<SEC-DOCUMENT>0001213900-20-044409.txt : 20201223
<SEC-HEADER>0001213900-20-044409.hdr.sgml : 20201223
<ACCEPTANCE-DATETIME>20201223172334
ACCESSION NUMBER:		0001213900-20-044409
CONFORMED SUBMISSION TYPE:	F-4/A
PUBLIC DOCUMENT COUNT:		14
FILED AS OF DATE:		20201223
DATE AS OF CHANGE:		20201223

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Lianluo Smart Ltd
		CENTRAL INDEX KEY:			0001474627
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-RETAIL STORES, NEC [5990]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			D8

	FILING VALUES:
		FORM TYPE:		F-4/A
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-249660
		FILM NUMBER:		201413607

	BUSINESS ADDRESS:	
		STREET 1:		RM 2108, 21ST FL, NO. 20 SHIJINGSHAN RD
		STREET 2:		CHINA RAILWAY CONSTRUCTION BUILDING
		CITY:			SHIJINGSHAN DISTRICT, BEIJING
		STATE:			F4
		ZIP:			100040
		BUSINESS PHONE:		(8610)8860-9850

	MAIL ADDRESS:	
		STREET 1:		RM 2108, 21ST FL, NO. 20 SHIJINGSHAN RD
		STREET 2:		CHINA RAILWAY CONSTRUCTION BUILDING
		CITY:			SHIJINGSHAN DISTRICT, BEIJING
		STATE:			F4
		ZIP:			100040

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Dehaier Medical Systems Ltd
		DATE OF NAME CHANGE:	20091015
</SEC-HEADER>
<DOCUMENT>
<TYPE>F-4/A
<SEQUENCE>1
<FILENAME>ea132004-f4a2_lianluosmart.htm
<DESCRIPTION>AMENDMENT NO. 2 TO FORM F-4
<TEXT>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <B>As filed with the Securities and
Exchange Commission on December 23, 2020</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"> <B>Registration No. 333-249660</B> <B>
</B></P>

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<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNITED STATES </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>WASHINGTON, D.C. 20549</B></P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 6pt; text-align: center"> <B>Amendment No. 2 to</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-size: 12pt"><B>FORM F-4<BR>
</B></FONT><B><FONT STYLE="font-size: 10pt">REGISTRATION STATEMENT UNDER<BR>
THE SECURITIES ACT OF 1933</FONT></B></P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt"><B>&nbsp;</B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 100%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-size: 12pt"><B>LIANLUO
    SMART LIMITED</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt">(Exact
    name of registrant as specified in its charter)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt"><B>&nbsp;</B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 100%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Not
    Applicable</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt">(Translation
    of registrant name into English)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt"><B>&nbsp;</B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 32%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>British
    Virgin Islands</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 32%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>3841</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 32%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Not
    Applicable</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">(State or other jurisdiction
    of <BR>
    incorporation or organization)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">(Primary Standard
    Industrial <BR>
    Classification Code Number)</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">(I.R.S. Employer<BR>
    Identification Number)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt"><B>&nbsp;</B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 100%; padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Room
                                         611, 6th Floor, BeiKong Technology Building</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>No. 10 Baifuquan Road, Changping
        District</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Beijing 102200,&nbsp;People&rsquo;s
        Republic of China</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>+ 86-10-89788107</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">(Address, including
    zip code, and telephone number, including area code, of registrant&rsquo;s principal executive offices)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 100%; padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Cogency
                                         Global Inc.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>122 East 42nd&nbsp;Street, 18th&nbsp;Floor</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>New York, NY 10158</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>800-221-0102</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center"><FONT STYLE="font-size: 10pt">(Name,
    address, including zip code, and telephone number, including area code, of agent for service)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><I>Copies to: </I></B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 7pt"><B>&nbsp;</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Kevin Sun, Esq.<BR>
        BEVILACQUA PLLC<BR>
        1050 Connecticut Avenue, NW, Suite&nbsp;500 </B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Washington, DC 20036 </B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 8pt"><B>202-869-0888</B></FONT></P></TD></TR>
</TABLE>
<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Approximate date of commencement of proposed
sale to the public:</B> As soon as practicable after the effective date of this registration statement and upon completion of
the merger described in the accompanying proxy statement/prospectus.</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) 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. &#9744;</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">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. &#9744;</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">If applicable, place an X in the box to designate
the appropriate rule provision relied upon in conducting this transaction:</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-align: left">Exchange Act Rule 13e-4(i) (Cross-Border
Issuer Tender Offer)&nbsp;&#9744;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.3pt; text-align: left">Exchange Act Rule 14d-l(d) (Cross-Border
Third-Party Tender Offer)&nbsp;&nbsp;&#9744;</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right; margin-top: 0pt; margin-bottom: 0pt">Emerging growth company
&#9744;</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">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 comply with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of
Securities Act. &#9744;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22.5pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CALCULATION OF REGISTRATION FEE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid"> <B>Title of each class of securities
    to be registered</B> </TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> <FONT STYLE="font-size: 10pt"><B>Amount
