank could have a material and adverse effect on our reputation, business, prospects, financial condition and results of operations.

We may need additional capital to fund our future operations and, if it is not available when needed, we may need to reduce our planned expansion and marketing efforts, which may reduce our revenue.

We believe that our existing working capital and cash available from operations will enable us to meet our working capital requirements for at least the next 12 months. However, if cash from future operations is insufficient, or if cash is used for acquisitions or other currently unanticipated uses, we may need additional capital. As a result, we could be required to raise additional capital. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities could result in dilution of the shares held by existing shareholders. If additional funds are raised through the issuance of debt or equity securities, such securities may provide the holders certain rights, preferences, and privileges senior to those of shareholders holding Class A Ordinary Shares, and the terms of any such debt securities could impose restrictions on our operations. We cannot assure you that additional capital, if required, will be available on acceptable terms, or at all. If we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned product development and marketing efforts, which could harm our business, financial condition and operating results.

If we are unable to manage our anticipated growth effectively, our business could be adversely affected.

In order to develop our business, we need to hire and retain key managers and executives in all areas of our operations. Our future operating results depend to a large extent on our ability to develop and manage expansion and growth successfully. With possible rapid development of our operation, increased capital requirements, the continuous expansion of business scope, and the continuous increase of personnel, higher requirements will be placed on our corporate governance and management capabilities. For us to manage such growth, we must put in place legal and accounting systems, and implement human resource management and other tools. We have taken preliminary steps to put this structure in place, such as seeking qualified personnel, strengthening different levels of management systems and providing regular corporate governance trainings. However, there is no assurance that we will be able to expand our business or successfully manage any growth that may result. Failure to expand our operations or manage our growth effectively could materially and adversely affect our ability to market our services in multiple venues.

We may be subject to third party payment services and money transmitter regulations that may materially and adversely affect our business.

We rely on a third party, Xiamen International Bank, to collect funds from buyers, remit payments to sellers and hold funds in connection with user balances. Although we believe that by working with a third party, our operations comply with existing Chinese laws and regulatory requirements related to escrow, money transmission and the handling or moving of money, existing laws or regulations may change, and interpretations of existing laws and regulations may also change. If the quality, utility, convenience or attractiveness of third-party payment services declines, or we have to change the pattern of using these payment services for any reason, the attractiveness of our platform could be materially and adversely affected.

As a result, we could be required to be licensed as an escrow agent or a money transmitter (or other similar licensee) or may choose to obtain such a license even if not required. Such a decision could also require us to register as a money services business under applicable laws and regulations. It is also possible that we could become subject to regulatory enforcement or other proceedings in those states or other jurisdictions with escrow, money transmission or other similar statutes or regulatory requirements related to the handling or moving of money, which could in turn have a significant impact on our business, even if we were to ultimately prevail in such proceedings. Any developments in the laws or regulations related to escrow, money transmission or the handling or moving of money or increased scrutiny of our business may lead to additional compliance costs and administrative overhead.

The application of laws and regulations related to escrow, money transmission and the handling or moving of money is complex and uncertain, particularly as they relate to new and evolving business models. If we are or have at any point in time been in violation of one or more escrow or money transmitter or other similar statutes or regulatory requirements related to the handling or moving of money in any jurisdiction, we may be subject to the imposition of fines, users in the relevant jurisdiction may be unable to use our platform, we may be subject to civil liability or criminal liability and our business, prospects, financial condition and results of operations could be materially and adversely affected.

Because we rely upon a third party to perform the payment processing for our clients, the failure or inability of the third party to provide these services could impair our ability to operate.

Because we do not possess an internal payment method given the difficulties of obtaining and maintaining a payment license, all payments by our clients are processed by third parties such as UnionPay, Alipay and WeChat Pay. These payment service providers are used by most e-commerce platforms for their convenience, reliability and cost-effectiveness. However, the payment processing business is highly regulated, and it is subject to a number of risks that could materially and adversely affect their abilities to provide payment processing services to us, including:

We rely on the convenience and ease of use that third party’s payment methods provide to our users. If the quality, utility, convenience or attractiveness of these payment services declines for any reason, the attractiveness of our services could be materially impaired. If we need to migrate to other third-party payment services for any reason, the transition could require considerable time and management resources, and the third-party payment services may not be as effective, efficient or well-received by our clients. Further, our clients may be reluctant to use a different payment system.

If we fail to hire, retain and train qualified employees or sufficient workforce while controlling our labor costs, our business may suffer.

Our ability to maintain current profitability and grow business operation depend on our ability to attract, retain and train qualified employees with reasonable cost. Labor costs in China have increased with China’s economic development. Our labor costs include wages, performance bonuses and other costs. In the fiscal years ended June 30, 2022 and 2021, labor costs have accounted for 52.75% and 88.55% of our sales expenses respectively. To balance employee incentives and cost control, we have taken measures to design and adjust our salary structures to keep the Company’s development strategies in line with employees’ individual development needs. If we cannot effectively control and reduce labor and other operating costs while our business continues to grow, our business conditions, financial conditions and operating results may be adversely affected.

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

Under the PRC Social Insurance Law and the Administrative Measures on Housing Fund, companies operating in China are required to participate in various government sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of their employees up to a maximum amount specified by the local government from time to time at locations where the businesses are operated. During the fiscal years ended June 30, 2022 and 2021, we did not pay social insurance premiums and the housing provident fund in full. According to the Provisional Regulations on the Collection and Payment of Social Insurance Premiums, because we did not pay the social insurance premiums in full for all employees, premium collection agencies may order us to pay or make up the arrears and may impose an overdue fine. If we fail to pay such overdue fine, we may be further fined. According to the Regulations on the Administration of Housing Provident Fund, due to the failure to pay the housing provident fund for all employees, we may be ordered with a deadline for payment from the Housing Provident Fund Management Center. In addition, if we do not make the housing accumulation fund deposit registration or does not establish the housing provident fund account for the employees, the housing provident fund management center will order a deadline for payment, and if we fail to pay the housing provident fund within the deadline, we will be imposed a fine of not less than RMB 10,000 (approximately $1,500) and not more than RMB 50,000 (approximately $7,800). We cannot assure you that our employees will not complain to the relevant authorities regarding the basis of how we had made the contribution for them, which may in turn result in the relevant authorities ordering us to make supplemental contribution and/or imposing late fees or fines on us, among other things. If we are subject to late fees or fines in relation to the underpaid employee benefits, our financial condition and results of operations may be adversely affected.

Our success depends substantially on the continued retention of certain key personnel and our ability to hire and retain qualified personnel in the future to support our growth and execute our business strategy.

If one or more of our senior executives or other key personnel are unable or unwilling to continue in their present positions, our business may be disrupted and our financial condition and results of operations may be materially and adversely affected. We depend on the abilities and participation of our current management and technology team generally, we rely particularly upon Mr. Guohua Huang who is responsible for the development and implementation of our business plan. The loss of the services of Mr. Guohua Huang or any senior management for any reason could significantly adversely impact our business and results of operations. We implement the following measures to avoid the loss of core personnel and stabilize our workforce: (1) we conduct regular remuneration surveys and build attractive compensation system in accordance with industry trends; (2) we provide comprehensive benefits for employees; (3) we have built a comprehensive promotion and training system to provide employees with sufficient career development opportunities. Competition for senior management and senior technology personnel in the PRC is intense and the pool of qualified candidates is very limited. We cannot assure you that the services of our senior executives and other key personnel will continue to be available to us, or that we will be able to find a suitable replacement for them if they were to leave.

We may not be able to adequately protect our intellectual property rights, and our competitors may be able to offer similar products and services, which would harm our competitive position.

Our success depends in part upon our intellectual property rights. We rely primarily on copyright, trade secret laws, confidentiality procedures, license agreements and contractual provisions to establish and protect our proprietary rights over our products, procedures and services. Other persons could copy or otherwise obtain and use our technology without authorization or develop similar IP independently. We may also pursue the registration of our domain names, trademarks, and service marks in other jurisdictions, including the United States. However, the intellectual property laws in China are not considered as strong as comparable laws in the United States or the European Union. We cannot assure you that we will be able to protect our proprietary rights. Further, our competitors may be able to independently develop similar or more advanced technology, duplicate our products and services or design around any intellectual property rights we hold. Further, our intellectual property rights may be subject to termination or expirations. The loss of intellectual property protections or the inability to timely regain intellectual property protections could harm our business and ability to compete.

We rely on a commercial bank, Xiamen International Bank, for payment processing and escrow services on our platform. If the payment service is restricted or curtailed in any way or becomes unavailable to us or our buyers for any reason, our business may be materially and adversely affected.

All online payments for products and services sold or provided through our platform are settled through Xiamen International Bank (the “Bank”). Our business depends on the billing, payment and escrow systems of the Bank to maintain accurate records of payments of sales proceeds by buyers and collect such payments. If the quality, utility, convenience or attractiveness of the payment processing and escrow services decline, or we have to change the pattern of using the payment services for any reason, the attractiveness of our platform could be materially and adversely affected.

The Bank we work with is subject to the supervision of the People's Bank of China (“PBOC”). The PBOC may publish rules, guidelines and interpretations from time to time regulating the operation of financial institutions and payment service providers that may in turn affect the pattern of services provided by such entities for us.

In addition, we cannot assure you that we will be successful in entering into and maintaining amicable relationships with the Bank. Identifying, negotiating and maintaining amicable relationships with the Bank require significant time and resources. Our current agreements with the Bank also do not prohibit it from working with our competitors. It could choose to terminate its relationships with us or propose terms that we cannot accept. In addition, the Bank may not perform as expected under our agreements with it, and we may have disagreements or disputes with the Bank, any of which could adversely affect our brand and reputation as well as our business operations.

Our business operation may be materially affected by the increasing inflation rate.

Although we have not been materially affected by inflation in the past, we may be affected in the future if China experiences higher rates of inflation. For example, certain operating expenses, such as the employee compensation and rental and related expenses for office may increase as a result of higher inflation. Additionally, high inflation could significantly reduce the value and purchasing power of our assets, and we are not able to hedge our exposure to higher inflation in China. As a result, we may have to charge higher prices on our services, which may negatively affect our ability to retain customers or attract new ones.

We do not have direct ownership of our operating entities in China but has the power to direct the activities of the VIE that can significantly impact the VIE’s economic performance and is obligated to absorb all of losses of the VIE through VIE Agreements, which may not be effective in providing control over EPWK VIE.

We do not have direct ownership of our operating entities in China, but have control rights and the rights to the assets, property, and revenue of EPWK VIE and its subsidiaries through VIE Agreements. All of our current revenue and net income is derived from EPWK VIE in China. Foreign ownership of internet technology businesses, such as distribution of online information, is subject to restrictions under current PRC laws and regulations. Also, foreign investors are not allowed to invest in network culture business (except for music) in accordance with the Special Administrative Measures for Entrance of Foreign Investment (Negative List) (2021 Version) promulgated on December 27, 2021 and became effective on January 1,2022, respectively, and other applicable laws and regulations.

To comply with PRC laws and regulations, we do not intend to have an equity ownership interest in EPWK VIE but rely on the VIE Agreements with EPWK VIE to control and operate its business. However, as discussed above, these VIE Agreements may not be effective from PRC laws in providing us with the necessary control over EPWK VIE and its operations. Any deficiency in these VIE Agreements may result in our loss of control over the management and operations of EPWK VIE, which will result in a significant loss in the value of an investment in our company.

Because we are an offshore holding company and our business was conducted through VIE Agreements with EPWK VIE in China, if we fail to comply with applicable PRC law, we could be subject to severe penalties and our business could be adversely affected.

We are an offshore holding company incorporated in the Cayman Islands. As a holding company with no material operations, our operations were conducted in China by our subsidiaries and through VIE Agreements with EPWK VIE, the VIE in China. Pursuant to the VIE Agreements, the VIE shall pay service fees equal to all of its net income to EPWK WFOE, while EPWK WFOE has the power to direct the activities of the VIE that can significantly impact the VIE’s economic performance and is obligated to absorb all of losses of the VIE. Such contractual arrangements are designed so that the operations of the VIE are solely for the benefit of EPWK WFOE and, ultimately, EPWK Holdings Ltd, which has indirect ownership in 100% of the equity in EPWK WFOE. As a result, under United States generally accepted accounting principles, the assets and liabilities of EPWK VIE are treated as our assets and liabilities and the results of operations of EPWK VIE are treated in all respects as if they were the results of our operations for accounting purpose only. There are uncertainties regarding the interpretation and application of PRC laws, rules and regulations, including but not limited to the laws, rules and regulations governing the validity and enforcement of the VIE Agreements between EPWK WFOE and EPWK VIE.

The Provisions Regarding Mergers and Acquisitions of Domestic Projects by Foreign Investors (the “M&A Rules”) requires an overseas special purpose vehicle that are controlled by PRC companies or individuals formed for the purpose of seeking a public listing on an overseas stock exchange through acquisitions of PRC domestic companies using shares of such special purpose vehicle or held by its shareholders as considerations to obtain the approval of the China Securities Regulatory Commission, or the CSRC, prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange. However, the application of the M&A Rules remains unclear. If CSRC approval is required, it is uncertain whether it would be possible for us to obtain the approval. Any failure to obtain or delay in obtaining CSRC approval for this offering would subject us to sanctions imposed by the CSRC and other PRC regulatory agencies.

Furthermore, numerous regulations, guidelines and other measures have been or are expected to be adopted under the umbrella of or in addition to the Cybersecurity Law and Data Security Law, including (i) the amended Cybersecurity Review Measures published on December 28, 2021, which came into effect on February 15, 2022, provide that a “network platform operator” that possesses personal information of more than one million users and seeks a listing in a foreign country must apply for a cybersecurity review, and (ii) the Measures for Security Assessment of Data Export Security issued by the CAC on July 7, 2022, which will go into effect on September 1, 2022, it provides clearer and more specific guidance for data processors to apply for security assessments, and for the competent authorities to accept and conduct assessments. As of the date of this prospectus, we have received notice from the CAC in relation to our listing on Nasdaq, and we have not been required to obtain, or been denied, any other permission from the PRC authorities to list on U.S. stock exchanges.

If EPWK WFOE, EPWK VIE or their ownership structure or the VIE Agreements are determined to be in violation of any existing or future PRC laws, rules or regulations, or EPWK WFOE or EPWK VIE fails to obtain or maintain any of the required governmental permits or approvals, the relevant PRC regulatory authorities would have broad discretion in dealing with such violations, including:

Any of these penalties above will have a significant and negative impact on our ability to conduct business and the value of our Class A Ordinary Shares. In addition, it is not clear how the Chinese government's actions will affect us and our ability to consolidate VIE financial results in the consolidated financial statements if the Chinese government authorities find that our legal structure and contractual arrangements violate Chinese laws and regulations. If the PRC government determines that the contractual arrangements constituting part of the VIE structure do not comply with PRC regulations, or if the above mentioned laws and regulations change or are interpreted differently in the future, and we cannot restructure our ownership structure and operations in a satisfactory manner to the Chinese government, we may lose the right to assert contractual control over VIE activities or the right to be the primary beneficiary, for accounting purposes only, to receive economic benefits and residual returns from VIE, we will not be able to conduct all or substantially all of our operations or consolidate the VIE’s assets and liabilities to our own assets and liabilities, our contractual arrangements will become invalid or unenforceable. Any of these results, or any other significant penalties that may be imposed on us in this regard, will have a significant negative impact on us and may cause our Class A Ordinary Shares to become worthless.

We may incur substantial difficulties and costs in enforcing any rights we may have under the VIE Agreements in PRC.

As all of the VIE Agreements with EPWK VIE are governed by the PRC laws and provide for the resolution of disputes through arbitration in the PRC, they would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal environment in the PRC is not as developed as in the United States. As a result, uncertainties in the PRC legal system could further limit our ability to enforce these VIE Agreements. Furthermore, these VIE Agreements may not be enforceable in China if PRC government authorities or courts take a view that such VIE Agreements contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event we are unable to enforce these VIE Agreements, we may not be able to exert effective control over EPWK VIE, and our ability to conduct our business may be materially and adversely affected.

The approval of the China Securities Regulatory Commission and other compliance procedures may be required in connection with this offering, and, if required, we cannot predict whether we will be able to obtain such approval. As a result, both you and us face uncertainty about future actions by the PRC government that could significantly affect the operating company’s financial performance and the enforceability of the VIE Agreements.

In the opinion of our PRC counsel based on their understanding of the current PRC laws, regulations and rules, the CSRC’s approval are not required for the listing and trading of our Class A Ordinary Shares on the Nasdaq Capital Market in the context of this offering, given that: (i) the CSRC currently has not issued any definitive rule or interpretation concerning whether offerings like ours in this prospectus are subject to this regulation, (ii) we establish our EPWK WFOE by means of direct investment and acquiring equity interest or assets of an entity other than “PRC domestic company” as defined under the M&A Rules, and (iii) no explicit provision in the M&A Rules clearly classifies VIE Agreements as a type of transaction subject to such Rules.

However, our PRC legal counsel has further advised us that there remains some uncertainty as to how the M&A Rules will be interpreted or implemented in the context of an overseas offering and its opinions summarized above are subject to any new laws, regulations and rules or detailed implementations and interpretations in any form relating to the M&A Rules. We cannot assure you that relevant PRC regulatory agencies, including the CSRC, would reach the same conclusion as our PRC legal counsel does. If it is determined that CSRC approval is required for this offering, we may face sanctions by the CSRC or other PRC regulatory agencies for failure to obtain or delay in obtaining CSRC approval for this offering. These sanctions may include fines and penalties on our operations in China, limitations on our operating privileges in China, delays in or restrictions on the repatriation of the proceeds from this offering into the PRC, restrictions on or prohibition of the payments or remittance of dividends by our subsidiaries in China, or other actions that could have a material and adverse effect on our business, reputation, financial condition, results of operations, prospects, as well as the trading price of the Class A Ordinary Shares. The CSRC or other PRC regulatory agencies may also take actions requiring us, or making it advisable for us, to halt this offering before the settlement and delivery of the Class A Ordinary Shares that we are offering. Consequently, if you engage in market trading or other activities in anticipation of and prior to the settlement and delivery of the Class A Ordinary Shares we are offering, you would be doing so at the risk that the settlement and delivery may not occur. In addition, if the CSRC or other regulatory agencies later promulgate new rules or explanations requiring that we obtain their approvals for this offering, we may be unable to obtain a waiver of such approval requirements.

Recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severe and Lawful Crackdown on Illegal Securities Activities, which was available to the public on July 6, 2021. These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies. These opinions proposed to take effective measures, such as promoting the construction of relevant regulatory systems, to deal with the risks and incidents facing China-based overseas-listed companies and the demand for cybersecurity and data privacy protection. The aforementioned policies and any related implementation rules to be enacted may subject us to additional compliance requirement in the future. Moreover, the Cybersecurity Review Measures require online platform operators possessing personal information of more than one (1) million users to apply for the cybersecurity review for its overseas listing, and the cybersecurity review shall focus on the assessment of the impact or potential impact on the national security of the online platform operators’ data processing activities. In compliance with the Measures, we have submitted a written declaration and other materials required for the cybersecurity review to the CAC. Upon reviewing our materials in accordance with the Measures, the Office of Cybersecurity Review of the CAC, which is responsible for organizing cybersecurity reviews and developing relevant rules and regulations, informed us that we passed the cybersecurity review for this offering. As of the date of this prospectus, we have not been required to obtain, or been denied, any other permission from the PRC authorities to list on U.S. stock exchanges. As these opinions were recently issued, official guidance and interpretation of the opinions remain unclear in several respects at this time. Therefore, we cannot assure you that we will remain fully compliant with all new regulatory requirements of these opinions or any future implementation rules on a timely basis, or at all. We face uncertainty about future actions by the PRC government that could significantly affect the operating company’s financial performance and the enforceability of the VIE Agreements.

PRC laws and regulations governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations may impair our ability to operate profitable.

There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations including, but not limited to, the laws and regulations governing our business and the enforcement and performance of our arrangements with customers in certain circumstances. The laws and regulations are sometimes vague and may be subject to future changes, and their official interpretation and enforcement may involve substantial uncertainty. The effectiveness and interpretation of newly enacted laws or regulations, including amendments to existing laws and regulations, may be delayed, and our business may be affected if we rely on laws and regulations which are subsequently adopted or interpreted in a manner different from our understanding of these laws and regulations. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our business.

On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws. Since this document is relatively new, uncertainties still exist in relation to how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on companies like us.

Regulations relating to offshore investment activities by PRC residents may limit our ability to acquire PRC companies and could adversely affect our business.