    to be registered<SUP>(1)</SUP></B></FONT> </TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> Proposed maximum offering
    price per unit </TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> <FONT STYLE="font-size: 10pt"><B>Proposed
    <BR> maximum <BR> aggregate <BR> offering <BR> price<SUP>(2)</SUP></B></FONT> </TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> Amount
    of registration fee<SUP>(3)</SUP> </TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; width: 52%; font-size: 10pt"> Common Shares, par value $0.021848 per share </TD>
    <TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD>
    <TD STYLE="width: 9%; font-size: 10pt; text-align: right"> 440,890,986 </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 11%; font-size: 10pt; text-align: center; padding-left: 5.4pt"> N/A </TD>
    <TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> $ </TD>
    <TD STYLE="width: 9%; font-size: 10pt; text-align: right"> 25,157.69 </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> $ </TD>
    <TD STYLE="width: 9%; font-size: 10pt; text-align: right"> 2.74 </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(1)</TD><TD STYLE="text-align: left">Represents the estimated maximum number of common shares of the Registrant expected to be issued
in connection with the transactions contemplated by the&nbsp;agreement and plan of merger (the &ldquo;merger agreement&rdquo;)
by and among the Registrant, Newegg Inc. (&ldquo;Newegg&rdquo;) and Lightning Delaware Sub, Inc., as described herein, calculated
as the product of (a) the sum of (i)&nbsp;849,159&nbsp;shares of Newegg Class A common stock, par value $0.001 per share, issued
and outstanding as of October 23, 2020, (ii) 24,870,027 shares of Newegg Series AA preferred stock, par value $0.001 per share,
issued and outstanding as of October 23, 2020, (iii) 36,475,987 shares of Newegg Series A preferred stock, par value $0.001 per
share, issued and outstanding as of October 23, 2020, (iv)&nbsp;11,478,248 shares of Newegg Class A common stock subject to outstanding
stock options and restricted stock awards outstanding as of October 23, 2020, and (v) 1,799,641 shares of Newegg Class A common
stock available for issuance under Newegg&rsquo;s equity plans as of October 23, 2020, and (b)&nbsp;5.8417, the exchange ratio
specified in the&nbsp;merger agreement, as described herein. Pursuant to Rule&nbsp;416(a) under the Securities Act of 1933, as
amended (the &ldquo;Securities Act&rdquo;), there are also being registered an indeterminable number of additional securities as
may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions prior to the completion
of the&nbsp;merger&nbsp;transaction described herein.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">(2)</TD><TD STYLE="text-align: left">Estimated solely for purposes of calculation of the registration fee in accordance with Rule 457(f)
of the Securities Act. Newegg is a private company and no market exists for its equity securities. Newegg has accumulated a capital
deficit; therefore, pursuant to Rule 457(f)(2) under the Securities Act, the proposed maximum offering price is one-third of the
aggregate par value of Newegg&rsquo;s capital stock being acquired in the proposed merger, which is calculated by taking one-third
of the product of the par value of $0.001 and the maximum number of shares of Newegg capital stock that may be exchanged in the
merger, or 75,473,062&nbsp;shares of Newegg capital stock (computed as of October 23, 2020, the latest practicable date prior to
the date of filing this registration statement, and inclusive of all shares of Newegg capital stock issuable upon conversion of
any securities convertible into or exercisable for shares of Newegg capital stock).</TD></TR>                                                                                                                                                                                                                                                                                       <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
<TD> &nbsp; </TD><TD> (3) </TD><TD STYLE="text-align: left"> Previously paid. </TD></TR>
</TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>The registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment
which specifically states that this registration statement shall thereafter become effective in accordance with Section&nbsp;8(a)
of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting
pursuant to such Section&nbsp;8(a), may determine.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="color: Red; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="color: Red"><B>Information
contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with
the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the
registration statement becomes effective. This proxy statement/prospectus shall not constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="color: Red; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: Red"><B>PRELIMINARY&mdash;SUBJECT
TO COMPLETION&mdash;DATED DECEMBER <FONT STYLE="text-transform: uppercase">23</FONT>, 2020</B></FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><IMG SRC="image_001.jpg" ALT=""></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>MERGER AND DISPOSITION PROPOSALS&mdash;YOUR
VOTE IS VERY IMPORTANT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">[&nbsp;&nbsp;&nbsp; ], 2020</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Dear Shareholder:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">You are cordially invited to a special meeting of shareholders
of Lianluo Smart Limited (which we refer to as the Company or we, us or our) to be held on [&nbsp;&nbsp; ], 2020 at 10:00 a.m.,
local time, at our offices located at Room 611, 6th Floor, BeiKong Technology Building, No. 10 Baifuquan Road, Changping District,
Beijing, 102200, People&rsquo;s Republic of China. At the special meeting, you will be asked to vote on the important matters
described in detail in the notice of special meeting of shareholders and proxy statement/prospectus accompanying this letter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">One of the matters that you will be asked to vote on at the
special meeting is the adoption of an agreement and plan of merger, dated as of October 23, 2020, and as it may be amended from
time to time (which we refer to as the merger agreement), by and among the Company, Newegg Inc., a Delaware corporation, or Newegg,
and Lightning Delaware Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company, or Merger Sub, pursuant to
which Merger Sub will be merged with and into Newegg, with Newegg continuing as the surviving corporation and a wholly owned subsidiary
of the Company (we refer to this transaction as the merger).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If the&nbsp;merger&nbsp;is completed, each share of the capital
stock of Newegg that was issued and outstanding immediately prior to the effective time of the&nbsp;merger will be converted into
the right to receive 5.8417 common shares of the Company (which we refer to as the exchange ratio), plus the right, if any, to receive
cash in lieu of fractional shares of the Company (which we collectively refer to as the merger consideration); provided that the
exchange ratio shall be appropriately adjusted to reflect the effect of any share split, split-up, reverse share split, share
dividend or distribution of securities convertible into the Company&rsquo;s common shares or Newegg&rsquo;s capital stock or any
reorganization, recapitalization, reclassification or other like change with respect to Company&rsquo;s common shares or Newegg&rsquo;s
capital stock having a record date occurring on or after the date of the merger agreement and prior to the completion of the merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Although the exchange ratio for the&nbsp;merger&nbsp;consideration
is fixed (subject to the adjustments described above), the market value of the&nbsp;merger&nbsp;consideration will fluctuate with
the market price of our Class A common shares. Based on the closing price on October 23, 2020, the last trading day before the
public announcement of the signing of the&nbsp;merger agreement, the implied aggregate value of the&nbsp;merger&nbsp;consideration
is approximately $1.18 billion. Based on the closing price on [ ], 2020, the last practicable date before the date of the accompanying
proxy statement/prospectus, the implied aggregate value of the&nbsp;merger&nbsp;consideration will be up to approximately $[ ]
million.&nbsp; Our Class A common shares are listed on the <FONT STYLE="background-color: white">NASDAQ Capital Market under the
trading symbol &ldquo;LLIT.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> We estimate that we may issue approximately 363,325,542
common shares to Newegg stockholders upon completion of the merger, based on the number of shares of Newegg issued and outstanding
as of December 22, 2020, the most recent practicable date for which such information was available. Based on the number of our
common shares and Newegg stock outstanding as of such date, immediately following the completion of merger, our shareholders immediately
prior to the merger are expected to own approximately 0.98% of our outstanding common shares and former Newegg stockholders are
expected to own approximately 99.02% of our outstanding common shares (on a fully-diluted basis). </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Another matter that you will be asked to vote on at the special
meeting is adoption of an equity transfer agreement, dated as of October 23, 2020, and as it may be amended from time to time (which
we refer to as the disposition agreement), among Beijing Fenjin Times Technology Development Co., Ltd., or the Purchaser, Lianluo
Connection Medical Wearable Device Technology (Beijing) Co., Ltd., or Lianluo Connection, and the Company, pursuant to which we
will sell of all of our equity interests in Lianluo Connection, our wholly owned subsidiary, to the Purchaser immediately following
completion of the merger (we refer to this transaction as the disposition).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Following completion of the merger and the disposition, the
business of Newegg, as described in the proxy statement/prospectus accompanying this letter, will be the business of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition to the foregoing, at the special meeting shareholders
will also be asked to vote on the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>a proposal to redesignate our authorized shares to eliminate the dual class structure;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>a proposal to approve a share combination of our issued and outstanding common shares by a ratio of not less than one-for-two
and not more than one-for-fifty at any time no later than June 30, 2021;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>a proposal to increase the number of common shares that the Company is authorized to issue;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>a proposal to change the name of the Company to &ldquo;Newegg Commerce, Inc.&rdquo; upon the consummation of the transactions
contemplated by the merger agreement; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>a proposal to amend and restate our current amended and
                                         restated memorandum and articles of association to effect the foregoing and to make certain
                                         other amendments described in the accompanying proxy statement/prospectus.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Shareholders will also be asked to approve a proposal to adjourn
the special meeting to a later date if necessary to solicit additional proxies if there are not sufficient votes at the time of
the special meeting, or any adjournment or postponement thereof, to approve the foregoing matters.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The record date for determining the shareholders entitled to
receive notice of, and to vote at, the special meeting is [&nbsp;&nbsp;&nbsp; ], 2020. Only shareholders of record at that time
are entitled to notice of, and to vote at, the special meeting, or any adjournment or postponement of the special meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Each of the special committee of our board of directors and
our board of directors unanimously determined that the merger agreement and the transactions contemplated thereby, including the
issuance of common shares in connection with the merger, and the disposition agreement and the transactions contemplated thereby,
as well as the other proposals set forth above, are advisable and fair to and in the best interests of shareholders and unanimously
recommended that shareholders vote &ldquo;FOR&rdquo; each proposal set forth in the accompanying proxy statement/prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Your vote is important. Whether or not you expect to attend
the special meeting, we urge you to vote your shares as promptly as possible by (1)&nbsp;accessing the Internet website specified
on your proxy card; (2)&nbsp;calling the toll-free number specified on your proxy card; or (3)&nbsp;signing and returning the
enclosed proxy card in the postage-paid envelope provided, so that your shares may be represented and voted at the special meeting.&nbsp;If
your shares are held in the name of a bank, broker or other fiduciary, please follow the instructions on the voting instruction
card furnished by the record holder.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The accompanying proxy statement/prospectus provides important
information regarding the special meeting and a detailed description of the merger agreement, the disposition agreement, the merger,
the disposition and the other proposals described above, as well as detailed business and financial information about Newegg.