In July 2014, State Administration of Foreign Exchange, or SAFE, promulgated the Circular on Issues Concerning Foreign Exchange Administration Over the Overseas Investment and Financing and Roundtrip Investment by Domestic Residents Via Special Purpose Vehicles, or Circular 37, which replaced Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Corporate Financing and Roundtrip Investment through Offshore Special Purpose Vehicles, or Circular 75. Circular 37 requires PRC residents to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, referred to in Circular 37 as a “special purpose vehicle” for the purpose of holding domestic or offshore assets or interests. Circular 37 further requires amendment to a PRC resident’s registration in the event of any significant changes with respect to the special purpose vehicle, such as an increase or decrease in the capital contributed by PRC individuals, share transfer or exchange, merger, division or other material event. Under these regulations, PRC residents’ failure to comply with specified registration procedures may result in restrictions being imposed on the foreign exchange activities of the relevant PRC entity, including the payment of dividends and other distributions to its offshore parent, as well as restrictions on capital inflows from the offshore entity to the PRC entity, including restrictions on its ability to contribute additional capital to its PRC subsidiaries. Further, failure to comply with the SAFE registration requirements could result in penalties under PRC law for evasion of foreign exchange regulations. In February 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or Notice 13, effective in June 2015. Under Notice 13, qualified banks will examine and handle foreign exchange registration for overseas direct investment, including the initial foreign exchange registration and amendment registration, under the supervision of SAFE.

All our beneficial owners who are PRC residents, including Mr. Guohua Huang and 17 others , have completed the Circular 37 registration with the qualified banks as required by the regulations. Though, we cannot assure you that our ultimate shareholders who are PRC residents will in the future provide sufficient supporting documents required by the SAFE or complete the required registration with the qualified banks in a timely manner, or at all. Any failure by any of our shareholders who is a PRC resident, or is controlled by a PRC resident, to comply with relevant requirements under these regulations could subject us to fines or sanctions imposed by the PRC government, including restrictions on our overseas or cross-border investment activities, restrictions on EPWK WFOE’s ability to pay dividends or make distributions to us and on our ability to increase our investment in the EPWK WFOE.

Although we believe that our agreements relating to our structure are in compliance with current PRC regulations, we cannot assure you that the PRC government would agree that these VIE Agreements comply with PRC licensing, registration or other regulatory requirements, with existing policies or with requirements or policies that may be adopted in the future.

Uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.

On March 15, 2019, the National People’s Congress approved the Foreign Investment Law, which has come into effect on January 1, 2020 and replaced the trio of existing laws regulating foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations. The Foreign Investment Law embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments. However, since it is relatively new, uncertainties still exist in relation to its interpretation and implementation. For instance, under the Foreign Investment Law, “foreign investment’’ refers to the investment activities directly or indirectly conducted by foreign individuals, enterprises or other entities in China. Though it does not explicitly classify VIE Agreements as a form of foreign investment, there is no assurance that operation conducted by foreign investors or foreign-invested enterprises via contractual arrangement would not be interpreted as a type of indirect foreign investment activities under the definition in the future. In addition, the definition contains a catch-all provision which includes investments made by foreign investors through means stipulated in laws or administrative regulations or other methods prescribed by the State Council. Therefore, it still leaves leeway for future laws, administrative regulations or provisions promulgated by the Stale Council to provide for VIE Agreements as a form of foreign investment. In any of these cases, it will be uncertain whether the VIE Agreements will be deemed to be in violation of the market access requirements for foreign investment under the PRC laws and regulations. Furthermore, if future laws, administrative regulations or provisions prescribed by the State Council mandate further actions to be taken by companies with respect to existing VIE Agreements, we may face substantial uncertainties as to whether we can complete such actions in a timely manner, or at all. Failure to take timely and appropriate measures to cope with any of these or similar regulatory compliance challenges could materially and adversely affect our current corporate structure, corporate governance and business operations.

PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans to our PRC subsidiaries and VIE or making additional capital contributions to our wholly foreign-owned subsidiaries in China, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

We are an offshore holding company conducting our operations in China through our PRC subsidiaries and EPWK VIE. We may make loans to our PRC subsidiaries and VIE subject to the approval from governmental authorities and limitation of amount, or we may make additional capital contributions to our wholly foreign-owned subsidiaries in China. Furthermore, loans by us to our PRC subsidiaries to finance its activities cannot exceed the difference between their respective total project investment amount and registered capital or twice times of their net worth, and capital contributions to our PRC subsidiary are subject to the requirement of making necessary filings in the Foreign Investment Comprehensive Management Information System and registration with other governmental authorities in China.

Any loans to our wholly foreign-owned subsidiaries in China, which are treated as foreign-invested enterprises under PRC law, are subject to PRC regulations and foreign exchange loan registrations. For example, loans by us to our wholly foreign-owned subsidiaries in China to finance their activities cannot exceed statutory limits, i.e. the difference between its total amount of investment and its registered capital, or certain amount calculated based on elements including capital or net assets and the cross-border financing leverage ratio or the Macro-prudential Management Mode, under relevant PRC laws and the loans must be registered with the local counterpart of the State Administration of Foreign Exchange, or SAFE, or filed with SAFE in its information system. We may also provide loans to EPWK VIE or other domestic PRC entities under the Macro-prudential Management Mode. According to the Circular of the PBOC and the State Administration of Foreign Exchange on Adjusting the Macro-prudent Adjustment Parameter for Cross-border Financing issued on January 7, 2021, the limit for the total amount of foreign debt under the macro-prudential Management Mode is decreased to two times from 2.5 times of their respective net assets. Moreover, any medium or long-term loan to be provided by us to the VIE or other domestic PRC entities must also be registered with the NDRC.

We may also decide to finance our wholly foreign-owned subsidiaries in China by means of capital contributions. These capital contributions shall go through record-filing procedures from competent administration for market regulation. SAFE issued the Circular on the Management Concerning the Reform of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, or SAFE Circular 19, which took effect on June 1, 2015. SAFE Circular 19 allows for the use of RMB converted from the foreign currency-denominated capital for equity investments in the PRC provided that such usage shall fall into the scope of business of the foreign-invested enterprise, which will be regarded as the reinvestment of foreign-invested enterprise. Although SAFE Circular 19 allows RMB capital converted from foreign currency-denominated registered capital of a foreign-invested enterprise to be used for equity investments within the PRC, it also reiterates the principle that RMB converted from the foreign currency-denominated capital of a foreign-invested company may not be directly or indirectly used for purposes beyond its business scope. Thus, it is unclear whether the SAFE will permit such capital to be used for equity investments in the PRC in actual practice. The SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital Account, or SAFE Circular 16, effective on June 9, 2016, which reiterates some of the rules set forth in SAFE Circular 19, but changes the prohibition against using RMB capital converted from foreign currency-denominated registered capital of a foreign-invested company to issue RMB entrusted loans to a prohibition against using such capital to grant loans to non-associated enterprises. Violations of SAFE Circular 19 and SAFE Circular 16 could result in administrative penalties. In addition, SAFE promulgated the Circular Regarding Further Promotion of the Facilitation of Cross-Border Trade and Investment on October 23, 2019, or SAFE Circular 28, pursuant to which all foreign-invested enterprises can make equity investments in the PRC with their capital funds in accordance with the law. As SAFE Circular 28 is new and the relevant government authorities have broad discretion in interpreting the regulation, it is unclear whether SAFE will permit such capital funds to be used for equity investments in the PRC in actual practice.

Due to the restrictions imposed on loans in foreign currencies extended to any PRC domestic companies, we are not likely to make such loans to the subsidiaries of our wholly foreign-owned subsidiaries in China and EPWK VIE, each a PRC domestic company. Meanwhile, we are not likely to finance the activities of EPWK VIE by means of capital contributions given the restrictions on foreign investment in the businesses that are currently conducted by EPWK VIE. In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or record-filings on a timely basis, if at all, with respect to future loans to our PRC subsidiaries or any Consolidated Affiliated Entity or future capital contributions by us to our wholly foreign-owned subsidiaries in China.

As a result, uncertainties exist as to our ability to provide prompt financial support to our PRC subsidiaries or EPWK VIE when needed. If we fail to complete such registrations or record-filings, our ability to use foreign currency, including the proceeds we received from our initial public offering, and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

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

We are a holding company, and we may rely on dividends and other distributions on equity paid by our PRC subsidiaries like EPWK WFOE for our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders and service any debt we may incur. If these subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to us. In addition, the PRC tax authorities may require our WFOE or any other relevant PRC subsidiary to adjust its taxable income under the contractual arrangements it currently has in place with EPWK VIE in a manner that would materially and adversely affect its ability to pay dividends and other distributions to us.

Under PRC laws and regulations, our wholly foreign-owned subsidiaries in China may pay dividends only out of their respective accumulated profits as determined in accordance with PRC accounting standards and regulations. In addition, a PRC enterprise is required to set aside at least 10% of its accumulated after-tax profits each year, if any, to fund certain statutory reserve fund, until the aggregate amount of such fund reaches 50% of its registered capital. Our PRC subsidiary may also allocate a portion of its after-tax profits based on PRC accounting standards to employee welfare and bonus funds at their discretion. These reserves are not distributable as cash dividends. In response to the persistent capital outflow in China and the RMB’s depreciation against the U.S. dollar in the fourth quarter of 2016, the People’s Bank of China and SAFE promulgated a series of capital control measures in early 2017, including stricter vetting procedures for domestic companies to remit foreign currency for overseas investments, dividends payments and shareholder loan repayments. The PRC government may continue to strengthen its capital controls, and more restrictions and substantial vetting process may be put forward by SAFE for cross-border transactions falling under both the current account and the capital account. Any limitation on the ability of our PRC subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business. See also “Risk Factors – Risks Relating to Doing Business in the PRC – Under the PRC Enterprise Income Tax Law, or the EIT Law, we may be classified as a “resident enterprise” of China, which could result in unfavorable tax consequences to us and our non-PRC shareholders.”

A recent joint statement by the SEC and the Public Company Accounting Oversight Board (United States), or the “PCAOB,” proposed rule changes submitted by Nasdaq, and the newly enacted “Holding Foreign Companies Accountable Act” all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our offering.

On April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associated with investing in companies based in or have substantial operations in emerging markets including China. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud in emerging markets.

On May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating in “Restrictive Market”, (ii) adopt a new requirement relating to the qualification of management or board of director for Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company’s auditors.

On May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act requiring a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the PCAOB is unable to inspect the Company’s auditors for three consecutive years, the issuer’s securities are prohibited to trade on a U.S. stock exchange. On December 2, 2020, the U.S. House of Representatives approved the Holding Foreign Companies Accountable Act. On December 18, 2020, the Holding Foreign Companies Accountable Act was signed into law.

On March 24, 2021, the SEC announced that it had adopted interim final amendments to implement congressionally mandated submission and disclosure requirements of the Act. The interim final amendments will apply to registrants that the SEC identifies as having filed an annual report on Forms 10-K, 20-F, 40-F or N-CSR with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB has determined it is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction. The SEC will implement a process for identifying such a registrant and any such identified registrant will be required to submit documentation to the SEC establishing that it is not owned or controlled by a governmental entity in that foreign jurisdiction, and will also require disclosure in the registrant’s annual report regarding the audit arrangements of, and governmental influence on, such a registrant.

On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted, would amend the HFCAA and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time period before our securities may be prohibited from trading or delisted if our auditor is unable to meet the PCAOB inspection requirement.

On September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCAA, whether the PCAOB is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.

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

On December 16, 2021, SEC announced that the PCAOB designated China and Hong Kong as the jurisdictions where the PCAOB is not allowed to conduct full and complete audit inspections as mandated under the HFCAA. The Company’s auditor, WWC, Professional Corporation, is based in San Mateo, California, and therefore is not subject to this mandate by the PCAOB.

On February 4, 2022, the U.S. House of Representatives passed the America Creating Opportunities for Manufacturing Pre-Eminence in Technology and Economic Strength (COMPETES) Act of 2022 (the “America COMPETES Act”). On March 28, 2022, the U.S. Senate passed its version of the America COMPETES Act. If the America COMPETES Act is enacted into law, it would amend the HFCAA and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three.

On August 26, 2022, the SEC issued a statement announcing that the PCAOB signed a Statement of Protocol with the CSRC and the Ministry of Finance of the People’s Republic of China governing inspections and investigations of audit firms based in China and Hong Kong, jointly agreeing on the need for a framework. The Protocol remains unpublished and is subject to further explanation and implementation. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and the unfettered ability to transfer information to the SEC.

On December 15, 2022, the PCAOB announced in the 2022 Determination its determination that the PCAOB was able to secure complete access to inspect and investigate accounting firms headquartered in mainland China and Hong Kong, and the PCAOB Board voted to vacate previous determinations to the contrary. According to the 2022 Determination, this determination was reached after the PCAOB had thoroughly tested compliance with every aspect of the Protocol necessary to determine complete access, including on-site inspections and investigations in a manner fully consistent with the PCAOB’s methodology and approach in the U.S. and globally. According to the 2022 Determination, the PRC Authorities had fully assisted and cooperated with the PCAOB in carrying out the inspections and investigations according to the Protocol, and have agreed to continue to assist the PCAOB’s investigations and inspections in the future. Should the PCAOB again encounter impediments to inspections and investigations in mainland China or Hong Kong as a result of positions taken by any authority in either jurisdiction, including by the CSRC or the MOF, the PCAOB will make determinations under the HFCAA as and when appropriate.

On December 29, 2022, a legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”), was signed into law by President Biden. The Consolidated Appropriations Act contained, among other things, an identical provision to HFCAA, which reduces the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two.

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

The lack of access to the PCAOB inspection in China prevents the PCAOB from fully evaluating audits and quality control procedures of the auditors based in China. As a result, the investors may be deprived of the benefits of such PCAOB inspections. The inability of the PCAOB to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of these accounting firms’ audit procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections, which could cause existing and potential investors in our stock to lose confidence in our audit procedures and reported financial information and the quality of our financial statements.

Our auditor, WWC, Professional Corporation, the independent registered public accounting firm that issues the audit report included elsewhere in this prospectus, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess our auditor’s compliance with the applicable professional standards. Our auditor is headquartered in San Mateo, California, and is subject to inspection by the PCAOB on a regular basis with the last inspection in November 2021. Notwithstanding the foregoing, because we have substantial operations within the PRC through the PRC operating entities, if the PCAOB is not able to fully conduct inspections of our auditor’s work papers in China, you may be deprived of the benefits of such inspection which could result in limitation or restriction to our access to the U.S. capital markets and trading of our securities may be prohibited under the HFCAA.

However, the recent developments would add uncertainties to our offering and we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements. It remains unclear what the SEC’s implementation process related to the March 2021 interim final amendments will entail or what further actions the SEC, the PCAOB or Nasdaq will take to address these issues and what impact those actions will have on U.S. companies that have significant operations in the PRC and have securities listed on a U.S. stock exchange. In addition, the March 2021 interim final amendments and any additional actions, proceedings, or new rules resulting from these efforts to increase U.S. regulatory access to audit information could create some uncertainty for investors, the market price of our ordinary shares could be adversely affected, and we could be delisted if we and our auditor are unable to meet the PCAOB inspection requirement and the uncertainty surrounding the possible new rules and regulations regarding the implementation of the HFCAA or being required to engage a new audit firm, which would require significant expense and management time.

Nasdaq may apply additional and more stringent criteria for our initial and continued listing because we plan to have a small public offering and our insiders will hold a large portion of our listed securities.

Nasdaq Listing Rule 5101 provides Nasdaq with broad discretionary authority over the initial and continued listing of securities in Nasdaq and Nasdaq may use such discretion to deny initial listing, apply additional or more stringent criteria for the initial or continued listing of particular securities, or suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes initial or continued listing of the securities on Nasdaq inadvisable or unwarranted in the opinion of Nasdaq, even though the securities meet all enumerated criteria for initial or continued listing on Nasdaq. In addition, Nasdaq has used its discretion to deny initial or continued listing or to apply additional and more stringent criteria in the instances, including but not limited to: (i) where the company engaged an auditor that has not been subject to an inspection by PCAOB, an auditor that PCAOB cannot inspect, or an auditor that has not demonstrated sufficient resources, geographic reach, or experience to adequately perform the company’s audit; (ii) where the company planned a small public offering, which would result in insiders holding a large portion of the company’s listed securities. Nasdaq was concerned that the offering size was insufficient to establish the company’s initial valuation, and there would not be sufficient liquidity to support a public market for the company; and (iii) where the company did not demonstrate sufficient nexus to the U.S. capital market, including having no U.S. shareholders, operations, or members of the board of directors or management. Our initial public offering will be relatively small and the insiders of our Company will hold a large portion of the company’s listed securities following the consummation of the offering. Therefore, we may be subject to the additional and more stringent criteria of Nasdaq for our initial and continued listing, which might cause delay or even denial of our listing application.

It may be difficult for overseas shareholders and/or regulators to conduct investigations or collect evidence within China.

Shareholder claims or regulatory investigation that are common in the United States generally are difficult to pursue as a matter of law or practicality in China. For example, in China, there are significant legal and other obstacles to providing information needed for regulatory investigations or litigation initiated outside China. Although the authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanism. Furthermore, according to Article 177 of the PRC Securities Law, or Article 177, which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC. While detailed interpretation of or implementation rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by you in protecting your interests.

Our principal business operation is conducted in the PRC. In the event that the U.S. regulators carry out investigation on us and there is a need to conduct investigation or collect evidence within the territory of the PRC, the U.S. regulators may not be able to carry out such investigation or evidence collection directly in the PRC under the PRC laws. The U.S. regulators may consider cross-border cooperation with securities regulatory authority of the PRC by way of judicial assistance, diplomatic channels or regulatory cooperation mechanism established with the securities regulatory authority of the PRC.

Because we are a Cayman Islands corporation and all of our business is conducted in the PRC, you may be unable to bring an action against us or our officers and directors or to enforce any judgment you may obtain.

We are a company incorporated under the laws of the Cayman Islands, we conduct substantially all of our operations in China, and substantially all of our assets are located in China. In addition, all our senior executive officers reside within China for a significant portion of the time and are all PRC nationals. As a result, it may be difficult for our shareholders to effect service of process upon us or those persons in the Cayman Islands or in China. In addition, China does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with the Cayman Islands and many other countries and regions. Therefore, recognition and enforcement in China of judgments of a court in any of these non-PRC jurisdictions in relation to any matter not subject to a binding arbitration provision may be difficult or impossible. See “Enforceability of Civil Liabilities.”

Shareholder claims that are common in the United States, including securities law class actions and fraud claims, generally are difficult to pursue as a matter of law or practicality in China. For example, in China, there are significant legal and other obstacles to obtaining information needed for shareholder investigations or litigation outside China or otherwise with respect to foreign entities. Although the local authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such regulatory cooperation with the securities regulatory authorities in the Unities States have not been efficient in the absence of mutual and practical cooperation mechanism. According to Article 177 of the PRC Securities Law which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC.

In addition, our corporate affairs are governed by our amended and restated memorandum and articles of association, the Companies Act or the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a Federal court of the United States.

We have been advised by our Cayman Islands legal counsel, Ogier, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, and or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

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

Uncertainties with respect to the PRC legal system could significantly impact our business operation.

There are substantial uncertainties regarding the interpretation and application of Chinese laws and regulations including but not limited to those governing our business, and the enforcement and performance of our agreements with customers in certain circumstances. The laws and regulations are sometimes vague and subject to change in the future, and the official interpretation and enforcement could be unpredictable with little advance notice. Our business may be affected if we rely on laws and regulations which are subsequently adopted or interpreted in a manner different from our current understanding of these laws and regulations. We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our business.

The Chinese government may intervene or influence our operations at any time, which could result in a material change in our operations and/or the value of our shares.

Our business is regulated by relevant government departments in China, including but not limited to the Administration of Local Taxation. The regulations jointly promulgated and implemented by these government departments cover many aspects of our daily operation. If we are deemed not to comply with these requirements, we may be subject to fines and other administrative penalties from relevant Chinese government departments. If we can’t correct our non-compliance within the time specified by the relevant government departments in China, we may be forced to suspend our business. Therefore, our business, reputation, equity value, financial situation and operating results may be significantly and adversely affected.

Economic conditions in China could impact our business and results of operations in both lines of our business.

The VIE and its subsidiaries’ business and operating results are impacted by Chinese economic conditions, such as a potential general reduction in net disposable income as a result of fiscal measures adopted by Chinese government to address high levels of budgetary indebtedness, which may adversely affect our business, results of operations and financial condition. The most recent global financial crisis and recession resulted in large-scale business failures and tightened credit markets in China, which directly impacts the Chinese IT service market and VAT reporting service industry. Future adverse economic developments in areas such as employment levels, business conditions, interest rates, tax rates, fuel and energy costs and other matters could reduce discretionary spending and cause the industries where we operate to contract.