We urge you to read the accompanying proxy statement/prospectus (and any documents incorporated by reference into the accompanying
proxy statement/prospectus) carefully. <B>Please pay particular attention to the section &ldquo;Risk Factors&rdquo; beginning
on page 26 of the accompanying proxy statement/prospectus.</B> You can also obtain information about us from documents that we
have previously filed with the Securities and Exchange Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We hope to see you at the special meeting and look forward
to the successful completion of the merger and the disposition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Sincerely,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="border-bottom: Black 1.5pt solid; width: 40%">/S/ Bin Lin</TD>
    <TD STYLE="padding-bottom: 1.5pt; width: 60%">&nbsp;</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Bin Lin</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Chief Executive Officer</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Lianluo Smart Limited</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of the securities to be issued under the accompanying proxy statement/prospectus
or determined that the accompanying proxy statement/prospectus is accurate or complete. Any representation to the contrary is
a criminal offense. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The accompanying proxy statement/prospectus is dated [&nbsp;&nbsp;
], 2020 and is first being mailed to shareholders on or about [&nbsp;&nbsp; ], 2020.<B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><IMG SRC="image_002.jpg" ALT="">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Lianluo Smart Limited</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Room 611, 6th Floor, BeiKong Technology
Building</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>No. 10 Baifuquan Road, Changping District</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Beijing 102200,&nbsp;People&rsquo;s
Republic of China</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>+ 86-10-89788107</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>TO BE HELD ON [&nbsp;&nbsp; ], 2020
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Notice is hereby given that Lianluo Smart Limited (which we
refer to as the Company or we, us or our) will hold a special meeting of shareholders on [&nbsp;&nbsp; ], 2020 at 10:00 a.m.,
local time, at our offices located at Room 611, 6th Floor, BeiKong Technology Building, No. 10 Baifuquan Road, Changping District,
Beijing, 102200, People&rsquo;s Republic of China. The special meeting will be held for the purpose of allowing shareholders to
consider and vote upon the following matters:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">1.</TD><TD>to consider and vote on a proposal to adopt an agreement and plan of merger, dated as of October 23, 2020, and as it may be
amended from time to time (which we refer to as the merger agreement), by and among the Company, Newegg Inc., a Delaware corporation,
or Newegg, and Lightning Delaware Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company, or Merger Sub,
pursuant to which Merger Sub will be merged with and into Newegg, with Newegg continuing as the surviving corporation and a wholly
owned subsidiary of the Company (a copy of the merger agreement is attached as Annex A to the accompanying proxy statement/prospectus)
(we refer to this proposal as the merger proposal);</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">2.</TD><TD>to consider and vote on a proposal to adopt the equity transfer agreement, dated as of October 23, 2020, and as it may be amended
from time to time (which we refer to as the disposition agreement), among Beijing Fenjin Times Technology Development Co., Ltd.,
or the Purchaser, Lianluo Connection Medical Wearable Device Technology (Beijing) Co., Ltd., or Lianluo Connection, and the Company,
pursuant to which we will sell of all of our equity interests in Lianluo Connection, our wholly owned subsidiary, to the Purchaser
immediately following completion of the merger (a copy of the disposition agreement is attached as Annex E to the accompanying
proxy statement/prospectus) (we refer to this proposal as the disposition proposal);</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">3.</TD><TD>to consider and vote on a proposal to redesignate all of our issued and unissued Class A common shares of par value of $0.021848
each and Class B common shares of par value of $0.021848 each into common shares of par value of $0.021848 each on a one to one
basis, thus eliminating the Company&rsquo;s dual class structure (we refer to this proposal as the redesignation proposal);</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">4.</TD><TD>to consider and vote on a proposal to complete a share combination of our issued and outstanding common shares by a ratio of
not less than one-for-two and not more than one-for-fifty no later than June 30, 2021, with the exact ratio to be set at a whole
number within this range, as determined by our board of directors in its sole discretion (we refer to this proposal as the share
combination proposal);</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>




<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">5.</TD><TD>to consider and vote upon a proposal to increase the number
                                         of common shares that the Company is authorized to issue to an unlimited number of common
                                         shares (we refer to this proposal as the share increase proposal);</TD></TR>                    <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">6.</TD><TD>to consider and vote on a proposal to change the name of the
                                         Company to &ldquo;Newegg Commerce, Inc.&rdquo; (we refer to this proposal as the name
                                         change proposal);</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">7.</TD><TD>to consider and vote on a proposal to amend and restate our current amended and restated memorandum and articles of association
to effect the redesignation proposal, the share combination proposal, the share increase proposal and the name change proposal,
as well as certain other amendments described in the accompanying proxy statement/prospectus (a copy of the amended and restated
memorandum and articles of association is attached as Annex G to the accompanying proxy statement/prospectus) (we refer to this
proposal as the charter amendment proposal); and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">8.</TD><TD>to consider and vote on a proposal to approve the adjournment of the special meeting to a later date if necessary to solicit
additional proxies if there are not sufficient votes to approve the merger proposal, the disposition proposal, the redesignation
proposal, the share combination proposal, the share increase proposal, the name change proposal or the charter amendment proposal
at the time of the special meeting, or any adjournment or postponement thereof (we refer to this proposal as the adjournment proposal).</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our board of directors has fixed the close of business on [&nbsp;&nbsp;&nbsp;], 2020 as the record date for the determination of the shareholders entitled to vote at the special meeting, or any adjournment
or postponement thereof. Only shareholders of record at the record date are entitled to notice of, and to vote at, the special
meeting, or any adjournment or postponement thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">A quorum, which is not less than 50% of the votes of our common
shares issued and outstanding and entitled to vote as of the record date, must be present to hold the special meeting. A quorum
is calculated based on the number of shares represented by the shareholders attending the meeting in person and by their proxy
holders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Brokers who hold common shares for a beneficial owner have
the discretion to vote on routine proposals when they have not received voting instructions from the beneficial owner. If a broker
indicates on the enclosed proxy card or its substitute that such broker does not have discretionary authority to vote on a particular
matter (broker non-votes), those shares will be considered as present for purposes of determining the presence of a quorum but
will not be treated as shares entitled to vote on that matter. Note that, if you are a beneficial owner and do not provide specific
voting instructions to your broker, the broker that holds your shares will not be authorized to vote on the proposals. Accordingly,
we encourage you to provide voting instructions to your broker, whether or not you plan to attend the special meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Assuming that a quorum is present, approval of the merger proposal,
the disposition proposal, the redesignation proposal, the share combination proposal, the share increase proposal, the name change
proposal and the charter amendment proposal each requires the affirmative vote of both (i) a majority of the votes cast at the
special meeting and (ii) a majority of the votes cast at the special meeting which are not beneficially owned by Hangzhou Lianluo
Interactive Information Technology Co., Ltd., or Hangzhou Lianluo, an entity controlled by Mr. Zhitao He, our former Chairman of
Board of Directors and former Chief Executive Officer. Hangzhou Lianluo owns all of our Class B common shares issued and outstanding.
In addition, assuming that a quorum is present, approval of the redesignation proposal also requires the affirmative vote of a
majority of the issued and outstanding Class B common shares entitled to vote and voting on that proposal at the special meeting.
Approval of the adjournment proposal requires the affirmative vote of a majority of the votes cast at the special meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Each of the special committee of our board of directors
and our board of directors unanimously determined that the merger agreement and the transactions contemplated thereby, including
the issuance of common shares in connection with the merger, the disposition agreement and the transactions contemplated thereby,
as well as the other proposals set forth above, are advisable and fair to and in the best interests of shareholders and unanimously
recommended that shareholders vote &ldquo;FOR&rdquo; each proposal. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">By Order of the Board of Directors,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Bin Lin</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Chief Executive Officer</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Beijing, China</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">[&nbsp;&nbsp; ], 2020</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>YOUR VOTE IS IMPORTANT! </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING,
WE URGE YOU TO SUBMIT YOUR PROXY AS PROMPTLY AS POSSIBLE (1)&nbsp;VIA THE INTERNET, (2)&nbsp;BY TELEPHONE, OR (3)&nbsp;BY COMPLETING,
SIGNING AND DATING THE ENCLOSED PROXY CARD AND RETURNING IT IN THE POSTAGE-PAID ENVELOPE PROVIDED. IF YOU ATTEND THE SPECIAL MEETING
IN PERSON AND WISH TO VOTE YOUR SHARES AT THE SPECIAL MEETING, YOU MAY DO SO AT ANY TIME PRIOR TO THE CLOSING OF THE POLLS AT
THE SPECIAL MEETING</B>. You may revoke your proxy or change your vote for shares you hold directly in your name by (i)&nbsp;sending
a signed notice stating that you revoke your proxy to [&nbsp;&nbsp; ], that bears a date later than the date of the proxy you
want to revoke and is received prior to the special meeting, (ii) submitting revised votes over the Internet or by telephone before
11:59 p.m. (Eastern Time) on [&nbsp;&nbsp; ], 2020, or by mail that is received prior to the special meeting, or (iii)&nbsp;attending
the special meeting in person and voting your shares or revoking your proxy. If your shares are held in the name of a bank, broker
or other nominee holder of record, please follow the instructions on the voting instruction form furnished to you by such record
holder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We urge you to read the accompanying proxy statement/prospectus
and its annexes carefully and in their entirety. If you have any questions concerning the special meeting, any of the proposals
to be considered at the special meeting, or the accompanying proxy statement/prospectus, or if you need help voting your shares,
please contact:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Lianluo Smart Limited</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Room 611, 6th Floor, BeiKong Technology
Building</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">No. 10 Baifuquan Road, Changping District</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Beijing 102200</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">People&rsquo;s Republic of China</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Attention: Corporate Secretary</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Telephone: 86-10-89788107</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>TABLE OF CONTENTS </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%">
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="width: 92%; text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_001">QUESTIONS
    AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING</A></TD>
    <TD STYLE="vertical-align: bottom; width: 8%; text-align: center; padding-top: 0in; padding-bottom: 0in">vi</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_002">SUMMARY</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">1</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_003">The Companies</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">1</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_004">The Merger</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">2</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_005">Special Meeting
    of Shareholders</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">3</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_006">What Newegg Stockholders
    Will Receive in the Merger</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">4</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_007">Treatment of
    Newegg Equity Awards</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">4</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_008">Recommendation
    of the Board and its Reasons for the Merger</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">4</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_009">Ownership of
    Common Shares After the Merger</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">4</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_010">Opinion of Financial
    Advisor</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">5</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_011">Interests of
    Directors and Executive Officers in the Merger</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">5</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_012">Dissenters&rsquo;
    Rights Available to Shareholders</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">5</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_013">Completion of
    the Merger is Subject to Certain Conditions</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">5</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_014">Regulatory Approvals</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">8</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_015">Listing on NASDAQ</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">8</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_016">Completion and
    Effectiveness of the Merger</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">8</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_017">Go Shop</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">8</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_018">Termination of
    the Merger Agreement</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">9</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_019">Termination Fees
    and Expenses</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">10</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_020">Specific Performance</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">11</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_021">Anticipated Accounting
    Treatment</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">12</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_022">Transaction Expenses</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">12</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_023">Risk Factors</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">12</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_024">SELECTED CONSOLIDATED
    FINANCIAL DATA OF THE COMPANY</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">15</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_025">SELECTED CONSOLIDATED
    FINANCIAL DATA OF NEWEGG</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">16</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_026">UNAUDITED PRO FORMA
    CONDENSED COMBINED FINANCIAL INFORMATION</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">17</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_027">EQUIVALENT AND COMPARATIVE
    PER SHARE INFORMATION</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">23</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_028">COMPARATIVE PER SHARE
    MARKET PRICE AND DIVIDEND INFORMATION</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">24</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_029">Market Information</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">24</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_030">Recent Closing
    Prices and Comparative Market Price Information</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">24</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_031">Dividend Policy</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">24</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_032">CAUTIONARY STATEMENT
    REGARDING FORWARD-LOOKING STATEMENTS</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">25</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_033">RISK FACTORS</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">26</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_034">Risks Related
    to the Merger and Disposition</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">26</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_035">Risks Related
    to the Business of the Company</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">30</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_036">Risks Related
    to the Business of Newegg</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">47</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_037">Risks Related
    to Ownership of our Common Shares</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">61</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_038">THE COMPANIES</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">66</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_039">Lianluo Smart
    Limited</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">66</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_040">Lightning Delaware
    Sub, Inc.</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">66</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_041">Newegg Inc.</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">66</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_042">SPECIAL MEETING OF