There may be changes in the regulations of PRC government bodies and agencies relating to crowdsourcing business.

PRC laws, regulations and policies concerning crowdsourcing business are evolving and the PRC government authorities may promulgate new laws, regulations and policies in the future. We cannot assure you that our practices would not be deemed to violate any PRC laws, regulations or policies either now or in the future.

Moreover, developments in the crowdsourcing industry may lead to changes in PRC laws, regulations and policies or in the interpretation and application of existing laws, regulations and policies, which may limit or restrict the crowdsourcing services we offer. Furthermore, we cannot rule out the possibility that the PRC government will institute a new licensing regime covering services we provide in the future. If such a licensing regime were introduced, we cannot assure you that we would be able to obtain any newly required license in a timely manner, or at all, which could materially and adversely affect our business and impede our ability to continue our operations.

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

We conduct all of our operations, and all of our revenue is generated in the PRC. Accordingly, economic, political and legal developments in the PRC will significantly affect our business, financial condition, results of operations and prospects. Policies, regulations, rules, and the enforcement of laws of the PRC government can have significant effects on economic conditions in the PRC and the ability of businesses to operate profitably. Our ability to operate profitably in the PRC may be adversely affected by changes in policies by the PRC government, including changes in laws, regulations or their interpretation, particularly those dealing with the Internet, including censorship and other restriction on material which can be transmitted over the Internet, security, intellectual property, money laundering, taxation and other laws that affect our ability to operate our website.

China’s economic, political and social conditions, laws and regulations, as well as possible interventions and influences of any government policies and actions are uncertain and could have a material adverse effect on our business and the value of our Class A Ordinary Shares.

China’s economy differs from the economies of most developed countries in many respects, including the amount of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. While the PRC economy has experienced significant growth in the past two to three decades, growth has been uneven, both geographically and among various sectors of the economy. Although China’s economy has been transitioning from a planned economy to a more market oriented economy since the late 1970s, the PRC government continues to play a significant role in regulating industry development by imposing industrial policies. The PRC government also exercises significant control over China’s economic growth through allocating resources, controlling the incurrence and payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies. Changes in any of these policies, laws and regulations could adversely affect the economy in China and could have a material adverse effect on our business.

The PRC government has implemented various measures to encourage foreign investment and sustainable economic growth and to guide the allocation of financial and other resources. However, we cannot assure you that the PRC government will not repeal or alter these measures or introduce new measures that will have a negative effect on us, or more specifically, we cannot assure you that the PRC government will not initiate possible governmental actions or scrutiny to us, which could substantially affect our operation and the value of our Class A Ordinary Shares may depreciate quickly. China’s economic, political and social conditions, as well as interventions and influences of any government policies, laws and regulations are uncertain and could have a material adverse effect on our business.

Because our business is dependent upon government policies that encourage a market-based economy, change in the political or economic climate in the PRC may impair our ability to operate profitably, if at all.

Although the PRC government has been pursuing a number of economic reform policies for more than two decades, the PRC government continues to exercise significant control over economic growth in the PRC. Because of the nature of our business, we are dependent upon the PRC government pursuing policies that encourage private ownership of businesses. We cannot assure you that the PRC government will pursue policies favoring a market-oriented economy or that existing policies will not be significantly altered, especially in the event of a change in leadership, social or political disruption, or other circumstances affecting political, economic and social life in the PRC.

Because our business is conducted in RMB and the price of our Class A Ordinary Shares is quoted in United States dollars, changes in currency conversion rates may affect the value of your investments.

Our business is conducted in the PRC, our books and records are maintained in RMB, which is the currency of the PRC, and the financial statements that we file with the SEC and provide to our shareholders are presented in United States dollars. Changes in the exchange rate between the RMB and dollar affect the value of our assets and the results of our operations in United States dollars. The value of the RMB against the United States dollar and other currencies may fluctuate and is affected by, among other things, changes in the PRC’s political and economic conditions and perceived changes in the economy of the PRC and the United States. Any significant revaluation of the RMB may materially and adversely affect our cash flows, revenue and financial condition. Further, our Class A Ordinary Shares offered by this prospectus are offered in United States dollars, we will need to convert the net proceeds we receive into RMB in order to use the funds for our business. Changes in the conversion rate between the United States dollar and the RMB will affect that amount of proceeds we will have available for our business.

Under the PRC Enterprise Income Tax Law, or the EIT Law, we may be classified as a “resident enterprise” of China, which could result in unfavorable tax consequences to us and our non-PRC shareholders.

The EIT Law and its implementing rules provide that enterprises established outside of China whose “de facto management bodies” are located in China are considered “resident enterprises” under PRC tax laws. The implementing rules promulgated under the EIT Law define the term “de facto management bodies” as a management body which substantially manages, or has control over the business, personnel, finance and assets of an enterprise. In April 2009, the State Administration of Taxation, or SAT, issued a circular, known as Circular 82, which provides certain specific criteria for determining whether the “de facto management bodies” of a PRC-controlled enterprise that is incorporated offshore is located in China. However, there are no further detailed rules or precedents governing the procedures and specific criteria for determining “de facto management body.” Although our board of directors and management are located in the PRC, it is unclear if the PRC tax authorities would determine that we should be classified as a PRC “resident enterprise.”

If we are deemed as a PRC “resident enterprise,” we will be subject to PRC enterprise income tax on our worldwide income at a uniform tax rate of 25%, although dividends distributed to us from our existing PRC subsidiary and any other PRC subsidiaries which we may establish from time to time could be exempt from the PRC dividend withholding tax due to our PRC “resident recipient” status. This could have a material and adverse effect on our overall effective tax rate, our income tax expenses and our net income. Furthermore, dividends, if any, paid to our shareholders may be decreased as a result of the decrease in distributable profits. In addition, if we were considered a PRC “resident enterprise”, any dividends we pay to our non-PRC investors, and the gains realized from the transfer of our Class A Ordinary Shares may be considered income derived from sources within the PRC and be subject to PRC tax, at a rate of 10% in the case of non-PRC enterprises or 20% in the case of non-PRC individuals (in each case, subject to the provisions of any applicable tax treaty). It is unclear whether holders of our Class A Ordinary Shares would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. This could have a material and adverse effect on the value of your investment in us and the price of our Class A Ordinary Shares.

There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiary, and dividends payable by our PRC subsidiary to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.

Under the PRC EIT Law and its implementation rules, the profits of a foreign invested enterprise generated through operations, which are distributed to its immediate holding company outside the PRC, will be subject to a withholding tax rate of 10%. Pursuant to a special arrangement between Hong Kong and the PRC, such rate may be reduced to 5% if a Hong Kong resident enterprise owns more than 25% of the equity interest in the PRC company. Our PRC subsidiary is wholly-owned by our Hong Kong subsidiary. Moreover, under the Notice of the State administration of Taxation on Issues regarding the Administration of the Dividend Provision in Tax Treaties promulgated on February 20, 2009, the taxpayer needs to satisfy certain conditions to enjoy the benefits under a tax treaty. These conditions include: (1) the taxpayer must be the beneficial owner of the relevant dividends, and (2) the corporate shareholder to receive dividends from the PRC subsidiary must have continuously met the direct ownership thresholds during the 12 consecutive months preceding the receipt of the dividends. Further, the State Administration of Taxation promulgated the Notice on How to Understand and Recognize the “Beneficial Owner” in Tax Treaties on October 27, 2009, which limits the “beneficial owner” to individuals, projects or other organizations normally engaged in substantive operations, and sets forth certain detailed factors in determining the “beneficial owner” status. In current practice, a Hong Kong enterprise must obtain a tax resident certificate from the relevant Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority. As of the date of this prospectus, we have not commenced the application process for a Hong Kong tax resident certificate from the relevant Hong Kong tax authority, and there is no assurance that we will be granted such a Hong Kong tax resident certificate.

Even after we obtain the Hong Kong tax resident certificate, we are required by applicable tax laws and regulations to file required forms and materials with relevant PRC tax authorities to prove that we can enjoy 5% lower PRC withholding tax rate. EPWK HK intends to obtain the required materials and file with the relevant tax authorities when it plans to declare and pay dividends, but there is no assurance that the PRC tax authorities will approve the 5% withholding tax rate on dividends received from EPWK HK.

The disclosures in our reports and other filings with the SEC and our other public pronouncements are not subject to the scrutiny of any regulatory bodies in the PRC.

We are regulated by the SEC and our reports and other filings with the SEC are subject to SEC review in accordance with the rules and regulations promulgated by the SEC under the Securities Act and the Exchange Act. Our SEC reports and other disclosure and public pronouncements are not subject to the review or scrutiny of any PRC regulatory authority. For example, the disclosure in our SEC reports and other filings are not subject to the review by China Securities Regulatory Commission, a PRC regulator that is responsible for oversight of the capital markets in China. Accordingly, you should review our SEC reports, filings and our other public pronouncements with the understanding that no local regulator has done any review of us, our SEC reports, other filings or any of our other public pronouncements.

We operate in an emerging and evolving market. If our market does not grow as we expect, or if we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, and changing customer needs, requirements or preferences, our products and solutions may become less competitive.

There are uncertainties over the size and rate at which the IT service market will grow, as well as whether our solutions and products will be widely adopted. Moreover, our industry is subject to rapid technological change, evolving industry standards, changing regulations, as well as changing customer needs, requirements and preferences. The success of our business will depend, in part, on our ability to adapt and respond effectively to these changes on a timely basis. If we are unable to develop new solutions and products that satisfy our customers and provide enhancements and new features for our existing products that keep pace with rapid technological and industry change, our business, results of operations and financial condition could be adversely affected. If new technologies emerge that are able to deliver competitive products and services at lower prices, more efficiently, more conveniently or more securely, such technologies could adversely impact our ability to compete effectively.

Our platform must also integrate with a variety of network, hardware, software platforms and technologies, and we need to continuously modify and enhance our products and platform to adapt to changes and innovation. For example, if customers adopt new software platforms or infrastructure, we may be required to develop new versions of our products to be compatible with those new software platforms or infrastructure. This development effort may require significant resources, which would adversely affect our business, results of operations and financial condition. Any failure of our products and platform to operate effectively with evolving or new software platforms and technologies could reduce the demand for our products. If we are unable to respond to these changes in a cost-effective manner, our products may become less marketable and less competitive or obsolete, and our business, results of operations and financial condition could be adversely affected.

In light of recent events indicating greater oversight by the Cyberspace Administration of China, or CAC, over data security, particularly for companies seeking to list on a foreign exchange, we are subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, our listing on Nasdaq, financial condition, results of operations, and the offering.

We are subject to various risks and costs associated with the collection, use, sharing, retention, security, and transfer of confidential and private information, such as personal information and other data. This data is wide-ranging and relates to our investors, employees, contractors and other counterparties and third parties. Our compliance obligations include those relating to the Data Protection Act (As Revised) of the Cayman Islands and the relevant PRC laws in this regard. These PRC laws apply not only to third-party transactions, but also to transfers of information between us, our EPWK WFOE, the VIE and its subsidiaries, and among us, our EPWK WFOE, the VIE and its subsidiaries, and other parties with which we have commercial relations. These laws continue to develop, and the PRC government may adopt other rules and restrictions in the future. Non-compliance could result in penalties or other significant legal liabilities.

Pursuant to the PRC Cybersecurity Law, which was promulgated by the Standing Committee of the National People’s Congress on November 7, 2016 and took effect on June 1, 2017, personal information and important data collected and generated by a critical information infrastructure operator in the course of its operations in China must be stored in China, and if a critical information infrastructure operator purchases internet products and services that affects or may affect national security, it should be subject to cybersecurity review by the CAC. However, there are uncertainties with respect to how the PRC Cybersecurity Law will be implemented and interpreted in practice. On December 28, 2021, the CAC and other relevant PRC governmental authorities jointly promulgated the Cybersecurity Review Measures which took effect on February 15, 2022 and replaces the original Cybersecurity Review Measures promulgated on April 13, 2020. Pursuant to the Cybersecurity Review Measures, if critical information infrastructure operators purchase network products and services, or network platform operators conduct data processing activities that affect or may affect national security, they will be subject to cybersecurity review. A network platform operator holding more than one million users/users’ individual information also shall be subject to cybersecurity review before listing abroad. The cybersecurity review will evaluate, among others, the risk of critical information infrastructure, core data, important data, or a large amount of personal information being influenced, controlled or maliciously used by foreign governments and risk of network data security after going public overseas. In compliance with the Measures, we have submitted a written declaration and other materials required for the cybersecurity review to the CAC. Upon reviewing our materials in accordance with the Measures, the Office of Cybersecurity Review of the CAC, which is responsible for organizing cybersecurity reviews and developing relevant rules and regulations, informed us that we passed the cybersecurity review for this offering.

In addition, the PRC Data Security Law, which was promulgated by the Standing Committee of the National People’s Congress on June 10, 2021 and will take effect on September 1, 2021, requires data collection to be conducted in a legitimate and proper manner, and stipulates that, for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical protection system for data security. As the Data Security Law was recently promulgated and has not yet taken effect, we may be required to make further adjustments to our business practices to comply with this law. After the Data Security Law takes effect, if our data processing activities were found to be not in compliance with this law, we could be ordered to make corrections, and under certain serious circumstances, such as severe data divulgence, we could be subject to penalties, including the revocation of our business licenses or other permits. Furthermore, the recently issued Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law require (i) speeding up the revision of the provisions on strengthening the confidentiality and archives management relating to overseas issuance and listing of securities and (ii) improving the laws and regulations relating to data security, cross-border data flow, and management of confidential information. As there remain uncertainties regarding the further interpretation and implementation of those laws and regulations, we cannot assure you that we will be compliant such new regulations in all respects, and we may be ordered to rectify and terminate any actions that are deemed illegal by the regulatory authorities and become subject to fines and other sanctions. As a result, we may be required to suspend our relevant businesses, shut down our website, take down our operating applications, or face other penalties, which may materially and adversely affect our business, financial condition, and results of operations.

While we take measures to comply with all applicable data privacy and protection laws and regulations, we cannot guarantee the effectiveness of the measures undertaken by us and our business partners. However, compliance with any additional laws could be expensive, and may place restrictions on our business operations and the manner in which we interact with our users. In addition, any failure to comply with applicable cybersecurity, privacy, and data protection laws and regulations could result in proceedings against us by government authorities or others, including notification for rectification, confiscation of illegal earnings, fines, or other penalties and legal liabilities against us, which could materially and adversely affect our business, financial condition, results of operations and the value of our Class A Ordinary Shares. In addition, any negative publicity on our website or platform’s safety or privacy protection mechanism and policy could harm our public image and reputation and materially and adversely affect our business, financial condition, and results of operations.

We are subject to anti-corruption, anti-bribery, and similar laws, and noncompliance with such laws can subject us to criminal penalties or significant fines and harm our business and reputation.

We are subject to the U.S. Foreign Corrupt Practices Act of 1977, and other anti-corruption, anti-bribery, anti-money laundering, and similar laws in China and the United States. Anti-corruption and anti-bribery laws, which have been enforced aggressively and are interpreted broadly, prohibit companies and their employees and agents from promising, authorizing, making, or offering improper payments or other benefits to government officials and others in the public sector. We leverage our business partners, including channel partners, to sell our products and solutions and host many of our facilities for our network. We may also rely on our business partners to conduct our business abroad. We and our business partners may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities and we may be held liable for the corrupt or other illegal activities of our business partners and intermediaries, our employees, representatives, contractors, channel partners and agents, even if we do not explicitly authorize such activities.

We cannot assure you that all of our employees and agents have complied with, or in the future will comply with, our policies and applicable law. The investigation of possible violations of these laws, including internal investigations and compliance reviews that we may conduct from time to time, could have a material adverse effect on our business. Noncompliance with these laws could subject us to investigations, severe criminal or civil sanctions, settlements, prosecution, loss of export privileges, suspension or debarment from Chinese government contracts and other contracts, other enforcement actions, the appointment of a monitor, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, whistleblower complaints, adverse media coverage and other consequences. Other internal and government investigations, regulatory proceedings, or litigation, including private litigation filed by our shareholders, may also follow as a consequence. Any investigations, actions, or sanctions could materially harm our reputation, business, results of operations, and financial condition. Further, the promulgation of new laws, rules or regulations or new interpretations of current laws, rules or regulations could impact the way we do business in other countries, including requiring us to change certain aspects of our business to ensure compliance, which could reduce revenues, increase costs, or subject us to additional liabilities.

Failure to comply with laws and regulations applicable to our business in China could subject us to fines and penalties and could also cause us to lose customers or otherwise harm our business.

Our business is subject to regulation by various governmental agencies in China, including agencies responsible for monitoring and enforcing compliance with various legal obligations, such as value-added telecommunication laws and regulations, privacy and data protection-related laws and regulations, intellectual property laws, employment and labor laws, workplace safety, environmental laws, consumer protection laws, governmental trade laws, import and export controls, anti-corruption and anti-bribery laws, and tax laws and regulations. In certain jurisdictions, these regulatory requirements may be more stringent than in China. These laws and regulations impose added costs on our business. Noncompliance with applicable regulations or requirements could subject us to:

If any governmental sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, results of operations, and financial condition could be adversely affected. In addition, responding to any action will likely result in a significant diversion of our management’s attention and resources and an increase in professional fees. Enforcement actions and sanctions could materially harm our business, results of operations, and financial condition.

Additionally, companies in the technology industry have recently experienced increased regulatory scrutiny. Any reviews by regulatory agencies or legislatures may result in substantial regulatory fines, changes to our business practices, and other penalties, which could negatively affect our business and results of operations. Changes in social, political, and regulatory conditions or in laws and policies governing a wide range of topics may cause us to change our business practices. Further, our expansion into a variety of new fields also could raise a number of new regulatory issues. These factors could negatively affect our business and results of operations in material ways.

Moreover, we are exposed to the risk of misconduct, errors and failure to functions by our management, employees and parties that we collaborate with, who may from time to time be subject to litigation and regulatory investigations and proceedings or otherwise face potential liability and penalties in relation to noncompliance with applicable laws and regulations, which could harm our reputation and business.

We face exposure to foreign currency exchange rate fluctuations, and such fluctuations could adversely affect our business, results of operations and financial condition.

The conversion of Renminbi into foreign currencies, including the U.S. dollar, is based on rates set by the People’s Bank of China. The Renminbi has fluctuated against the U.S. dollar and other currencies, at times significantly and unpredictably. The value of Renminbi against the U.S. dollar and other currencies is affected by changes in China’s political and economic conditions and by China’s foreign exchange policies, among other things. We cannot assure you that Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar and other currencies in the future. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between Renminbi and U.S. dollar in the future.

Significant revaluation of the Renminbi may have a material and adverse effect on your investment. For example, to the extent that we need to convert U.S. dollars we receive from this offering into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amount we would receive from the conversion. Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our Class A Ordinary Shares or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount available to us.

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

Substantially all of our revenues and costs are denominated in Renminbi. We are a holding company and we rely on dividends paid by our operating subsidiaries in China for our cash needs. Any significant revaluation of Renminbi may materially and adversely affect our results of operations and financial position reported in Renminbi when translated into U.S. dollars. To the extent that we need to convert U.S. dollars we receive from this offering into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amount we would receive. Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our Class A Ordinary Shares or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount.

Increases in labor costs in the PRC may adversely affect our business and results of operations.

China’s economy has experienced increases in labor costs in recent years. China’s overall economy and the average wage in China are expected to continue to grow. The average wage level for our employees has also increased in recent years. We expect that our staff costs, including wages and employee benefits, will continue to increase. Unless we are able to pass on these increased labor costs to our customers by increasing prices for our products or services, our profitability and results of operations may be materially and adversely affected.

In addition, we have been subject to stricter regulatory requirements in terms of entering into labor contracts with our employees and paying various statutory employee benefits, including housing, pension, medical insurance and unemployment insurance programs to designated government agencies for the benefit of our employees. Compared with its predecessors, the current Labor Contract Law of the PRC imposes stricter requirements on employers in terms of signing labor contracts, minimum wages, paying remuneration, determining the term of employees’ probation and unilaterally terminating labor contracts, further increasing our labor-related costs such as by limiting our ability to terminate some of our employees or otherwise change our employment or labor practices in a cost-effective manner. In addition, as the interpretation and implementation of labor-related laws and regulations are still developing, we cannot assure you that our employment practices have been or will at all times be deemed in compliance with the labor-related laws and regulations in China. If we are subject to severe penalties in connection with labor disputes or government investigations, our business, financial condition and results of operations will be adversely affected.

The Chinese government exerts substantial influence over the manner in which we must conduct our business and may intervene or influence our operations at any time, which actions could impact our operations materially and adversely, and significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our Class A Ordinary Shares to significantly decline or be worthless.

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

Our business is subject to various government and regulatory interference. We could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions. The Company may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. Our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to our business or industry, which could result in further material changes in our operations and could adversely impact the value of our Class A Ordinary Shares.

Given recent statements by the Chinese government indicating an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers, any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

Recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council of the PRC (the “State Council”) jointly issued the Opinions on Severely Cracking Down on Illegal Securities Activities According to Law, or the Opinions, which were made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems, will be taken to deal with the risks and incidents of China-concept overseas listed companies. As of the date of this prospectus, we have not received any inquiry, notice, warning, or sanctions from PRC government authorities in connection with the Opinions.

On June 10, 2021, the Standing Committee of the National People’s Congress of China, or the SCNPC, promulgated the PRC Data Security Law, which took effect in September 2021. The PRC Data Security Law imposes data security and privacy obligations on entities and individuals carrying out data activities, and introduces a data classification and hierarchical protection system based on the importance of data in economic and social development, and the degree of harm it will cause to national security, public interests, or legitimate rights and interests of individuals or organizations when such data is tampered with, destroyed, leaked, illegally acquired or used. The PRC Data Security Law also provides for a national security review procedure for data activities that may affect national security and imposes export restrictions on certain data an information.

In early July 2021, regulatory authorities in China launched cybersecurity investigations with regard to several China-based companies that are listed in the United States. The Chinese cybersecurity regulator announced on July 2 that it had begun an investigation of Didi Global Inc. (NYSE: DIDI) and two days later ordered that the company’s app be removed from smartphone app stores. On July 5, 2021, the Chinese cybersecurity regulator launched the same investigation on two other Internet platforms, China’s Full Truck Alliance of Full Truck Alliance Co. Ltd. (NYSE: YMM) and Boss of KANZHUN LIMITED (Nasdaq: BZ).

On August 17, 2021, the State Council promulgated the Regulations on the Protection of the Security of Critical Information Infrastructure, or the Regulations, which took effect on September 1, 2021. The Regulations supplement and specify the provisions on the security of critical information infrastructure as stated in the Cybersecurity Review Measures. The Regulations provide, among others, that protection department of certain industry or sector shall notify the operator of the critical information infrastructure in time after the identification of certain critical information infrastructure.

On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law of the PRC, or the Personal Information Protection Law, which took effect on November 1, 2021. As the first systematic and comprehensive law specifically for the protection of personal information in the PRC, the Personal Information Protection Law provides, among others, that (i) an individual’s consent shall be obtained to use sensitive personal information, such as biometric characteristics and individual location tracking, (ii) personal information operators using sensitive personal information shall notify individuals of the necessity of such use and impact on the individual’s rights, and (iii) where personal information operators reject an individual’s request to exercise his or her rights, the individual may file a lawsuit with a People’s Court.

On December 24, 2021, the CSRC released Provisions of the State Council on the Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments, hereinafter referred to as the “Administration Provisions”), as well as Administrative Measures for the Filing of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments, hereinafter referred to as the “Measures”). According to the Administration Provisions and the Measures, overseas offering and listing refers to overseas offerings by domestic companies of equity shares, depository receipts, convertible corporate bonds, or other equity-like securities, and overseas listing of the securities for trading. Overseas offering and listing, which is specifically divided into direct overseas offerings and listing and indirect overseas offerings and listing, shall be filed in accordance with the Measures. Our submission of a listing application will fall into the scope of overseas offering and listing provisions in the Administration Provisions and the Measures. If the Administration Provisions and the Measures take effect, we will be required to file with the CSRC in accordance with the Administration Provisions and the Measures. Since the Administration Provisions and the Measures have not come into force yet, we are not currently required to file with CSRC before listing our securities on Nasdaq.

Furthermore, according to the Administration Provisions, an overseas offering and listing is prohibited under any of the following circumstances: (1) if the intended securities offering and listing falls under specific clauses in national laws and regulations and relevant provisions prohibiting such financing activities; (2) if the intended securities offering and listing in an overseas market may constitute a threat to or endanger national security, as reviewed and determined by competent authorities under the State Council in accordance with law; (3) if there are material ownership disputes over equity, major assets, and core technology, etc.; (4) if, in the past three years, the domestic company or its controlling shareholders and actual controllers have committed corruption, bribery, embezzlement, misappropriation of property, or other criminal offenses disruptive to the order of the socialist market economy; or are currently under judicial investigation for suspicion of criminal offenses or under investigation for suspicion of major violations; (5) if, in the past three years, the board directors, or any supervisors or senior executives have been subject to administrative punishment for severe violations, or are currently under judicial investigation for suspicion of criminal offenses or under investigation for suspicion of major violations of law; or (6) other circumstances prescribed by the State Council. As of the date of this prospectus, we do not fall under any of the abovementioned circumstances that might prohibit us from overseas offering and listing.

On December 28, 2021, the CAC and other relevant PRC governmental authorities jointly promulgated the Cybersecurity Review Measures which took effect on February 15, 2022, and replaced the original Cybersecurity Review Measures promulgated on April 13, 2020. Pursuant to the Cybersecurity Review Measures, if critical information infrastructure operators purchase network products and services, or network platform operators conduct data processing activities that affect or may affect national security, they will be subject to cybersecurity review. A network platform operator holding more than one million users/users’ individual information also shall be subject to cybersecurity review before listing abroad. The cybersecurity review will evaluate, among others, the risk of critical information infrastructure, core data, important data, or a large amount of personal information being influenced, controlled or maliciously used by foreign governments and risk of network data security after going public overseas. In compliance with the Measures, we have submitted a written declaration and other materials required for the cybersecurity review to the CAC. Upon reviewing our materials in accordance with the Measures, the Office of Cybersecurity Review of the CAC, which is responsible for organizing cybersecurity reviews and developing relevant rules and regulations, informed us that we passed the cybersecurity review for this offering. As of the date of this prospectus, we have not been required to obtain, or been denied, any other permission from the PRC authorities to list on U.S. stock exchanges.

Given that the above-mentioned newly promulgated laws, regulations and policies were recently promulgated or issued, with a few not having taken effect yet, their interpretation, application and enforcement are subject to substantial uncertainties.

We must remit the offering proceeds to the PRC before they may be used to benefit our business in the PRC, and this process may take a number of months.

The proceeds of this offering must be sent back to the PRC, and the process for sending such proceeds back to the PRC may take several months after the closing of this offering. We may be unable to use these proceeds to grow our business until we receive such proceeds in the PRC. In order to remit the offering proceeds to the PRC, we will take the following actions:

First, we will open a special foreign exchange account for capital account transactions. To open this account, we must submit to State Administration for Foreign Exchange (“SAFE”) certain application forms, identity documents, transaction documents, form of foreign exchange registration of overseas investments by domestic residents, and foreign exchange registration certificate of the invested company.

Second, we will remit the offering proceeds into this special foreign exchange account.

Third, we will apply for settlement of the foreign exchange. In order to do so, we must submit to SAFE certain application forms, identity documents, payment order to a designated person, and a tax certificate.

The timing of the process is difficult to estimate because the efficiencies of different SAFE branches can vary materially. Ordinarily, the process takes several months to complete but is required by law to be accomplished within 180 days of application. Until the abovementioned approvals, the proceeds of this offering will be maintained in an interest-bearing account maintained by us in the United States.

PRC laws and regulations governing our current business operations are sometimes vague and uncertain and any changes in such laws and regulations may impair our ability to operate profitably.

The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference but have limited precedential value. Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and the enforcement of these laws, regulations and rules involves uncertainties.

In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The overall effect of legislation over the past three decades has significantly enhanced the protections afforded to various forms of foreign investments in China. However, China has not developed a fully integrated legal system, and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. In particular, the interpretation and enforcement of these laws and regulations involve uncertainties. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory provisions and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy. These uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual rights or tort claims. In addition, the regulatory uncertainties may be exploited through unmerited or frivolous legal actions or threats in attempts to extract payments or benefits from us.

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

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

Recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the “Opinions on Severely Cracking Down on Illegal Securities Activities According to Law,” or the Opinions, which was made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems will be taken to deal with the risks and incidents of China-concept overseas listed companies, and cybersecurity and data privacy protection requirements and similar matters. The Opinions and any related implementing rules to be enacted may subject us to compliance requirement in the future.

Our ability to transfer cash between subsidiaries, the consolidated VIE, and investors outside PRC or Hong Kong may be significantly restricted by the Chinese government.

We intend to keep any future earnings to re-invest in and finance the expansion of our business, and we do not anticipate that any cash dividends will be paid or any assets will be transferred in the foreseeable future. As of the date of this prospectus, no transfer of cash or other assets, distribution, or dividends payment has been made among the us, our subsidiaries, the consolidated VIE, or the investors. Under Cayman Islands law, a Cayman Islands company may pay a dividend on its shares out of either profit or share premium amount, provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts due in the ordinary course of business. If we determine to pay dividends on any of our Class A Ordinary Shares in the future, as a holding company, we will be dependent on receipt of funds from our Hong Kong subsidiary, EPWK HK. EPWK HK is permitted under the laws of Hong Kong SAR to provide funds to us through dividend distribution out of profits available for distribution (that is, accumulated realized profits less accumulated realized losses) or other distributable reserves but not through share capital.

However, we, our subsidiaries and the VIE’s abilities to use cash held in PRC or in a PRC entity through transfers, distributions, or dividends to fund operations or for other purposes outside of the PRC are subject to restrictions and limitations imposed by the PRC government. Current PRC regulations permit our indirect PRC subsidiaries to pay dividends to the Company only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Each of such entity in China is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation.

The majority of our and VIE's revenues are collected in Renminbi; thus, foreign exchange shortages and foreign exchange control may limit our ability to pay dividends or other payments, or otherwise meet our obligations denominated in foreign currencies.

Therefore, our ability to transfer cash between EPWK VIE and us, our subsidiaries outside of China, and investors for purposes including payment of dividends and fund operations may be significantly restricted.

There has been no public market for our Class A Ordinary Shares prior to this offering, and you may not be able to resell our Class A Ordinary Shares at or above the price you pay for them, or at all.

Prior to this offering, there has not been a public market for our Class A Ordinary Shares. We have applied to list our Class A Ordinary Shares on the Nasdaq Capital Market. However, an active public market for our Class A Ordinary Shares may not develop or be sustained after the offering, in which case the market price and liquidity of our Class A Ordinary Shares will be materially and adversely affected. Our Class A Ordinary Shares will not be listed on any exchange or quoted for trading on any over-the-counter system.

The initial public offering price for our Class A Ordinary Shares may not be indicative of prices that will prevail in the trading market and such market prices may be volatile.

The initial public offering price for our Class A Ordinary Shares will be determined by negotiations between us and the underwriters, and does not bear any relationship to our earnings, book value or any other indicia of value. We cannot assure you that the market price of our Class A Ordinary Shares will not decline significantly below the initial public offering price. The financial markets in the United States and other countries have experienced significant price and volume fluctuations in the last few years. Volatility in the price of our Class A Ordinary Shares may be caused by factors outside of our control and may be unrelated or disproportionate to changes in our results of operations.

You will experience immediate and substantial dilution in the net tangible book value of Class A Ordinary Shares purchased.

The initial public offering price of our Class A Ordinary Shares is substantially higher than the (pro forma) net tangible book value per share of our Class A Ordinary Shares. Consequently, assuming no exercise of over-allotment option by the underwriter, when you purchase our Class A Ordinary Shares in the offering and upon completion of the offering, you will incur immediate dilution of US$[ ] per share, based upon an initial public offering price of US$[ ] per shares, and after deducting estimated underwriters’ fees and commissions and estimated offering expenses payable by us. See “Dilution.” In addition, you may experience further dilution to the extent that additional Class A Ordinary Shares are issued upon exercise of outstanding options we may grant from time to time.

Substantial future sales of our Class A Ordinary Shares or the anticipation of future sales of our Class A Ordinary Shares in the public market could cause the price of our Class A Ordinary Shares to decline.

Sales of substantial amounts of our Class A Ordinary Shares in the public market after this offering, or the perception that these sales could occur, could cause the market price of our Class A Ordinary Shares to decline. An aggregate of 15,601,494 Class A Ordinary Shares will be outstanding before the consummation of this offering and [ ] Class A Ordinary Shares will be outstanding immediately after the consummation of this offering, assuming no exercise of the underwriters’ over-allotment option. The Class A Ordinary Shares outstanding after this offering will be available for sale upon the expiration of the lock-up period ending 180 days after the closing of the offering, subject to certain restrictions. See “Shares Eligible for Future Sale.” Any or all of these shares may be released prior to the expiration of the lock-up period at the discretion of the underwriters. Sales of these shares into the market could cause the market price of our Class A Ordinary Shares to decline.

We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future. As a result, you may only receive a return on your investment in our Class A Ordinary Shares if the market price of our Class A Ordinary Shares increases.

If securities or industry analysts do not publish research or reports about our business, or if the publish a negative report regarding our Class A Ordinary Shares, the price of our Class A Ordinary Shares and trading volume could decline.

The trading market for our Class A Ordinary Shares may depend in part on the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price of our Class A Ordinary Shares would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our Class A Ordinary Shares and the trading volume to decline.

The estimates of market opportunity, forecasts of market growth included in this prospectus may prove to be inaccurate, and any real or perceived inaccuracies may harm our reputation and negatively affect our business. Even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all.

Market opportunity estimates and growth forecasts included in this prospectus are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The variables that go into the calculation of our market opportunities are subject to change over time, and there is no guarantee that any particular number or percentage of addressable companies covered by our market opportunities estimates will purchase our products and solutions at all or generate any particular level of revenues for us. Even if the market in which we compete meets the size estimates and growth forecasted in this prospectus, our business could fail to grow for a variety of reasons, including reasons outside of our control, such as competition in our industry.

The market price of our Class A Ordinary Shares may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the initial public offering price.

The initial public offering price for our Class A Ordinary Shares will be determined through negotiations between the underwriters and us and may vary from the market price of our Class A Ordinary Shares following our initial public offering. If you purchase our Class A Ordinary Shares in our initial public offering, you may not be able to resell those shares at or above the initial public offering price. We cannot assure you that the initial public offering price of our Class A Ordinary Shares, or the market price following our initial public offering, will equal or exceed prices in privately negotiated transactions of our shares that have occurred from time to time prior to our initial public offering. The market price of our Class A Ordinary Shares may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Share prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, shareholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business.

Our management has broad discretion to determine how to use the funds raised in the offering and may use them in ways that may not enhance our results of operations or the price of our Class A Ordinary Shares.

We anticipate that we will use the net proceeds from this offering for working capital and other corporate purposes. Our management will have significant discretion as to the use of the net proceeds to us from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the market price of our Class A Ordinary Shares.

Our lack of effective internal controls over financial reporting may affect our ability to accurately report our financial results or prevent fraud which may affect the market for and price of our Ordinary Share.

To implement Section 404 of the Sarbanes-Oxley Act of 2002, the SEC adopted rules requiring public companies to include a report of management on the company’s internal control over financial reporting. Prior to filing the registration statement of which this prospectus is a part, we were not subject to these rules. As a result, we do not have in place effective disclosure controls and procedures or internal controls over financial reporting. We will be subject to the requirement that we maintain internal controls and that management perform periodic evaluation of the effectiveness of the internal controls. Effective internal control over financial reporting is important to prevent fraud. As a result, our business, financial condition, results of operations and prospects, as well as the market for and trading price of our Class A Ordinary Shares, may be materially and adversely affected if we do not have effective internal controls. We do not presently have the financial resources or personnel to develop or implement systems that would provide us with the necessary information on a timely basis so as to be able to implement financial controls. As a result, we may not discover any problems in a timely manner and current and potential shareholders could lose confidence in our financial reporting, which would harm our business and the trading price of our Class A Ordinary Shares. The absence of internal controls over financial reporting may inhibit investors from purchasing our shares and may make it more difficult for us to raise funds in a debt or equity financing.

Because we are an “emerging growth company,” we may not be subject to requirements that other public companies are subject to, which could affect investor confidence in us and our Class A Ordinary Shares.

As we are an “emerging growth company,” we may not be subject to requirements that other public companies are subject to, which could other requirements applicable to other public companies that are not emerging growth companies including, most significantly, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act for so long as we are an emerging growth company and a smaller reporting company. As a result, if we elect not to comply with such auditor attestation requirements, our investors may not have access to certain information they may deem important. See “Implications of Our Being an “Emerging Growth Company.”

We will incur increased costs as a result of being a public company, particularly after we cease to qualify as an “emerging growth company.”

Upon completion of this offering, we will become a public company and expect to incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and the Nasdaq Capital Market, impose various requirements on the corporate governance practices of public companies. As an “emerging growth company” pursuant to the JOBS Act, we may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. We expect these rules and regulations to increase our legal and financial compliance costs and to make some corporate activities more time-consuming and costlier. After we are no longer an “emerging growth company,” we expect to incur significant additional expenses and devote substantial management effort toward ensuring compliance increased disclosure requirements.

Since Mr. Guohua Huang will be able to exercise more than [ ]% of the total voting power of our issued and outstanding share capital following the offering, Mr. Huang will have the ability to elect directors and approve matters requiring shareholder approval.

Our ordinary shares consist of Class A and Class B Ordinary Shares. The holders of Class A Ordinary Shares are entitled to one vote for each such share held and shall be entitled to notice of any shareholders’ meeting, and, subject to the terms of memorandum and articles of association, to vote thereat. The Class A Ordinary Shares are not redeemable at the option of the holder and are not convertible into shares of any other class. The holders of Class B Ordinary Shares shall have the right to fifteen votes for each such share held, and shall be entitled to notice of any shareholders’ meeting and, subject to the terms of the memorandum and articles of association, to vote thereat. Holders of their Class B Ordinary Shares can hold their shares for any period of time.

The Class B Ordinary Shares are not redeemable at the option of the holder but are convertible into Class A Ordinary Shares at any time after issue at the option of the holder on a one to one basis. As a result, any future issuance of Class B Ordinary Shares may be dilutive to holders of Class A Ordinary Shares. Mr. Guohua Huang is currently the beneficial owner of all of our outstanding Class B ordinary, which are directly held by HGH HOLDINGS LIMITED, an entity 100% owned by Mr. Guohua Huang. After the offering, Mr. Guohua Huang will be able to exercise approximately [ ]% of the total voting power of our issued and outstanding share capital. As result, Mr. Guohua Huang will be able to exert significant voting influence over fundamental and significant corporate matters and transactions. Depending on the percentage, he may have the power to elect all directors and approve all matters requiring shareholder approval without the votes of any other shareholder. He will have significant influence over a decision to enter into any corporate transaction and has the ability to prevent any transaction that requires the approval of shareholders, regardless of whether or not our other shareholders believe that such transaction is in our best interests. Such concentration of voting power could have the effect of delaying, deterring, or preventing a change of control or other business combination, which could, in turn, have an adverse effect on the market price of our Class A Ordinary Shares or prevent our shareholders from realizing a premium over the then-prevailing market price for their Class A Ordinary Shares.

Following this offering, we will be a “controlled company” within the meaning of the NASDAQ Stock Market Rules and, as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.

As a result, you will not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements.

If we cease to qualify as a foreign private issuer, we would be required to comply fully with the reporting requirements of the Exchange Act applicable to U.S. domestic issuers, and we would incur significant additional legal, accounting and other expenses that we would not incur as a foreign private issuer.

We expect to qualify as a foreign private issuer upon the completion of this offering. As a foreign private issuer, we will be exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders will be exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as United States domestic issuers, and we will not be required to disclose in our periodic reports all of the information that United States domestic issuers are required to disclose. While we currently expect to qualify as a foreign private issuer immediately following the completion of this offering, we may cease to qualify as a foreign private issuer in the future.

Anti-takeover provisions in our memorandum and articles of association may discourage, delay or prevent a change in control.

Some provisions of our memorandum and articles of association, which will become effective upon the completion of this offering, may discourage, delay or prevent a change in control of our company or management that shareholders may consider favorable, including, among other things, the following:

Our board of directors may decline to register transfers of Class A Ordinary Shares in certain circumstances.