    SHAREHOLDERS</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">67</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_043">Date, Time and
    Location</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">67</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_044">Purpose</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">67</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_045">Recommendations
    of Board of Directors</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">67</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_046">Record Date;
    Outstanding Shares; Shareholders Entitled to Vote</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">68</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_047">Quorum</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">68</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_048">Required Vote</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">68</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_049">Share Ownership
    of and Voting by Directors and Executive Officers</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">68</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_050">Voting of Shares</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">68</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_051">Revocability
    of Proxies; Changing Your Vote</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">69</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_052">Solicitation
    of Proxies; Expenses of Solicitation</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">70</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_053">Householding</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">70</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_054">Adjournment</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">70</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_055">Other Information</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">70</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_056">Assistance</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">70</TD></TR>
</TABLE>
<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

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<P STYLE="margin: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%">
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in; width: 92%"><A HREF="#al_057">PROPOSAL
    I: THE MERGER</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in; width: 8%">71</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_058">General</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">71</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_059">Background of
    the Merger</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">71</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_060">Reasons for the
    Merger</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">73</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_061">Reports, Opinions
    and Appraisals</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">74</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_062">Ownership of
    Common Shares After the Merger</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">79</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_063">Effect on the
    Company if the Merger is Not Completed</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">79</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_064">Interests of
    Directors, Executive Officers and Major Shareholders in the Merger</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">79</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_065">Regulatory Approvals
    Required for the Merger</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">80</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_066">Listing on NASDAQ</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">80</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_067">Anticipated Accounting
    Treatment</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">82</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_068">Transaction Expenses</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">82</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_069">No Appraisal
    or Dissenters&rsquo; Rights</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">82</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_070">Vote Required</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">82</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_071">Recommendation
    of the Board</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">82</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_072">THE MERGER AGREEMENT</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">83</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_073">Structure of
    the Merger</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">83</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_074">Completion and
    Effectiveness of the Merger</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">83</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_075">Merger Consideration</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">84</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_076">Fractional Shares</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">84</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_077">Shares Subject
    to Properly Exercised Appraisal Rights</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">84</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_078">Treatment of
    Newegg Equity Awards</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">84</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_079">Escrow Account</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">84</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_080">Conditions to
    Completion of the Merger</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">84</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_083">Representations
    and Warranties</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">86</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_081">Definition of
    Material Adverse Effect</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">87</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_082">Conduct of Business
    Pending the Merger</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">87</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_084">Go Shop</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">90</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_085">Proxy Statement
    and Registration Statement Covenant</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">90</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_086">Other Agreements</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">91</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_087">Termination of
    the Merger Agreement</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">92</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_088">Termination Fees
    and Expenses</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">93</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_089">Other Expenses</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">93</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_090">Specific Performance</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">93</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_091">Amendments; Waivers</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">93</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_092">THE VOTING AGREEMENTS</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">94</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_093">Agreement to
    Vote and Irrevocable Proxy</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">94</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_094">Transfer Restrictions</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">94</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_095">Agreement to
    Convert Class B Common Shares</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">95</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_096">PROPOSAL II: THE
    DISPOSITION</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">96</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_097">Description of
    the Proposed Disposition</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">96</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_098">Reasons and Background
    for the Proposed Disposition</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">96</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_099">Reports, Opinions
    and Appraisals</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">96</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_100">Effect on the
    Company if the Disposition is Not Completed</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">101</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_101">Interests of
    Directors and Executive Officers in the Proposed Disposition</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">101</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_102">No Appraisal
    or Dissenters&rsquo; Rights</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">101</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_103">Vote Required</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">101</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_104">Recommendation
    of the Board</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">101</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_105">THE DISPOSITION AGREEMENT</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">102</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_106">The Disposition</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">102</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_107">Representations