Our board of directors may, in its sole discretion, decline to register any transfer of any Ordinary Share which is not fully paid up or on which we have a lien. Our directors may also decline to register any transfer of any share unless (i) the instrument of transfer is lodged with us, accompanied by the certificate for the shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer; (ii) the instrument of transfer is in respect of only one class of shares; (iii) the instrument of transfer is properly stamped, if required; (iv) in the case of a transfer to joint holders, the number of joint holders to whom the share is to be transferred does not exceed four; (v) the shares conceded are free of any lien in favor of us; or (vi) a fee of such maximum sum as Nasdaq Capital Market may determine to be payable, or such lesser sum as our board of directors may from time to time require, is paid to us in respect thereof.

If our directors refuse to register a transfer they shall, within one month after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal. The registration of transfers may, on 14 days’ notice being given by advertisement in such one or more newspapers or by electronic means, be suspended and the register closed at such times and for such periods as our board of directors may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than 30 days in any year.

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

Cayman Islands law provides shareholders with only limited rights to requisition a general meeting and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company’s articles of association. Our articles of association allow sour shareholders holding shares representing in aggregate not less than ten per cent in par value of the issued Shares which as at that date carry the right to vote at general meetings, to requisition an extraordinary general meeting of our shareholders, in which case our directors are obliged to call such meeting and to put the resolutions so requisitioned to a vote at such meeting. Although our articles of association do not provide our shareholders with any right to put any proposals before annual general meetings or extraordinary general meetings not called by such shareholders, any shareholder may submit a proposal to our Board of Directors for consideration of inclusion in a proxy statement. Advance notice of at least fifteen calendar days is required for the convening of our annual general shareholders’ meeting and any other general meeting of our shareholders. For so long as the Shares are listed on the Nasdaq Capital Market, a quorum required for a meeting of shareholders consists of at least one shareholder present or by proxy, representing not less than one-third in nominal value of the total issued voting shares in our company.

If we are classified as a passive foreign investment company, United States taxpayers who own our Class A Ordinary Shares may have adverse United States federal income tax consequences.

A non-U.S. corporation such as ourselves will be classified as a passive foreign investment company, which is known as a PFIC, for any taxable year if, for such year, either

Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets.

If we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. taxpayer who holds our Class A Ordinary Shares, the U.S. taxpayer may be subject to increased U.S. federal income tax liability and may be subject to additional reporting requirements.

Depending on the amount of cash we raise in this offering, together with any other assets held for the production of passive income, it is possible that, for our 2019 taxable year or for any subsequent year, more than 50% of our assets may be assets which produce passive income. We will make this determination following the end of any particular tax year, which in our case is the calendar year. Although the law in this regard is unclear, we are treating EPWK VIE as being owned by us for United States federal income tax purposes, not only because we control their management decisions, but also because we are entitled to the economic benefits associated with EPWK VIE, and as a result, we are treating EPWK VIE as our wholly-owned subsidiary for U.S. federal income tax purposes. For purposes of the PFIC analysis, in general, a non-U.S. corporation is deemed to own its pro rata share of the gross income and assets of any entity in which it is considered to own at least 25% of the equity by value. Therefore, the income and assets of EPWK VIE should be included in the determination of whether or not we are a PFIC in any taxable year.

For a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were determined to be a PFIC, see “Taxation – United States Federal Income Taxation – Passive Foreign Investment Company.”

Our Class A Ordinary Shares may trade under $5.00 per share and thus will be a penny stock. Trading in penny stocks has certain restrictions and these restrictions could negatively affect the price and liquidity of our shares.

Our Class A Ordinary Shares may trade below $5.00 per share after listing. As a result, our Class A Ordinary Shares would be known as a “penny stock”, which is subject to various regulations involving disclosures to be given to you prior to the purchase of any penny stock. The SEC has adopted regulations which generally define a “penny stock” to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. Depending on market fluctuations, our Class A Ordinary Shares could be considered to be a “penny stock”. A penny stock is subject to rules that impose additional sales practice requirements on broker/dealers who sell these securities to persons other than established Members and accredited investors. For transactions covered by these rules, the broker/dealer must make a special suitability determination for the purchase of these securities. In addition, the broker/dealer must receive the purchaser’s written consent to the transaction prior to the purchase. The broker/dealer must also provide certain written disclosures to the purchaser. Consequently, the “penny stock” rules may restrict the ability of broker/dealers to sell our securities and may negatively affect the ability of holders of shares of our Class A Ordinary Shares to resell them. These disclosures require you to acknowledge that you understand the risks associated with buying penny stocks and that you can absorb the loss of your entire investment. Penny stocks generally do not have a very high trading volume. Consequently, the price of the stock is often volatile, and you may not be able to buy or sell the stock when you want to.

This prospectus contains “forward-looking statements,” all of which are subject to risks and uncertainties. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by the use of words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may” or other similar expressions in this prospectus. These statements are likely to address our growth strategy, financial results and product and development programs. You must carefully consider any such statements and should understand that many factors could cause actual results to differ from our forward-looking statements. These factors may include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward looking statement can be guaranteed and actual future results may vary materially. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

We describe material risks, uncertainties and assumptions that could affect our business, including our financial condition and results of operations, under “Risk Factors.” We base our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that actual outcomes and results may, and are likely to, differ materially from what is expressed, implied or forecast by our forward-looking statements. Accordingly, you should be careful about relying on any forward-looking statements. Except as required under the federal securities laws, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this prospectus, whether as a result of new information, future events, changes in assumptions, or otherwise.

This prospectus contains data related to the crowdsourcing industry in China. These data include projections that are based on a number of assumptions which have been derived from industry and government sources which we believe to be reasonable. The crowdsourcing service industry may not grow at the rate projected by industry data, or at all. The failure of these industries to grow as anticipated is likely to have a material adverse effect on our business and the market price of our Class A Ordinary Shares. In addition, the rapidly changing nature of these industries subjects any projections or estimates relating to the growth prospects or future condition of our industry to significant uncertainties. Furthermore, if any one or more of the assumptions underlying the industry data turns out to be incorrect, actual results may, and are likely to, differ from the projections based on these assumptions. You should not place undue reliance on these forward-looking statements.

We are a Cayman Islands company incorporated on March 24, 2022 as an exempted company with limited liability. Exempted companies are Cayman Islands companies wishing to conduct business outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Act. As an exempted company, we have applied for and received a tax exemption undertaking from the Cayman Islands government that, in accordance with section 6 of the Tax Concessions Law (As Revised) of the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable (i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us.

All of our assets are located in the PRC. In addition, a majority of our directors and officers are nationals or residents of the PRC and all or a substantial portion of their assets are located outside the United States. Specifically, Guohua Huang, our Chairman of the Board of Directors and Chief Executive Officer, Shuangquan Lin, our Chief Operating Officer, and Conghui Lin, our Chief Financial Officer, are all Chinese citizens living in China. As a result, it may be difficult for investors to effect service of process within the United States upon us or these persons, or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States.

We have appointed Cogency Global Inc. as our agent to receive service of process with respect to any action brought against us in the United States District Court for the Southern District of New York under the federal securities laws of the United States or of any state in the United States or any action brought against us in the Supreme Court of the State of New York in the County of New York under the securities laws of the State of New York.

We have been advised by our Cayman Islands legal counsel, Ogier, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the securities laws of the United States or any State; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the securities laws of the United States or any State, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, and or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

Dentons, our counsel as to PRC law, has advised us that there is uncertainty as to whether the courts of China would:

Dentons has further advised us that the recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based either on treaties between China and the jurisdiction where the judgment is made or on principles of reciprocity between jurisdictions. China does not have any treaties or other form of reciprocity with the United States that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC law or national sovereignty, security or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States. Under the PRC Civil Procedures Law, foreign shareholders may originate actions based on PRC law against us in the PRC, if they can establish sufficient nexus to the PRC for a PRC court to have jurisdiction, and meet other procedural requirements, including, among others, the plaintiff must have a direct interest in the case, and there must be a concrete claim, a factual basis and a cause for the suit. However, it would be difficult for foreign shareholders to establish sufficient nexus to the PRC by virtue only of holding our Class A Ordinary Shares.

There are uncertainties as to whether the courts of Hong Kong will recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States; or entertain original actions brought in each respective jurisdiction against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States. Foreign judgments of United States courts will not be directly enforced in Hong Kong as there are currently no treaties or other arrangements providing for reciprocal enforcement of foreign judgments between Hong Kong and the United States. However, the common law permits an action to be brought upon a foreign judgment. That is to say, a foreign judgment itself may form the basis of a cause of action since the judgment may be regarded as creating a debt between the parties to it. In a common law action for enforcement of a foreign judgment in Hong Kong, the enforcement is subject to various conditions, including but not limited to, the judgment is for a definite sum of money in a civil matter and not in respect of taxes, fines, penalties, or similar charges, the judgment is a final and conclusive and has not been stayed or satisfied in full, the judgment is from a competent court, the judgment was not obtained by fraud, misrepresentation or mistake nor obtained in proceedings which contravenes the rules of natural justice and the enforcement of the judgment is not contrary to public policy in Hong Kong, Hong Kong courts may accept such judgment obtained from a United States court as a debt due under the rules of common law. However, a separate legal action for debt must be commenced in Hong Kong in order to recover such debt from the judgment debtor.

We estimate that we will receive net proceeds from this offering, after deducting the estimated underwriting discounts and commissions and the estimated offering expenses payable by us and based upon an initial public offering price of US$[ ] per Class A Ordinary Share, of approximately $[ ] (excluding any exercise of the underwriters’ over-allotment option).

The primary purposes of this offering are to create a public market for our shares for the benefit of all shareholders, retain talented employees by providing them with equity incentives, and obtain additional capital. We plan to use the net proceeds of this offering as follows:

The foregoing represents our current intentions based upon our present plans and business conditions to use and allocate the net proceeds of this offering. Our management, however, will have significant flexibility and discretion to apply the net proceeds of this offering. If an unforeseen event occurs or business conditions change, we may use the proceeds of this offering differently than as described in this prospectus. See “ Risk Factors– - Risks Relating to this Offering and Our Ordinary Share–- Our management has broad discretion to determine how to use the funds raised in the offering and may use them in ways that may not enhance our results of operations or the price of our Class A Ordinary Shares.”

To the extent that the net proceeds we receive from this offering are not immediately used for the above purposes, we intend to invest our net proceeds in short-term, interest-bearing bank deposits or debt instruments.

In using the proceeds of this offering, we are permitted under PRC laws and regulations as an offshore holding company to provide funding to our PRC subsidiary only through loans or capital contributions and to our consolidated VIE only through loans, subject to satisfaction of applicable government registration and approval requirements. We cannot assure you that we will be able to obtain these government registrations or approvals on a timely basis, or at all. See “Risk Factors – Risks Relating to Our Corporate Structure – PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of this offering to make loans or additional capital contributions to our PRC subsidiaries and the VIE, which could materially and adversely affect our liquidity and our ability to fund and expand our business.”

We intend to keep any future earnings to finance the expansion of our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future.

Under Cayman Islands law, a Cayman Islands company may pay a dividend on its shares out of either profit or share premium amount, provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts due in the ordinary course of business.

If we determine to pay dividends on any of our Class A Ordinary Shares in the future, as a holding company, we will be dependent on receipt of funds from our Hong Kong subsidiary, EPWK HK. EPWK HK is permitted under the laws of Hong Kong SAR to provide funds to us through dividend distribution out of profits available for distribution (that is, accumulated realized profits less accumulated realized losses) or other distributable reserves but not through share capital.

The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. Furthermore, if our subsidiaries and affiliates in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments. If we or our subsidiaries are unable to receive all of the revenues from our operations through the current VIE Agreements, we may be unable to pay dividends on our Class A Ordinary Shares.

In order for us to pay dividends to our shareholders, we will rely on payments made from EPWK VIE to EPWK WFOE, pursuant to VIE Agreements between them, and the distribution of such payments to EPWK HK as dividends from our PRC subsidiaries. Certain payments from our EPWK VIE to EPWK WFOE are subject to PRC taxes, including business taxes and VAT. In addition, if EPWK VIE or our PRC subsidiary incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us.

Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC project. However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including without limitation that (a) the Hong Kong project must be the beneficial owner of the relevant dividends; and (b) the Hong Kong project must directly hold no less than 25% share ownership in the PRC project during the 12 consecutive months preceding its receipt of the dividends. In current practice, a Hong Kong project must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by our PRC subsidiary to its immediate holding company, EPWK HK. As of the date of this prospectus, we have not applied for the tax resident certificate from the relevant Hong Kong tax authority. EPWK HK intends to apply for the tax resident certificate when EPWK WFOE plans to declare and pay dividends to EPWK HK. See “Risk Factors- There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiary, and dividends payable by our PRC subsidiary to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.”

You should read this capitalization table in conjunction with “Use of Proceeds,” “Selected Consolidated Financial and Operating Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the related notes appearing elsewhere in this prospectus.

A US$1.00 increase (decrease) in the initial public offering price of US$[ ] per Ordinary Share would increase (decrease) each of additional paid-in capital, total shareholders’ equity and total capitalization by US$[ ] million, assuming the number of Class A Ordinary Shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated expenses payable by us.

If you invest in our Class A Ordinary Shares, your interest will be diluted for each Ordinary Share you purchase to the extent of the difference between the initial public offering price per Ordinary Share and our net tangible book value per Ordinary Share after this offering. Dilution results from the fact that the initial public offering price per Ordinary Share is substantially in excess of the net tangible book value per Ordinary Share attributable to the existing shareholders for our presently outstanding Class A Ordinary Shares.

Our net tangible book value as of [ ], 2022 was approximately US$[ ], or US$[ ] per Ordinary Share. Net tangible book value represents the amount of our total consolidated tangible assets, less the amount of our total consolidated liabilities and offering cost. Dilution is determined by subtracting the as adjusted net tangible book value per Ordinary Share from the initial public offering price per Ordinary Share and after deducting the estimated commissions to the underwriters and the estimated offering expenses payable by us.

Dilution results from the fact that the per Class A Ordinary Shares offering price is substantially in excess of the book value per Class A Ordinary Shares attributable to the existing shareholders for our presently outstanding Class A Ordinary Shares. After giving effect to our issuance and sale of [ ] shares in this Offering at an offering price of $[ ] per share, assuming no exercise of overallotment and after deducting the estimated underwriting discounts and offering expenses payable by us, the pro forma as adjusted net tangible book value as of [ ], 2022 would have been $[ ], or $[ ] per share. This represents an immediate increase in net tangible book value to existing shareholders of $[ ] per share. The Offering Price per share will significantly exceed the net tangible book value per share. Accordingly, new investors who purchase shares in this Offering will suffer an immediate dilution of their investment of $[ ] per share. The following table illustrates this per share dilution to the new investors purchasing shares in this Offering:

The following charts illustrate our pro forma proportionate ownership, upon completion of this Offering by present shareholders and investors in this Offering, compared to the relative amounts paid by each. The charts reflect payment by present shareholders as of the date the consideration was received and by investors in this Offering at the offering price without deduction of commissions or expenses. The charts further assume no changes in net tangible book value other than those resulting from the offering.

We were incorporated in the Cayman Islands on March 24, 2022. Our wholly-owned subsidiary, EPWK Group Limited (“EPWK BVI”), was incorporated in the British Virgin Islands on April 4, 2022. EPWK BVI wholly owns EPWK Holdings Limited (“EPWK HK”), a company incorporated in Hong Kong on April 28, 2022. Yipinweike (Guangzhou) Network Technology Co., Ltd. (“EPWK WFOE”), EPWK HK’s wholly owned subsidiary, was organized pursuant to PRC laws on July 26, 2022. Our variable interest entity, Xiamen EPWK Network Technology Co., Ltd., which we refer to as EPWK VIE, was established on March 25, 2011 in Xiamen, Fujian Province, PRC pursuant to PRC laws. EPWK VIE’s shareholders include certain PRC residents and corporate entities controlled by PRC residents. On August 11, 2022, the Company consummated a reorganization pursuant to which, EPWK WFOE, EPWK VIE and EPWK VIE’s shareholders entered into a series of contractual arrangements. Such agreements are described under “Business – Contractual Arrangements between EPWK WFOE and EPWK VIE. EPWK Holdings Ltd. is a holding company with no business operation other than holding the shares in EPWK HK and EPWK HK is a pass-through entity with no business operation. EPWK WFOE is exclusively engaged in the business of managing the operation of EPWK VIE.

On June 1, 2022, EPWK VIE established a wholly-owned subsidiary, Yipinhuicheng (Guangzhou) Network Technology Co., Ltd., a PRC company. Yipinhuicheng (Guangzhou) Network Technology Co., Ltd. is engaged in software development worldwide; network and information security software development; information technology consulting services.

Pursuant to PRC laws, each entity formed under PRC law shall have certain business scope approved by the Administration of Industry and Commerce or its local counterpart. As such, EPWK WFOE’s business scope is to primarily engage in business development, technology service, technology consulting, intellectual property service and business management consulting. Since the sole business of EPWK WFOE is to provide EPWK VIE with technical support, consulting services and other management services relating to its day-to-day business operations and management in exchange for a consulting fee solely at EPWK WFOE’s discretion and can be the net income of EPWK VIE, such business scope is necessary and appropriate under the PRC laws. EPWK VIE, on the other hand, has been granted a business scope different from EPWK WFOE to enable it to provide software development and IT services, animation and game development, advertising production, tax and financial advisory services, corporate management services, and certain value-added telecommunication services.

We control EPWK VIE through contractual agreements, which are described under “Business – Contractual Arrangements between EPWK WFOE and EPWK VIE. EPWK Holdings Ltd. is a holding company with no business operation other than holding the shares in EPWK HK and EPWK HK is a pass-through entity with no business operation. EPWK WFOE is exclusively engaged in the business of managing the operation of EPWK VIE.

The following diagram illustrates our corporate structure, including our subsidiaries and the VIE and its subsidiaries, as of the date of this prospectus and upon completion of our IPO based on the number of [ * ] Shares being offered, assuming no exercise of underwriters’ over-allotment option.

For details of our principal shareholders’ ownership, please refer to the beneficial ownership table in the section captioned “Principal Shareholders.”

Due to PRC legal restrictions on foreign ownership in the network culture business, neither we nor our subsidiaries own any equity interest in EPWK VIE. Instead, we receive the economic benefits of EPWK VIE’s business operation through a series of contractual arrangements. EPWK WFOE, EPWK VIE and its shareholders entered into a series of contractual arrangements, also known as VIE Agreements, on August 11, 2022. Under the VIE Agreements, EPWK WFOE is entitled to collect a service fee that is equal to 100% of the net income of the EPWK VIE, and EPWK WFOE has the power to direct the activities of the EPWK VIE that can significantly impact the EPWK VIE’s economic performance and is obligated to absorb losses of the EPWK VIE, which makes us, through our direct ownership of 100% of the equity in EPWK WFOE, the primary beneficiary to receive the economic benefits of the EPWK VIE’s business operation for accounting purposes only. Because our economic interest in the EPWK VIE is more than insignificant exposure to potential losses of or benefits from it, and we have power over the most significant economic activities of the EPWK VIE, we have consolidated the financial results of the EPWK VIE in our consolidated financial statements under generally accepted accounting principles in the U.S. (“U.S. GAAP”). However, the economic interest in and the power over the EPWK VIE are based on contractual agreements and are not equivalent to equity ownership in the business of the EPWK VIE, and the structure involves unique risks to investors.

Pursuant to the exclusive business cooperation agreement between EPWK WFOE and EPWK VIE, EPWK WFOE has the exclusive right to provide EPWK VIE with technical support services, consulting services and other services, including technical support, technical assistance, technical consulting, and professional training necessary for EPWK VIE’s operation, network support, database support, software services, business management consulting, grant use rights of intellectual property rights, lease hardware and device, provide system integration service, research and development of software and system maintenance, provide labor support and to develop the related technologies based on EPWK VIE’s needs. In exchange, EPWK WFOE is entitled to a service fee that equals to all of the consolidated net income after offsetting previous year’s loss (if any) of EPWK VIE. The service fees may be adjusted based on the actual scope of services rendered by EPWK WFOE and the operational needs of EPWK VIE.

Pursuant to the exclusive business cooperation agreement, EPWK WFOE has the unilateral right to adjust the service fee at any time, and EPWK VIE has no right to adjust the service fee. We believe that such conditions under which the service fee may be adjusted will be primarily based on the needs of EPWK VIE to operate and develop its business in the AR market. For example, if EPWK VIE needs to expand its business, increase research input or consummate mergers or acquisitions in the future, EPWK WFOE has the right to decrease the amount of the service fee, which would allow EPWK VIE to have additional capital to operate and develop its business.

Pursuant to the irrevocable commitment letter, the individual shareholders of EPWK VIE commit that their spouses or inheritors have no right to claim any rights or interest in relation to the shares that they hold in EPWK VIE and have no right to impose any impact on the daily managing duties of EPWK VIE, and commit that if any event which refrains them from exercising shareholders’ rights as a registered shareholder, such as death, incapacity, divorce or any other event, could happen to them, the shareholders of EPWK VIE will take corresponding measures to guarantee the rights of other registered shareholders and the performance of the Contractual Arrangements. The letter is irrevocable and shall not be withdrawal without the consent of EPWK WFOE. The spouses of EPWK VIE individual shareholders also undertake that they have no right to claim any rights or interest in relation to the shares that they hold in EPWK VIE and have no right to impose any impact on the daily managing duties of EPWK VIE.

We are currently not required to obtain permission from any of the PRC authorities to operate and issue our Class A Ordinary Shares to foreign investors. In addition, we, our subsidiaries, or VIE are not required to obtain permission or approval from the PRC authorities including CSRC or CAC for the VIE’s operation, nor have we, our subsidiaries, or VIE received any denial for the VIE’s operation. However, recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the “Opinions on Severely Cracking Down on Illegal Securities Activities According to Law,” or the Opinions, which was made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems will be taken to deal with the risks and incidents of China-concept overseas listed companies, and cybersecurity and data privacy protection requirements and similar matters. The Opinions and any related implementing rules to be enacted may subject us to compliance requirement in the future. Given the current regulatory environment in the PRC, we are still subject to the uncertainty of different interpretation and enforcement of the rules and regulations in the PRC adverse to us, which may take place quickly with little advance notice.

Dividend Distributions or Assets Transfer among the Holding Company, its Subsidiaries and the Consolidated VIE

We intend to keep any future earnings to re-invest in and finance the expansion of our business, and we do not anticipate that any cash dividends will be paid or any assets will be transferred in the foreseeable future. As of the date of this prospectus, there has been no distribution of dividends or assets among the holding company, the subsidiary or the consolidated VIE. Under Cayman Islands law, a Cayman Islands company may pay a dividend on its shares out of either profit or share premium amount, provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts due in the ordinary course of business. If we determine to pay dividends on any of our Class A Ordinary Shares in the future, as a holding company, we will be dependent on receipt of funds from our Hong Kong subsidiary, EPWK HK. EPWK HK is permitted under the laws of Hong Kong SAR to provide funds to us through dividend distribution out of profits available for distribution (that is, accumulated realized profits less accumulated realized losses) or other distributable reserves but not through share capital.

Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC project. However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including without limitation that (a) the Hong Kong project must be the beneficial owner of the relevant dividends; and (b) the Hong Kong project must directly hold no less than 25% share ownership in the PRC project during the 12 consecutive months preceding its receipt of the dividends. In current practice, a Hong Kong project must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by our PRC subsidiary to its immediate holding company, EPWK HK. As of the date of this prospectus, we have not applied for the tax resident certificate from the relevant Hong Kong tax authority. EPWK HK intends to apply for the tax resident certificate when EPWK WFOE plans to declare and pay dividends to EPWK HK. See “Risk Factors- There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiary, and dividends payable by our PRC subsidiary to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.”

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with “Selected Condensed Consolidating Financial Statements of Parent, Subsidiaries, VIE and its Subsidiaries” and our consolidated financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this prospectus. See “Special Note Regarding Forward-Looking Statements.”

Our mission is to add value to our users in both service supply and demand sides. We create an innovative and efficient crowdsourcing platform to connect businesses with great talents.

We operate the second largest online marketplace in terms of GMV according to the F&S report to enable businesses (buyers) and service providers (sellers) to find each other. During the past three years from 2019 to 2021, our platform enabled approximately US$ 804 million (RMB 5.39 billion) of GMV across 2.23 million projects between 15.33 million sellers and 7.67 million buyers from all 34 provinces in China. In 2019, we enabled US$210 million of GMV across 600,000 projects. In 2020, we enabled US$ 254 million of GMV across 0.7 million projects. In 2021, we enabled US$340 million of GMV across 0.9 million projects.

Our marketplace platform was launched in 2011 and we have achieved significant growth ever since our inception. Our platform users consist of buyers who seek talents for their jobs and sellers who offer different talents and skills. We currently have over 23 million registered users with an average annual growth rate of 26.69% for the last 7 years from 2015 to 2021, and offer an expansive catalog to provide diversified services to businesses of all sizes. Our average annual active users, or AAU, is 10.13 million. Our daily inquiries well exceed 10,000 from logo design to business name selection to software development. Our GMV increased by 33.5 % from US$ 254 million (RMB 1.755 billion) in 2020 to US$ 340 million (RMB 2.19 billion) in 2021.

Our results of operations and financial condition are affected by the general factors driving digital economy in China, which include China’s overall economic growth and level of per capita disposable income, growth of mobile Internet usage, and penetration rate. They are also affected by factors that drive the crowdsourcing industry in China, such as increased crowdsourcing downstream demand, growing labor costs, government policies and initiatives, and technology development. As a result, unfavorable changes in any of these general factors could materially and adversely affect demand for our services and our results of operations.

While our business is influenced by the general factors set forth above, our results of operations are more directly affected by specific factors relating to our business, including:

Our revenue mainly comes from providing various value-added services for our users on both supply and demand sides. In order to increase and maintain our active user pool, first, we will focus our marketing efforts on actively promoting and obtaining users, and build up an efficient after-sales support system to maintain user relations.

As shown in the figure below, we have been able to maintain an annual growth rate of about 30% since 2015 before hitting by the COVID-19 pandemic. After the outbreak of the COVID-19 pandemic at the end of 2019, the growth rate decreased to 2.69% in 2020 but quickly returned to an annual growth rate of 24.37% in 2021. As more buyers start to understand and trust our online task transactions, we could obtain higher customer growth rate and consumption proportion. We believe that the task oriented and flexible online task transactions with little geographical restrictions will provide an efficient option to the traditional way of fulfilling all tasks by hiring employees.

Whether we can continue to develop our user registration and value-added consumption mainly depends on our excellent operation and promotion team, personalized user experience and accurate intelligent matching of buyers and sellers. Therefore, we will continue to focus on multi-channel marketing methods, establish a perfect combination of online and offline promotion methods, and establish a perfect promotion matrix, especially the traffic acquisition of short video platform and information flow platform. We also plan to enhance our artificial intelligence and big data technology capabilities to provide personalized user experience, user matching ancillary services, more effective and flexible communication methods for our users, and improve the efficiency and reliability of our marketplace.

We will continue to improve our brand recognition to attract more users to our online marketplace as well as shared offices.

We have an R&D team of 83 professional staff to improve our online marketplace continuously. Through powerful artificial intelligence algorithms and large data capacity, we improve the two-way matching accuracy between buyers and sellers. We also focus on optimizing the online marketplace such as providing more convenient user interface, more supporting tools and databases, and better user data security. In order to expand our services to existing paying corporate users, we plan to launch new value-added services, and recommend more customized services according to the analysis of users’ historical data.

Our operation team constantly explores and tests new products and services to meet market trends and user requirements. Currently, we offer services in seven categories with over 40 sub-categories and more than 300 items. We constantly adjust and add subdivided service categories according to the continuous changes of domestic and international markets. For example, short video and smart products have been gaining popularity and growth momentum in the domestic markets. Accordingly, we have added and promoted short video production, film production, face recognition, machine learning, Internet of things on our marketplace. With the popularity of the concept of meta universe in domestic and international markets, it may give birth to more products or industrial layout. We also keep up with the market trend and are ready to expand our service categories to meet the service demand of the market for emerging industries. We will continue to add more service categories to better satisfy buyer requirements and attract more sellers with different skills.

Our ability to manage our costs and expenses effectively is critical to the success of our business. Through optimized and adjusted business process, talent selection and retention, systematic employee training, and cross-department cooperation, we could effectively reduce our labor cost and ensure productivity. We also find innovative ways to control our marketing and administrative expenses to improve our profit margin.

We plan to continuously evaluate various investment opportunities, including acquiring local office sharing brands with strong regional influence and companies that may help us further integrate and refine our services. Furthermore, we plan to pursue additional investment opportunities through investing in relevant service providers or in start-ups and SMEs in our incubation and acceleration programs. With the support of our platform and ecosystem, we expect that the investees’ business will grow with us, and the services provided by our investees could help satisfy the demands of our other customers.

Impact of the COVID-19 Pandemic on Our Operations and Financial Performance Due to the epidemic control requirements, the resumption of work was delayed and the employees could not return to their posts in time, so the Company could not carry out business normally and smoothly. During the lockdown period from February to May in 2020, online working was adopted, the work efficiency was affected, and the work that needs to be carried out on the spot (such as certification audit) could not be carried out. In addition, we provided certain discounts or subsidies for buyers and sellers. All of the above generally led to a decrease in our revenue. For our buyers and sellers, there is also a delay in returning to work and reduction in business scale, resulting in a reduction in the number of orders required and a delay in the completion of orders, which has an impact on the growth of the GMV. Overall, our net revenues decreased by 11.93% from US$12.9 million in 2020 to US$11.4 million in 2021 for the years ended June 30. The situation improved in the next period, our net revenues increased by 12.71% to US$12.8 million in 2022 for the years ended June 30.

Since the outbreak of COVID-19, buyers started to understand and experiment with online task transactions. Buyers who are used to offline transactions need time to switch tasks online. In addition, in 2021, the epidemic broke out frequently in many places in China. Xiamen where the consolidated VIE is located, had a serious emergency lockdown for several months. Due to the impact of coexisting with the epidemic, the operation status of micro, small and medium-sized enterprises in China have not been fundamentally improved, especially in the software and information technology industry. Therefore, micro, small and medium-sized enterprises are relatively cautious about using task services. In response to that, the VIE have been constantly improving the quality of our service to attract users to our platform and enhance their confidence in trading through and acquiring value-added services from our marketplace. To achieve a win-win situation for users and the platform, the platform has taken a variety of measures, including launch various support programs that provide first-time sellers with exclusive support policies, randomly select and give out short-term free member services to users, design additional service gifts such as free consultation sessions on IP rights to users in areas affected by COVID-19, and host complimentary monthly online training for entrepreneurs who are interested in selling services on the VIE’s platform; The VIE also diversifies its promotion channels by rewarding current users who participate in the task and service promotions and increasing product exposure to attract potential customers through the combination of online live broadcast and offline marketing events.

On the other hand, given the security and efficiency of online services, and acceptance of the online task transactions by the market, buyers, small, medium and micro enterprises will have greater confidence in online task transactions, customized service and intellectual property services. We believe that global shelter-in-place restrictions have encouraged businesses to invest more in their online operations and sellers to spend more time online, both of which have served us well.

We have benefited from favorable tax policies promulgated by the national and local governments of the PRC, which assisted our recovery from the impact of COVID-19. For instance, according to a notice jointly issued by the Ministry of Finance and the State Taxation Administration, revenues subject to an original value-added tax rate of 3% and generated from March 1, 2020 to December 31, 2020 were reduced to 1%, which applied to revenues generated by all subsidiaries of the VIE. Besides, we have benefited from the government’s social insurance exemption during the epidemic period. From February 2020 to December 2020, the accumulated exemption was about USD$160,000.

The global spread of COVID-19 pandemic in major countries of the world may also result in global economic distress, and the extent to which it may affect our results of operations will depend on future developments of the COVID-19 pandemic, which are highly uncertain and difficult to predict. See “Risk Factors – Risks Relating to Our Business Operations – We face risks related to health epidemics such as the COVID-19, and other outbreaks, which could significantly disrupt our operations and adversely affect our business, financial condition and results of operations.”

The Company provides substantially all of its services in China via its VIE and its subsidiaries, due to PRC legal restrictions of foreign ownership in certain sectors. Substantially all of the Company’s revenues, costs and net income in China are directly or indirectly generated through the VIE and its subsidiaries. The Company has signed various agreements with its VIE and legal shareholders of the VIE to allow the transfer of economic benefits from the VIE to the Company and to direct the activities of the VIE.

Total assets and liabilities presented on the Company’s consolidated balance sheets and revenue, expense, net income presented on consolidated statement of operations and comprehensive income as well as the cash flow from operating, investing and financing activities presented on the consolidated statement of cash flows are substantially the financial position, operation and cash flow of the Company’s VIE and VIE’s subsidiaries. The Company has not provided any financial support to the VIE and the VIE’s subsidiaries for the years ended at June 30, 2022 and 2021. Our variable interest entities accounted for an aggregate of 100% and 100% of our total assets and total liabilities as of June 30, 2022 and 2021, respectively. As of June 30, 2022 and 2021, $713,649 and $572,788 of cash and cash equivalents were denominated in RMB, respectively. The following table sets forth the assets, liabilities, results of operations and changes in cash, cash equivalents the VIE and its subsidiaries taken as a whole, which were included in the Company’s consolidated balance sheets and statements of comprehensive income and statements of cash flows with intercompany transactions eliminated:

The following table sets forth our results of operations with line items in absolute amounts and as a percentage of our net revenues for the periods indicated:

Net revenues consist of revenues from online promotion services, value-added services, and shared office rental and management. The following table sets forth a breakdown of our net revenues by type in absolute amounts and as a percentage of our net revenues for the periods indicated:

Online Promotion revenue. The majority of the Company’s revenue is derived from services provided to our seller users to promote their services to our buyer users. The Company recognizes the revenues on a gross basis as the Company is acting as a principal in these transactions and is responsible for fulfilling the promise to provide the specified services. The Company recognizes revenue when services are rendered. Most of the payments are made from sellers’ subscription payment. Therefore, the online promotion revenues are amortized over the subscription period on a straight line basis.

Value-Added Services revenue. The Company provides various value-added services to our users, such as bookkeeping services, tax filing services, IP application and registration services, and qualification certification services. The Company recognizes revenue when the service is performed. Revenues from value-added services are recognized on a gross basis, as the Company is responsible to provide the specified services, and it also has the discretion to set service fee charged to the customers.

Shared office rental and management revenue. The Company provides shared office space to startup companies or small companies, and it also provides property management services to these companies using shared office. The Company recognizes the revenues on a gross basis as the Company is acting as a principal in the rented offices and bears the full rental costs regardless whether the offices are sublet or not. The Company recognizes revenue when the shared space is sublet to these companies.

The following table sets forth a breakdown of our cost of revenues by type in absolute amounts and as a percentage of total cost of revenues for the periods indicated:

Cost of revenue mainly consists of cost for (i) personnel-related costs for our services and support personnel, (ii) cost for obtaining new customers, (iii) rental cost and utility costs for shared offices, and (iv) other cost directly linked to the revenue, such as internet charges, government surcharges for registration.

The following table sets forth of our gross profit and gross margin, for the periods indicated:

The following table sets forth a breakdown of our operating costs and expenses both in absolute amounts and as a percentage of total operating expenses for the periods indicated:

Sales and marketing expenses. Sales and marketing expenses consist primarily of labor costs for sales personnel, and other miscellaneous selling expenses.

General and administrative expenses. General and administrative expenses consist primarily of labor costs for management and administrative personnel, professional service fees, real estate expenses (such as rental cost, utility cost, and office improvements costs), and other miscellaneous administrative expenses.

Research and development expenses. Research and development expenses consist primarily of salaries and benefits of employees and related expenses for IT professionals involved in developing technology platforms, server and other equipment depreciation, bandwidth and data center costs, and rental fees. All research and development costs have been expensed as incurred as the costs qualifying for capitalization have been insignificant.

Other income (expense), net consist primarily of subsidy income (for business incubator service and for research & development), interest income and expenses, other income and expenses (such as VAT preference and donation expenditure), and loss on disposal of property, plants and equipment.

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains, or appreciation, and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties, which may be applicable on instruments executed in, or brought within the jurisdiction of, the Cayman Islands. In addition, the Cayman Islands does not impose withholding tax on dividend payments.

On March 21, 2018, the Hong Kong Legislative Council passed The Inland Revenue (Amendment) (No. 7) Bill 2017, which introduces the two-tiered profits tax rates regime. The bill was signed into law on March 28, 2018 and was gazetted on the following day. Under the two-tiered profits tax rates regime, the first HK$2 million of profits of the qualifying group entity will be taxed at 8.25%, and profits above HK$2 million will be taxed at 16.5%. The profits of group entities not qualifying for the two-tiered profits tax rates regime will continue to be taxed at a flat rate of 16.5%.

Accordingly, the Hong Kong profits tax of the qualifying group entity is calculated at 8.25% on the first HK$2 million of the estimated assessable profits and at 16.5% on the estimated assessable profits above HK$2 million.

EPWK HOLDINGS LIMITED was not subject to Hong Kong profit tax for any period presented as it did not have assessable profit during the periods presented.

Under the PRC Enterprise Income Tax Law effective from January 1, 2008, our PRC subsidiaries, are subject to the statutory rate of 25%, subject to preferential tax treatments available to qualified enterprises in certain encouraged sectors of the economy.

As of June 30, 2022 and 2021, the Company had net operating loss carryforwards of approximately US$16,580,483 and US$13,174,564, respectively, which arose from the Company’s subsidiaries, VIE and the VIE’s subsidiaries established in the PRC. As of June 30, 2022 and 2021, deferred tax assets from the net operating loss carryforwards amounted to nil and US$3,293,641, respectively, and the Company has provided a valuation allowance as it has concluded that it is more likely than not that these net operating losses would not be utilized in the next 5 years.

The following table sets forth a summary of our consolidated results of operations for the periods presented, both in absolute amounts and as percentages of our total revenues.

Our net revenues increased by 12.71% from US$11.4 million in 2021 to US$12.8 million in 2022, primarily because our online promotion revenue has increased by US$1.9 million or 30.53% from US$6.35 million in 2021 to US$8.29 million in 2022 due to the increase of the demand of online promotion service.

Our cost of revenues increased by 13.24% from US6.62 million in 2021 to US$7.50 million in 2022, primarily attribute to the other cost for value-added service has increased by US$1.78 million or 144.31%, and offset by around US$0.9 million decrease of rental cost.

Our gross profit keeps stable and increased by 11.97% from US$4.75 million in 2021 to US$3.23 million in 2022. Our gross profit margin was 41.48% in 2022 and 41.76% in 2021.

Sales and marketing expenses. Our sales and marketing expenses in total increased by US$1.63 million from US$2.68 million in 2021 to US$4.31 million in 2022, primarily because the marketing expenses for obtaining new customers increased US$1.6 million.

General and administrative expenses. Our general and administrative expenses remained relatively stable and only increased by 2.69% from US$2.77 million in 2021 to US$2.85 million in 2022.

Research and development expense. Our research and development expenses increased by US$1.77 million from US$0.24 million in 2021 to US$2.01 million in 2022, primarily due to the entrusted development cost for network system upgrade increased from nil in 2021 to US$1.49 million in 2022.

Total other income decreased by 71.47% or US$1.12 million from US$1.57 million in 2021 to US$0.45 million in 2022. Primarily due to the decrease of subsidy income in amount of US$0.6 million or 38.66% and loss of disposal of property and subsidiaries in amount of totally US$0.4 million.

Our income before income tax was US$0.63 million in 2021 and our loss before income tax was US$3.40 million in 2022.

As a result of the foregoing, our net income was US$0.62 million in 2021 and net loss US$3.41 million in 2022.

The following table sets forth a summary of our cash flows for the periods indicated:

To date, we have financed our operations and capital expenditures primarily through bank loans, and utilization of cash generated from operations in the period in which we generated cash flows from operations.

We had cash and cash equivalents and restricted cash of US$0.57 million and US$0.71 million as of June 30, 2021 and 2022, respectively.

As of June 30, 2022, all of our cash and cash equivalents were held in China and all were denominated in Renminbi. As of June 30, 2022, all of our cash and cash equivalents were held by the VIE and its subsidiaries.

Substantially all of our net revenues have been, and we expect will likely to continue to be, denominated in Renminbi. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior SAFE approval as long as certain routine procedural requirements are fulfilled. Therefore, our PRC subsidiaries are allowed to pay dividends in foreign currencies to us without prior SAFE approval by following certain routine procedural requirements. However, approval from or registration with competent government authorities is required where the Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future.

Net cash provided by operating activities primarily comprises our net profit, depreciation & amortization, contract liabilities, advance to suppliers, operating lease right of use assets and liabilities, etc.

For the year ended June 30, 2022, net cash used in operating activities was US$3.66 million, which was primarily attributed to the net loss of US$3.4 million.

For the year ended June 30, 2021, net cash provided by operating activities was US$ 1.15 million, which was primarily attributed to net profit US$0.62 million, depreciation & amortization US$1million, changes in contract liabilities US$-0.8 million, changes in advance to suppliers US$0.15 million.