    and Warranties</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">102</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_108">Closing Conditions</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">102</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_109">Amendment and
    Termination</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">102</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_110">Governing Law</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">102</TD></TR>
</TABLE>
<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%">
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in; width: 92%"><A HREF="#al_111">PROPOSAL
    III: REDESIGNATION</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in; width: 8%">103</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_112">Purpose and Effect
    of the Redesignation</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">103</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_113">Vote Required</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">103</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_114">Recommendation
    of the Board</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">103</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_115">PROPOSAL IV: SHARE
    COMBINATION</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">104</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_116">Purpose of Share
    Combination</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">104</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_117">Effect of the
    Share Combination</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">105</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_118">Fractional Shares</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">105</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_119">Procedure for
    Implementing the Share Combination</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">105</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_120">Federal Income
    Tax Consequences of the Share Combination</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">106</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_121">Vote Required</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">106</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_122">Recommendation
    of the Board</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">106</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_123">PROPOSAL V: SHARE
    INCREASE</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">107</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_124">Purpose and Effect
    of the Share Increase</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">107</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_125">Vote Required</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">107</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_126">Recommendation
    of the Board</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">107</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_127">PROPOSAL VI: NAME
    CHANGE</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">108</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_128">Purpose and Effect
    of the Name Change</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">108</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_129">Vote Required</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">108</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_130">Recommendation
    of the Board</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">108</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_131">PROPOSAL VII: CHARTER
    AMENDMENT</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">109</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_132">Purpose and Effect
    of Charter Amendment</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">109</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_133">Vote Required</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">109</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_134">Recommendation
    of the Board</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">109</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_135">PROPOSAL VIII: ADJOURNMENT
    OF THE SPECIAL MEETING</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">110</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_136">Purpose of Adjournment
    Proposal</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">110</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_137">Vote Required</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">110</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_138">Recommendation
    of the Board</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">110</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_139">INFORMATION ABOUT
    THE COMPANY</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">111</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_140">History and Development
    of the Company</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">111</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_141">Business Overview</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">112</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_142">Our Products
    and Services</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">113</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_143">Customers</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">114</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_144">Competition</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">115</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_145">Sales and Marketing</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">115</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_146">Seasonality</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">116</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_147">Regulations</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">116</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_148">Property, Plant
    and Equipment</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">124</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_149">Legal Proceedings</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">125</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_150">INFORMATION ABOUT
    NEWEGG</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">126</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_151">Overview</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">126</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_153">The Newegg Ecosystem</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">126</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_152">Newegg&rsquo;s
    Competitive Strengths</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">128</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_154">Newegg&rsquo;s
    Growth Strategies</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">128</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_155">Newegg&rsquo;s
    Business&nbsp;Models</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">129</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_156">The Newegg Platforms</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">134</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_157">Logistics and
    Fulfillment</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">135</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_158">Customer Service
    and Support</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">136</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_159">Payment</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">137</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_160">Sales and Marketing</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">137</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_161">Technology</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">138</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_162">Security and
    Privacy Policy</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">140</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_163">Intellectual
    Property</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">140</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_164">Competition</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">140</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_165">Awards and Accolades</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">141</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_166">Employees</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">142</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_167">Facilities</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">142</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_168">Seasonality</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">143</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_169">Government Regulations</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">143</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_170">Legal Proceedings</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">144</TD></TR>
</TABLE>
<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%">