The difference between the two years was the decrease of net cash in the amount of US$4.82 million, primarily due to net income has decreased US$4 million from net income of US$0.62 million in 2021 to net loss US$3.4 million in 2022.

For the year ended June 30,2022, net cash used in investing activities was US$432,736, which was attributed to US$386,871 used for purchase fix assets and leasehold improvements, US$61,962 used for acquisitions of method investees. Loss from disposals of subsidiaries was US$10,392 and proceeds from disposal of property and equipment was US$26,489.

For the year ended June 30, 2021, net cash used in investing activities was US$ 0.11 million, which was attributed to US$111,185 cash used for office improvements.

The net cash used in investing activities in the two years increased by the amount of US$326,686, or 308%, primarily due to the increased purchase of fixed assets and leasehold improvements in the amount of US$275,686.

For the year ended June 30, 2022, net cash provided by financing activities was US$4.26 million. Proceeds from related parties was US$2.37 million and proceeds from bank loans was US$1.89 million.

For the year ended June 30, 2021, net cash used in financing activities was US$1.87 million, which primarily comprised of US$2.33 million loan to the related parties, partial payment of advertising and other professional services, and US$0.45 million bank loan proceeds.

The difference between the two years is in the amount of US$6.1 million, and is primarily attributed to proceeds from related parties increased US$4.7 million and related party receivable are almost pay back.

We had various outstanding bank loans of approximately $2.27 million as of June 30, 2022, and $0.46 million as of June 30, 2021, respectively. We have also entered into non-cancellable operating lease agreements for several offices and operating facilities. The leases are expiring through 2029.

The following table sets forth our contractual obligations and commercial commitments as of June 30, 2022:

We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk, or credit support to us or engages in leasing, hedging, or product development services with us.

As of June 30, 2022, the Company had an accumulated deficit of $16,580,483. Losses have principally occurred as a result of the substantial expenses for professional fees as part of the Company’s capital market strategy which have been accounted for as general and administrative expenses. Additionally, the Company has invested in two areas: 1.) research and development of its technology platform, and 2.) personnel and resources to generate increased future revenues. Both of the expenditures have been accounted for as cost of sales. Our cash balance and revenues generated are not currently sufficient and cannot be projected to cover operating expenses and meet our obligations as they become due for the next twelve months. These factors raise substantial doubt about our ability to continue as a going concern.

Our management’s plan to alleviate the substantial doubt about our ability to continue as a going concern include: 1. take actions for business optimization, service category expansion and other measures to improve the revenue of our business process; 2. keep controlling and lowering various costs and; 3. expand financing channels and scale to increase operating capital.

Given that we will take measures as stated in the above management plan, the cash flows are sufficient to cover the costs of the loans from related parties and such financing would not impact on our ability to continue as a going concern.

We have identified certain accounting policies, judgments, and estimates that are significant to the preparation of our historical financial information in accordance with the U.S. GAAP. Our significant accounting policies, which are important for an understanding of our financial position and results of operations, are set forth in detail in Note 2 to the consolidated financial statements included elsewhere in this prospectus.

Some of our accounting policies require us to apply estimates and assumptions as well as complex judgments relating to accounting items. The estimates and assumptions that we use and the judgments that we make in applying our accounting policies have a significant impact on our financial position and results of operations. Actual results could differ from those estimates. Our management continually evaluates such estimates, assumptions, and judgments based on past experience and other factors, including industry practices and expectations of future events that we believe to be reasonable under the circumstances. There has not been any material deviation between our management’s estimates or assumptions and actual results, and we have not made any material changes to these estimates or assumptions for the year ended June 30, 2022 and 2021. We do not expect any material changes in these estimates and assumptions in the foreseeable future. Our critical accounting judgments and estimates that were used in the preparation of our historical financial information are set forth in Note 2 to the consolidated financial statements included elsewhere in this prospectus.

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The consolidated financial statements include the financial statements of the Company, its subsidiaries, its VIE and its VIE’s subsidiaries. All inter-company transactions and balances have been eliminated upon consolidation.

The preparation of financial statements in conformity with US GAAP requires to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period and accompanying notes, including allowance for doubtful accounts, net realizable value of inventories, the useful lives of property and equipment and intangible assets, impairment of long-lived assets (including goodwill), valuation allowance of deferred tax assets, valuation and recognition of share-based compensation expenses and fair value of assets and liabilities acquired in business combination. Actual results could differ from those estimates.

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

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

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

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

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

Based on the short-term nature of cash and cash equivalents, accounts receivable, advance to suppliers, amounts due from related parties and other current assets, accounts payable, advances from customers, accrued expenses and other current liabilities management has determined that the carrying value approximates their fair values.

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liability, and operating lease liability, non-current in the Company’s consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option, if any. As the Company’s leases do not provide an implicit rate, the Company used an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company has elected to adopt the following lease policies in conjunction with the adoption of ASU 2016-02: (i) for leases that have lease terms of 12 months or less and does not include a purchase option that is reasonably certain to exercise, the Company elected not to apply ASC 842 recognition requirements; and (ii) the Company elected to apply the package of practical expedients for existing arrangements entered into prior to January 1, 2019 to not reassess (a) whether an arrangement is or contains a lease, (b) the lease classification applied to existing leases, and(c) initial direct costs.

Prior to this offering, we have been a private company with limited accounting and financial reporting personnel and other resources to address our internal controls and procedures. In connection with the audits of our consolidated financial statements included in this prospectus, we and our independent registered public accounting firm identified two material weaknesses in our internal control over financial reporting. As defined in the standards established by the Public Company Accounting Oversight Board of the United States, a “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses identified are our (i) lack of sufficient accounting and financial reporting personnel with requisite knowledge and experience in application of U.S. GAAP and SEC rules and (ii) lack of financial reporting policies and procedures that are commensurate with U.S. GAAP and SEC reporting requirements.

We are in the process of implementing a number of measures to address these material weaknesses identified, including: (i) hiring additional accounting and financial reporting personnel with U.S. GAAP and SEC reporting experience, (ii) expanding the capabilities of existing accounting and financial reporting personnel through continuous training and education in the accounting and reporting requirements under U.S. GAAP, and SEC rules and regulations, (iii) developing, communicating and implementing an accounting policy manual for our accounting and financial reporting personnel for recurring transactions and period-end closing processes, and (iv) establishing controls to identify non-recurring and complex transactions to ensure the accuracy and completeness of our company’s consolidated financial statements and related disclosures.

The process of designing and implementing an effective financial reporting system is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a financial reporting system that is adequate to satisfy our reporting obligation. See “Risk Factors – Risks Relating to this Offering and Our Ordinary Shares – Our lack of effective internal controls over financial reporting may affect our ability to accurately report our financial results or prevent fraud which may affect the market for and price of our Ordinary Share.

EPWK Holdings Ltd. is a holding company with no material operations of its own. We conduct our operations through our PRC subsidiaries and EPWK VIE in China, and our revenues are derived from EPWK VIE and its subsidiaries. As a result, our ability to pay dividends depends significantly upon dividends paid by our PRC subsidiaries. If our existing PRC subsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, our wholly foreign-owned subsidiaries in China are permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under the PRC law, each of our subsidiaries and EPWK VIE in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, each of our wholly foreign-owned subsidiaries and EPWK VIE in China may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion funds and staff bonus and welfare funds at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by the SAFE. Our PRC subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds.

To date, inflation in China has not materially affected our results of operations. According to the PRC National Bureau of Statistics, the year-over-year percentage changes in the consumer price index for 2019, 2020, and 2021 were increases of 4.5%, 0.2%, and 0.9% respectively. Although we have not been materially affected by inflation in the past, we may be affected if China experiences higher rates of inflation in the future. For example, certain operating expenses, such as employee compensation and rental and related expenses for office may increase as a result of higher inflation. Additionally, high inflation could significantly reduce the value and purchasing power of these assets. We are not able to hedge our exposure to higher inflation in China.

We believe that the contractual arrangements with EPWK VIE and their respective shareholders are in compliance with PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could cause the relevant regulatory authorities to find the current contractual agreements and businesses to be in violation of any existing or future PRC laws or regulations. If we, EPWK WFOE or any of our current or future VIE are found in violation of any existing or future laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion in dealing with such violations, which may include, but not limited to, revocation of business and operating licenses, being required to discontinue or restrict its business operations, restriction of the our right to collect revenues, being required to restructure its operations, imposition of additional conditions or requirements with which we may not be able to comply, or other regulatory or enforcement actions against us that could be harmful to its business. The imposition of any of these or other penalties may result in a material and adverse effect on our ability to conduct its business. In addition, if the imposition of any of these penalties causes us to lose the rights to direct the activities of EPWK VIE or the right to receive their economic benefits, we would no longer be able to consolidate EPWK VIE.

In addition, if EPWK VIE or the nominee shareholders fail to perform their obligations under the contractual agreements, we may have to incur substantial costs and expend resources to enforce our rights under the contracts. We may have to rely on legal remedies under PRC laws, including seeking specific performance or injunctive relief and claiming damages, which may not be effective. All of the contractual agreements are governed by PRC laws and provide for the resolution of disputes through arbitration in the PRC. Accordingly, these contracts would be interpreted in accordance with PRC laws and any disputes would be resolved in accordance with PRC legal procedures. The legal system in PRC is not as developed as in other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements. Under PRC laws, rulings by arbitrators are final, parties cannot appeal the arbitration results in courts, and prevailing parties may only enforce the arbitration awards in PRC courts through arbitration award recognition proceedings, which would incur additional expenses and delay. In the event that we are unable to enforce the contractual agreements, we may not be able to exert effective control over the VIE through WFOE, and our ability to conduct its business may be negatively affected.

Certain financial instruments, which subject us to concentration of credit risk, consist of cash and restricted cash. We have cash balances at financial institutions located in PRC. Since March 31, 2015, balances at financial institutions and state-owned banks within the PRC are covered by insurance up to RMB500,000 (US$79,600) per bank. As of June 30, 2021 and 2022, we had deposits totaling US$451,646 and US$696,307 that were covered by such limited insurance, respectively. Any balance over US$79,600 per bank in PRC will not be covered. To date, we have not experienced any losses in such accounts.

For the years ended June 30, 2022 and 2021, no single customer represents 10% or more of the Company’s total revenue.

The Company’s accounts receivable was not material as of June 30,2021. The following table sets forth a summary of single customer who represent 10% or more of the Company's total accounts receivable as of June 30, 2022.

The following table sets forth a summary of single suppliers who represent 10% or more of the Company’s total purchases:

The following table sets forth a summary of single suppliers who represent 10% or more of the Company’s total advance to suppliers:

For the fiscal year ended June 30,2022, two suppliers accounted for 11% of our total purchases, one was for advertising service and the other was for rental cost. One supplier accounted for 31% of our total purchase for talent training service. One supplier accounted for 15% for electricity bill. Two suppliers accounted 11%, one was for software service and the other was for prepaid gasoline fee.

For the fiscal year ended June 30, 2021, one supplier accounted for 13% of our total purchases, which is the leasor of our offices. One supplier accounted for more than 51% of total accounts payable and one supplier accounted for more than 13%, for the property management and software development, respectively.

For the fiscal year ended June 30, 2022, no customer accounted for more than 10% of our total sales and three customers accounted more than 10% of total accounts receivable. For the fiscal year ended June 30, 2021, no customer accounted for more than 10% of our total sales or more than 10% of total accounts receivable.

A list of recently issued accounting pronouncements that are relevant to us is included in Note 2(x) of our consolidated financial statements included elsewhere in this prospectus.

The term crowdsourcing relates to the expansion of outsourcing activity. It can be defined as an internet enabled approach in which companies tap into the collective intelligence of individuals outside their organization to resolve technical problems. Accordingly, crowdsourcing is an online, distributed problem solving and production model.

Crowdsourcing works in the following way. A firm identifies a task or group of tasks that is currently being conducted in house. Rather than continue to perform this activity within the firm, the tasks are released to a crowd of outsiders (or Witkeys) who are invited to perform the task on the firm’s behalf for a stipulated fee. A member of the crowd then offers to undertake the task and a specific time allowance will be given for the task to be completed. When the task is done, the member will submit the task to the firm and the firm will then assess the quality of the work and if satisfied will make payment to the member.

There are a variety of specific methods that crowdsourcing processes can take, including creative production, broadcast search, knowledge management and distributed human intelligence tasking. While many methods of utilizing crowdsourcing are focused on microtasks, or small, repetitive tasks such as interpreting, handwriting or street signs, crowdsourcing presents a promising future in helping businesses think about solving some of their most complex problems.

The crowdsourcing platform provides individuals and firms with new ways of employment. Crowdsourcing platforms can be divided into two categories based on the types of services provided: comprehensive crowdsourcing platforms and vertical crowdsourcing platforms.

The comprehensive crowdsourcing platform is all-encompassing and can meet the needs of all users at one stop. In addition, there is generally a wide range of buyer resources and various types of skilled sellers available on the platform.

The vertical crowdsourcing platform focuses on specific industries and fields, and its ability to accumulate users is less effective than the comprehensive crowdsourcing platform. However, its focus and professionalism can provide consumer products that are more in line with specific groups of people, meet the specific needs of users in a certain field, and can easily provide refined services in vertical market segments.

Crowdsourcing platform serves as a link by providing task receiving and task publishing services for individuals and companies, respectively. Crowdsourcing platform generally obtains profit through value-added services such as seller-paid promotions (Task on Top), which increase the exposure of promoted tasks and services on the platform to attract buyers, and VIP stores that enjoy speedy buyer-seller matching, brand promotion and special store decorations. It may also benefit from the transaction process by charging commissions, which account for a not high proportion of revenue in most platforms. Different crowdsourcing platforms adopt different profit structures based on their business needs.

Some popular crowdsourcing tasks are operated by the platform. Among them, intellectual property services that are highly associated with the design task have formed a relatively large scale. Derivative services focus on the front end and back-end processes of the tasks required by companies and provide comprehensive solutions. For example, intellectual property services such as trademark registration and copyright application have been generated based on logo design tasks.

The crowdsourcing platform-based makerspace as a community is specifically developed for Witkey groups from the traditional makerspace, helps them quickly start or expand their crowdsourcing business under professional training and guidance provide by the crowdsourcing platform. In the community, Witkey can achieve rapid growth by ways such as sharing ideas and business experience. On the other hand, the crowdsourcing platform itself will benefit from the unique model through the development of more professional and experienced Witkey.

Crowdsourcing is an online method for realization of the sharing economy. Crowdsourcing platform is considered as an important approach to achieve shared economy.

Shared economy refers to the sum of economic activities that use modern information technologies such as Internet to integrate massive and decentralized resources in order to meet diversified societal needs, with the sharing of rights of use as its major feature. Measured in terms of total transaction value occurred in the form of shared economy, its overall scale has experienced growth, driven by the development of internet technologies and recognizable market demand. As a sum of these kind of economic activities, it has triggered shared economy transaction value to increase to USD542.6 billion in 2016. However, further being influenced by national adjustment of economy structure, the overall scale decreased to USD322.5 billion in 2017. In the following three years, shared economy scale has increased from USD455.8 billion in 2018 to USD559.7 billion in 2021, with an overall compound annual growth rate (“CAGR”) of 14.8%.

In the near future, affected by factors such as the positive influence of COVID-19 outbreak on adoption of diversified economy, industry regulation and integration, as well as further development of internet technologies and 5G technologies, the scale of share economy is anticipated to further boost up. The overall transaction value will be increase to USD646.0 billion in 2026, representing a CAGR of 3.3%.

Source: National Information Centre for Shared Economy Research, Frost & Sullivan

In the market scale of shared economy market, life services, production capacity and knowledge and skills are the most commonly applied sub-sectors. Shared economy can be achieved through services provided online or offline, and crowdsourcing platform is categorized as an online approach to achieve shared economy.

The overall employment situation is stable, which is benefited from the development of the sharing economy to provide many flexible jobs as well as residents’ increasing engagement in new forms of employment. It has been further broadening employment channels and enhancing employment flexibility. The number of sharing economy participants in China will be about 830 million in 2021, and the employed personnel on shared economy platform will reach 6.5 million.

Source: National Information Centre for Shared Economy Research, Frost & Sullivan

Based upon the market segmentation of China’s shared economy, the three major categories that has contributed greatly are life service, production capacity, and knowledge and skills with a proportion of 46.4%, 33.5% and 12.3%, respectively. As such, the scale for each of these sub-segments of shared economy are USD1,711.8 billion, USD1,236.8 billion and USD454.0 billion, respectively. Among all three major segment, knowledge and skills sector has experienced noticeable growth and is anticipated as with great growth potential due to the significant market demand.

Source: National Information Centre for Shared Economy Research, Frost & Sullivan

Knowledge and skills have served as one of the maturely developed sectors of online crowdsourcing platforms, and its market size in 2021 has reached to USD70.4 billion. As a major sub-sector in shared economy industry, the segment of knowledge and skills has experienced rapid growth in the past five years, primarily based upon the growing market demand toward transferring of knowledge and skills in the form of shared societal resources. As a result, the scale of knowledge and skill sector, measured in total transaction value occurred, has increased from USD21.4 billion in 2017 to USD70.4 billion in 2021, representing a CAGR of 34.6%. In 2021, the number of newly registered market entities nationwide was 28.9 million with an annual increase of 15.4%.

Since the drastic growth in the past five years is contributed by the rapid development of shared economy model in 2017. Driven by the same factor, however, as the scale of development for knowledge and skill sector will gradually reaching its mature level, it is anticipated that the sector growth speed will slow down to a CAGR of 6.1% from 2022 to 2026, and eventually reaching USD105.8 billion in 2026.

At present, the penetration rate of the online crowdsourcing market is relatively low, and the market is mainly concentrated in specific fields such as creative design and software development. The market size of China’s crowdsourcing platform market focusing on creative design and software development only, in terms of GMV reached USD 2.4 billion in 2021.

Currently, the number of entrepreneurs in China is growing exponentially. According to Chinese State Administration for Market Regulation, China's registered market entities totaled 161 million at the end of June, up 4.4 percent from 2021. Among all the entities, 50.39 million are businesses and 107.94 million are self-employed individuals. These self-employed individuals and SMEs usually have a lot of needs in design, development, copywriting, marketing, writing, and corporate services. With limited funds and more restrictions in terms of cost, they tend to find solutions to meet their needs through crowdsourcing platforms. In 2021, the number of newly registered market entities nationwide was 28.9 million with an annual increase of 15.4%. Entrepreneurs, many of them are people with creative design, software development and other related skills, are in urgent need to acquire and expand business in a short time and are more willing to explore their market opportunities through crowdsourcing platform for its industry-focusing and accurate customer resources.

With the gradual control of the epidemic, the fast growing market entities and the rapid development of the sharing economy, the market size of crowdsourcing platform market regarding creative design and software development only is expected to return to the track of rapid growth, increasing from USD 2.9 billion in 2022 to USD 22.5 billion in 2026 at a CAGR of 66.9%.

According to Frost & Sullivan, the development trends of the crowdsourcing platform market in China are:

Supportive Policy Environment. The government's policy support on the digital economy, flexible employment, and entrepreneurship and innovation facilitates the growth of the crowdsourcing industry in China. In the 2010s, China’s State Council introduced the concepts of “Mass Entrepreneurship and Innovation” and “ Internet+”. Based on these two concepts, the government proposed to accelerate the development of crowdsourcing. In recent years, the government has emphasized the importance of crowdsourcing in facilitating digitization of industry, and relevant policies have also encouraged development of digital flexible employment.

Technology Development. The development of technology provides the foundation for the creation and evolution of crowdsourcing platforms. The Internet driven sharing economy and platform economy have driven the first wave of crowdsourcing. In the first wave of crowdsourcing platforms, companies like Zhubajie and EPWK were born in the Chinese market. The new technologies, such as 5G, IoT and cloud computing, will drive the crowdsourcing industry into the 2.0 era.

Job Search Difficulties Generating New Market Opportunities. Job search difficulties expand the size of the supply side of crowdsourcing services, which drives the development of crowdsourcing. The total number of university graduates in 2021 has reached more than 9.09 million, with an increase of 350 thousand year on year. In the context of COVID-19, the future of the job market will face more challenges, which potentially promotes the development of China’s crowdsourcing platform market. Besides, due to the global economic downturn, layoffs in some companies have also increased the size of the unemployed population. Thus, there will be more graduates seek for job or start their own start-up business through crowdsourcing platforms.

Downstream Demand. The development of downstream companies in the supply chain increases the need for crowdsourcing platforms. Firstly, the demand for crowdsourcing platforms comes from the pain points of enterprise employment: high rigid labor costs, relatively high employment risks, heavy social insurance and personal tax burdens, and high staff management costs. Secondly, talent shortage after the epidemic and the development of China’s “Industrial Internet” increases companies demand for labor. In addition, the Chinese people's concept of work and life has undergone great changes, which also provides the possibility for the expansion of the crowdsourcing market. In the future, companies in China may have more demands for crowdsourcing.

Development Trends of China Crowdsourcing Platform Market as Identified by Frost & Sullivan

According to Frost & Sullivan, the development trends of China crowdsourcing platform market are:

Better Development of Comprehensive Platforms. As crowdsourcing tasks become more diversified and complicated, the business scope of crowdsourcing platforms will correspondingly become more extensive. Compared with other types of crowdsourcing platforms, comprehensive crowdsourcing platforms will accumulate more obvious advantages with attracting more participants.

More Professional Participants. Participants in sharing have become more and more professional as more highly educated talents participate in crowdsourcing. On the other hand, the increasing number of participants switching from part-time to full-time will further promote the professionalization of the crowdsourcing platform. It is also a tendency that Witkeys start to serve as a group or even set up a partnership company in the platform.

Greater Acceptance of Online Crowdsourcing. In China, with the gradual acceleration of the development of crowdsourcing, the recognition of crowdsourcing by enterprises continues to rise. In addition to small and medium-sized enterprises, some large enterprises have also begun to choose to complete some projects through crowdsourcing.

With the support of government policies and the increasing needs of enterprises, the crowdsourcing platform market in China has significant room for development. According to Frost & Sullivan, in the first half of 2022, the four largest market players in this industry accounted for 54.6% of market share in terms of GMV, and EPWK VIE ranked No. 2 with a market share of 17.7%.

Our mission is to add value to our users in both service supply and demand sides. We create an innovative and efficient cloud sourcing platform to connect businesses with great talents.

We operate the second largest online marketplace according to the F&S report as measured by GMV to enable businesses (buyers) and service providers (sellers) to find each other. During the past three years from 2019 to 2021, on our marketplace platform, we enabled US$ 804 million of gross merchandise volume, or GMV. In 2019, we enabled US$210 million of GMV across 600,000 projects. In 2020, we enabled US$ 254 million of GMV across 0.7 million projects. In 2021, we enabled US$340 million of GMV across 0.9 million projects.

Our marketplace platform www.epwk.com was launched in 2011 and we have achieved significant growth ever since our inception. Our platform users are both buyers who seek talents for their jobs and sellers who offer different talents and skills. We currently have over 23 million registered users and offer an expansive catalog to provide diversified services to businesses of all sizes. Our average annual active users, or AAU is 10.13 million. Our GMV increased by 33.5% from US$ 254 million in 2020 to US$ 340 million in 2021.

Great potential in the shared economy. According to the Report on the Development of Sharing Economy in China (2021) published by the State Information Center, the scale of China's shared economy market was estimated at US$ 498 billion (RMB 3,377.3 billion) in 2020, representing an annual growth rate of approximately 2.9%. Based upon the market segmentation of China’s shared economy, the three major categories that has contributed greatly to the growth are life services, production capacity, and knowledge and skills with a proportion of 47.9%, 32.1% and 11.9%, respectively. As such, the scale for each of these sub segments of shared economy are US$ 234 billion (RMB 1,617.5 billion), US$ 157 billion (RMB 1,084.8 billion) and US$ 58 billion (RMB 401 billion), respectively. Among all three major segment, knowledge and skills sector has experienced noticeable growth and is anticipated as with great growth potential due to the significant market demand.

Increasing demand for crowdsourcing platform services by a growing number of SMEs. In recent years, the number of small, medium and micro enterprises (SMEs) in China has grown rapidly. SMEs usually have a lot of needs in design, development, copywriting, marketing, writing, corporate services, etc. As SMEs have limited funds and are subject to more restrictions in terms of cost, they tend to find solutions to meet their needs through crowdsourcing platforms. Therefore, the market size of China’s crowdsourcing platform market has continued to grow and reached US$ 222 million (RMB 1,531.4 million) in 2019. However, as the industry was negatively affected by COVID-19 in 2020 its market size dropped US$ 165 million (RMB 1,136.1 million). As the epidemic is gradually under control, the market size is expected to return to the track of rapid growth, increasing from US$ 242 million (RMB 1,563.5 million) in 2021 to US$ 656 million (RMB 4,233.6 million) in 2025 at a CAGR of 28.3%.

We connect buyers who seek talents for their jobs and sellers who offer different talents and skills in an efficient and seamless manner through our website www.epwk.com, which together with our mobile apps and WeChat mini programs create a vibrant network. We are focused on enhancing user experience by delivering efficient, trustworthy and convenient experience to users in searching for and contracting with each other.

Our buyers include mini, small, and medium sized businesses from various industries. The sizes of the buyers go from small shop to companies with approximately US$ 23 million (RMB 150 million) revenue. As of December 31, 2021, our service covers more than 2,800 cities and counties with approximately 7.67 million active buyers.

Our sellers range from student artists and professional designers, part-time freelancers, to mini, small and medium sized businesses with different talents, skills and services to offer. As of December 31, 2021, we had 15.33 million sellers on our platform.

As shown in the image above, a seller who wishes to post services and products on the platform must apply to open an online store in addition to accepting all the required platform agreements. The platform will review the seller’s application to ensure the applicant and the proposed online store satisfy all the legal and compliance requirements. Once the application is approved, a seller has the option to upgrade the online store to one of the VIP stores. Unlike the free online store with limited exposure to buyers and is subject to platform commission when providing services and products, the VIP store enjoys various exclusive privileges that result in more exposure on the platform and does not need to pay commission to the platform.

We operate the second largest online marketplace in China according to the F&S report that enables buyers to find and work with highly-skilled sellers as measured by GMV. Today

Cayman Islands		7389		N/A
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

Fang Liu, Esq.		Michael Blankenship
VCL Law LLP		Winston & Strawn LLP
1945 Old Gallows Road, Suite 630		800 Capitol Street, Suite 2400
Vienna, VA 22182		Houston, TX 77002
(703) 919-7285		(713) 651-2600

	Per Share	Total (2)
Public offering price	$	$
Underwriting discount (1)	$	$
Proceeds to us, before expenses	$	$

PROSPECTUS SUMMARY	1
THE OFFERING	26
SUMMARY FINANCIAL DATA	27
RISK FACTORS	28
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS	65
ENFORCEABILITY OF CIVIL LIABILITIES	66
USE OF PROCEEDS	68
DIVIDEND POLICY	69
CAPITALIZATION	70
DILUTION	71
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS	77
INDUSTRY	98
BUSINESS	105
REGULATIONS	125
MANAGEMENT	134
PRINCIPAL SHAREHOLDERS	139
RELATED PARTY TRANSACTIONS	140
DESCRIPTION OF SHARE CAPITAL	142
SHARES ELIGIBLE FOR FUTURE SALE	161
TAXATION	163
UNDERWRITING	170
LEGAL MATTERS	179
EXPERTS	179
INTERESTS OF NAMED EXPERTS AND COUNSEL	179
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION	179
WHERE YOU CAN FIND ADDITIONAL INFORMATION	179
FINANCIAL STATEMENTS	F-1

	As of June 30,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	713,649	$	572,788
User funds		277,673		2,053,185
Accounts receivable, net		482,746		2,195
Related parties receivable		12,160		2,983,960
Advance to suppliers		14,284		25,078
Prepaid expenses and other receivables, net		73,627		550,716
		1,574,139		6,187,922

Equity investments		59,710		-
Property and equipment, net		1,196,808		2,101,196
Right-of-use assets		4,343,324		13,022,583
Intangible assets, net		262,819		373,810
Other non-current assets		170,071		416,374
		6,032,732		15,913,963
TOTAL ASSETS OF VIE	$	7,606,871	$	22,101,885

Liabilities
Current liabilities:
Short term bank loans		1,632,951		-
Accounts payable		495,095		152,712
Contract liabilities – current		3,201,247		4,238,839
User accounts payable		277,673		2,053,185
Related parties payable		89,788		693,810
Accrued expenses and other current liabilities		1,155,030		1,090,361
Lease payable-current portion		836,425		1,731,292
		7,688,209		9,960,199

Long term bank loans		640,314		464,763
Contract liabilities – non-current		379,171		345,513
Lease payable-non-current		4,044,834		13,183,686
Other non-current liabilities		247,712		338,827
		5,312,031		14,332,789
TOTAL LIABILITIES OF VIE	$	13,000,240	$	24,292,988

	●	“Representative” is to Revere Securities LLC as the representative of the underwriters;
	●	“F&S” or “Frost & Sullivan” are to Frost & Sullivan Inc.;
	●	“Gross Merchandise Volume (GMV)” refers to the total amount of transactions we make over a specified period of time through our platform, which includes any fees or other deductions we may calculate separately; GMV is not our revenue and is not included in the statement of operations;

	●	“Mini Programs” refer to various sub-applications incorporated into popular mobile applications in China like WeChat and Alipay that do not require separate installations and are ready to use at any time;
	●	“Proprietary Data” is the data we created after analyzing the nature and type of the seller-posted services or products;
	●	“Users” or “Registered users” are buyers and sellers who have registered their accounts on our platform using phone numbers or third-party applications, including WeChat, Weibo or Tencent QQ;

	●	“Paid Members” are users who have subscribed to our self-operated services and tools, including design, software development, marketing, business writing, interior decoration, life service, intellectual properties registration and management services;
	●	“Active Registered Users” or “Active Users” are users who access our platform through our desktop client, mobile application, or WeChat mini program at least once during a specific period; and
	●	“Daily Inquiries” are inquiries made by users each day regarding the services and products offered on our platform.

	For the years ended
	June 30,
	2022			2021
Revenue	$	12,811,143		$	11,366,317
Net income	$	(3,405,919	)	$	623,836
Net cash provided by/(used in) operating activities	$	(3,664,165	)	$	1,152,690
Net cash used in investing activities	$	(432,736	)	$	(106,050	)
Net cash provided by/(used in) financing activities	$	4,264,739		$	(1,874,322	)

	For the Year ended June 30,2022
	Parent			Other Non-VIE Subsidiaries			WFOE			VIE and Subsidiaries			Eliminations		Consolidated Total

Revenues	$			$			$	(3,405,919	)	$	12,811,143		$		$	12,811,143
Income (loss) for equity method investment	$	(3,405,919	)	$	(3,405,919	)	$			$			$	6,811,838	$
Net income (loss)	$	(3,405,919	)	$	(3,405,919	)	$	(3,405,919	)	$	(3,405,919	)	$	10,217,757	$	(3,405,919	)
Comprehensive income (loss)	$	(3,405,919	)	$	(3,405,919	)	$	(3,202,266	)	$	(3,202,266	)	$	9,606,798	$	(3,202,266	)

	For the Year Ended June 30, 2021
	Parent		Other Non- VIE Subsidiaries		WFOE		VIE and Subsidiaries		Eliminations			Consolidated Total

Revenues	$		$		$	623,836	$	11,366,317	$	(209,498	)	$	11,366,317
Income (loss) for equity method investment	$	623,836	$	623,836	$		$		$	(1,247,672	)	$
Net income (loss)	$	623,836	$	623,836	$	623,836	$	623,836	$	(1,871,508	)	$	623,836
Comprehensive income (loss)	$	394,220	$	394,220	$	394,220	$	394,220	$	(1,182,660	)	$	394,220

	As of June 30,2022
	Parent	Other Non- VIE Subsidiaries	WFOE		VIE and Subsidiaries			Eliminations	Consolidated Total
Cash and cash equivalents	$	$	$	-	$	713,649		$	$	713,649
Total current assets	$	$	$	-	$	1,574,139		$	$	1,574,139
Investments in subsidiaries and VIEs	$	$	$	-	$			$	$
Total non-current assets	$	$	$	-	$	6,032,731		$	$	6,032,731
Total Assets	$	$	$	-	$	7,606,871		$	$	7,606,871
Total Liabilities	$	$	$	-	$	13,000,240		$	$	13,000,240
Total Shareholders’ Equity	$	$	$	-	$	(5,393,369	)	$	$	(5,393,369	)
Total Liabilities and Shareholders’ Equity	$	$	$	-	$	7,606,871		$	$	7,606,871

	As of June 30,2021
	Parent		Other Non- VIE Subsidiaries		WFOE		VIE and Subsidiaries			Eliminations		Consolidated Total
Cash and cash equivalents	$	-	$	-	$	-	$	572,788		$	-	$	572,788
Total current assets	$		$		$	-	$	6,187,922		$		$	6,187,922
Investments in subsidiaries and VIEs	$		$		$	-	$			$		$
Total non-current assets	$		$		$	-	$	15,913,963		$		$	15,913,963
Total Assets	$		$		$	-	$	22,101,885		$		$	22,101,885
Total Liabilities	$		$		$	-	$	24,292,988		$		$	24,494,988
Total Shareholders’ Equity	$		$		$	-	$	(2,191,103	)	$		$	(2,191,103	)
Total Liabilities and Shareholders’ Equity	$		$		$	-	$	22,101,885		$		$	22,101,885

	For the Year Ended June 30, 2022
	Parent	Other Non- VIE Subsidiaries	WFOE	VIE and Subsidiaries			Eliminations	Consolidated Total
Net cash provided by (used in) operating activities	$	$	$	$	(3,664,166	)	$	$	(3,664,166	)
Net cash used in investing activities	$	$	$	$	(432,736	)	$	$	(432,736	)
Net cash provided by (used in) financing activities	$	$	$	$	4,264,739		$	$	4,264,739

Class A Ordinary Shares offered by us		[ ] Class A Ordinary Shares (excluding the over-allotment discussed below).

Price per Ordinary Share		The purchase price will be $[ ] per Ordinary Share.

Voting Rights		Class A Ordinary Shares are entitled to one (1) vote per share. Class B Ordinary Shares are entitled to fifteen (15) votes per share. Class A and Class B shareholders will vote together as a single class, unless otherwise required by law or our amended and restated memorandum and articles of association. Our CEO, Mr. Guohua Huang, is the sole holder of our Class B Ordinary Shares and will hold [ ]% to [ ]% of the total votes, depending on whether the Underwriter exercises its over-allotment option or not, for our issued and outstanding share capital following the completion of this offering and will have the ability to control the outcome of matters submitted to our shareholders for approval, including the election of our directors and the approval of change in control transactions, with the exception of any special resolutions, as such term is defined in the amended and restated memorandum and articles of association of the Company, that are required to be passed by a majority of not less than two-thirds of shareholders who are eligible to vote. See the sections titled “Principal Shareholders” and “Description of Share Capital” for additional information.

Over-allotment		We agree to grant the underwriters an option for a period of 30 days after the closing of this offering to purchase up to 15% of the total number of our Class A Ordinary Shares to be offered by us pursuant to this offering (excluding shares subject to this option), solely for the purpose of covering overallotments, at the initial public offering price less the underwriting discount. We may issue up to [ ] Class A Ordinary Shares pursuant to underwriters’ over-allotment option.

Class A Ordinary Shares outstanding prior to completion of this offering		15,601,494 Class A Ordinary Shares

Class A Ordinary Shares outstanding immediately after this offering		[ ] Class A Ordinary Shares, assuming no exercise of the underwriters’ over-allotment option.

Listing		We have applied to list our Class A Ordinary Shares on the Nasdaq Capital Market under the symbol “EPWK”.

Nasdaq Capital Market symbol		We have reserved the symbol “EPWK”

Transfer Agent		Transhare Corporation

Use of proceeds		We intend to use the proceeds from this offering for business development and marketing, research and development, exploration of new product and service offerings and general corporate purposes and working capital. Our management, however, will have significant flexibility and discretion to apply the net proceeds of this offering. To the extent that we are unable to raise the proceeds in this offering, we may not be able to achieve all of our business objectives in a timely manner. See “Use of Proceeds” for more information.

Risk factors		The Class A Ordinary Shares offered hereby involve a high degree of risk. You should read “Risk Factors,” beginning on page 28 for a discussion of factors to consider before deciding to invest in our Class A Ordinary Shares.

Lock-Up		We, our directors and executive officers, and our existing beneficial owners of 5% or more of our outstanding Class A Ordinary Shares have agreed with the underwriters, subject to certain exceptions, not to sell, transfer or otherwise dispose of any Class A Ordinary Shares or similar securities for a period ending 180 days after the commencement of the trading of the Class A Ordinary Shares. See “Underwriting” for more information.

	Years Ended
	June 30,
Consolidated Statement of Operations Data	2022			2021

Revenues		12,811,143			11,366,317
Cost of revenues		7,496,464			6,619,723
Total operating expenses		9,164,402			5,695,039
Total other income		449,346			1,574,748
Income tax expense		5,542			2,467
Net income	$	(3,405,919	)	$	623,836
Earnings per ordinary share
– Basic and diluted	$	(0.53	)	$	0.10

Weighted average number of Class A Ordinary Shares outstanding
– Basic and diluted		6,385,814			6,385,814

	As of June 30,
Consolidated Balance Sheet Data	2022			2021

Cash and cash equivalents	$	713,649		$	572,788
Total Assets	$	7,606,871		$	22,101,185
Total Liabilities	$	13,000,240		$	24,292,988
Total Shareholders’ Equity	$	(5,393,369	)	$	(2,191,103	)
Total Liabilities and Shareholders’ Equity	$	7,606,871		$	22,101,885

	Without Over Allotment As of June 30, 2022
	Actual (Audited)			As Adjusted for the Subsequent Issuance of New Shares (Unaudited)			Pro Forma As Further Adjusted
	US$			US$			US$
Shareholders’ Equity
Ordinary shares, $0.0001 par value: 6,385,814 shares authorized; 6,385,814 shares issued and outstanding; 19,157,442 shares issued and outstanding as adjusted and [ ] shares issued and outstanding pro forma as further adjusted	$	638		$	1,916
Additional paid-in capital		11,148,844			11,148,844
Statutory reserves		-			-
Accumulated deficit		(16,580,483	)		(16,580,483	)
Accumulated other comprehensive income		37,632			37,632
Total shareholders’ equity		(5,393,369	)		(5,392,091	)
Noncontrolling interest		-			-
Total equity	$	(5,393,369	)	$	(5,392,091	)

Total capitalization	$	(5,393,369	)	$	(5,392,091	)

	Post-Offering⁽¹⁾	Full Exercise of Over-allotment Option
Initial public offering price per Ordinary Share	US$	US$
Net tangible book value per Ordinary Share as of June 30, 2022	US$	US$
Increase in pro forma as adjusted net tangible book value per ordinary share attributable to new investors purchasing Class A Ordinary Shares in this offering	US$	US$
Pro forma as adjusted net tangible book value per Ordinary Share attributable to payments by new investors	US$	US$
Amount of dilution in net tangible book value per Ordinary Share to new investors in the offering	US$	US$

	As of June 30,
	2022		2021
Current assets	$	1,574,139	$	6,187,922
Total non-current assets	$	6,032,732	$	15,913,963
Total assets	$	7,606,871	$	22,101,885
Total liabilities	$	13,000,240	$	24,292,988

	For the years ended
	June 30,
	2022			2021
Total net revenue	$	12,811,143		$	11,366,317
Net loss/(profit)	$	(3,405,919	)	$	623,836

	For the years ended June 30,
	2022			2021
Net cash provided by/(used in) operating activities	$	(3,664,165	)	$	1,152,690
Net cash provided by/(used in) investing activities	$	(432,736	)	$	(106,050	)
Net cash provided by/(used in) financing activities	$	4,264,739		$	(1,874,322	)

	For the years ended June 30
	2022		%			2021
Online Promotion revenue	$	8,287,570		64.7	%	$	6,349,510	55.9	%
Value-Added Services revenue		2,473,971		19.3	%		2,875,697	25.3	%
Shared office rental and management revenue		2,049,602		16	%		2,141,110	18.8	%
Total	$	12,811,143		100	%	$	11,366,317	100	%

	For the years ended June 30,
	2022		2021
Current income tax expenses		5,542		2,467
Deferred income tax benefit		-		-
Total income tax expense	$	5,542	$	2,467

			Payment Due by Period
	Total		Less than 1 Year		2 – 3 Years		4 – 5 Years		More than 5 Years
Operating lease arrangements	$	5,616,332	$	1,046,106	$	1,851,783	$	1,475,180	$	1,243,263
Bank loans	$	2,273,265	$	1,632,951	$	640,314		-		-
Total	$	7,889,597	$	2,679,057	$	2,492,097	$	1,475,180	$	1,243,263