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0.125in; width: 92%"><A HREF="#al_171">MANAGEMENT&rsquo;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE COMPANY</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in; width: 8%">145</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_172">Overview</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">145</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_173">Recent Developments</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">146</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_174">Factors Affecting Our Results of Operations Generally</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">147</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_175">Components of Operating Results</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">147</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_176">Results of Operations</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">149</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_177">Liquidity and Capital Resources</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">152</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_178">Research and Development</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">154</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_179">Off-Balance Sheet Arrangements</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">154</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_180">Tabular Disclosure of Contractual Obligations</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">154</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0.125in"><A HREF="#al_181">MANAGEMENT&rsquo;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR NEWEGG</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">158</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_182">Newegg&rsquo;s Business Overview and COVID-19 Update</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">158</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_183">Newegg&rsquo;s Business Model</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">159</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_184">Factors Affecting Newegg&rsquo;s Results of Operations</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">159</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_185">Segment Information</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">161</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_186">Key Components of Results of Operations</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">162</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_187">Results of Operations</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">164</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_188">Non-GAAP Measures</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">168</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_189">Liquidity and Capital Resources</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">170</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_190">Capital Expenditures</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">172</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_191">Credit Agreements</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">173</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_192">Contractual Obligations</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">173</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_193">Off-Balance Sheet Commitments and Arrangements</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">173</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_194">Quantitative and Qualitative Disclosure about Market Risk</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">173</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_195">Related Party Transactions</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">174</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_196">Critical Accounting Policies, Judgments and Estimates</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">174</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_197">Recent Accounting Pronouncements</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">177</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_198">DIRECTORS AND EXECUTIVE OFFICERS</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">178</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_199">Directors and Executive Officers Following the Merger</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">178</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_200">Board of Directors</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">180</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_201">Duties of Directors</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">180</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_202">Limitation of Director and Officer Liability</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">180</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_203">Involvement in Certain Legal Proceedings</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">181</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_204">Family Relationship</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">181</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_205">Terms of Directors and Executive Officers</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">181</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_206">Qualification</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">181</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_207">Committees of the Board of Directors</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">181</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_208">Code of Ethics</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">183</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_209">COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">184</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_210">Director and Executive Officer Compensation</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">184</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_211">Employment Agreements</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">184</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_212">Equity Incentive Plans</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">184</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_213">TRANSACTIONS WITH RELATED PERSONS</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">186</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_214">PRINCIPAL SHAREHOLDERS</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">188</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_215">Security Ownership of the Company</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">188</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_216">Security Ownership of Newegg</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">189</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_217">Security Ownership of the Company After the Merger</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">190</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_218">TAXATION</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">191</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_219">BVI Taxation</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">191</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_220">PRC Taxation</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">191</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_221">U.S. Federal Income Taxation</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">192</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_222">DESCRIPTION OF SECURITIES</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">195</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_223">Rights and Obligations of Shareholders</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">195</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_224">The Investor Warrants</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">196</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_225">Hangzhou Lianluo Warrants</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">197</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_226">Amended and Restated Memorandum and Articles of Association</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">197</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 12.25pt"><A HREF="#al_226a">Rights of Certain Principal Shareholders of the Company</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">201</TD></TR>
</TABLE>
<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%">
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in; width: 92%"><A HREF="#al_227">EXCHANGE
    CONTROLS</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in; width: 8%">211</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_228">SUBMISSION OF SHAREHOLDER
    PROPOSALS</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">211</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_229">LEGAL MATTERS</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">211</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_230">EXPERTS</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">211</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_231">ENFORCEMENT OF CIVIL
    LIABILITIES</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">212</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_232">WHERE YOU CAN FIND
    MORE INFORMATION</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">213</TD></TR>
<TR STYLE="text-align: left; vertical-align: bottom; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-top: 0in; padding-bottom: 0in; padding-left: 0in"><A HREF="#al_233">FINANCIAL STATEMENTS</A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; padding-top: 0in; padding-bottom: 0in">F-1</TD></TR>
</TABLE>
<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>ANNEXES </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top"><A HREF="#annexa_001"><FONT STYLE="font-size: 10pt">Annex&nbsp;A</FONT></A></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; vertical-align: top"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 6pt"><FONT STYLE="font-size: 10pt">Agreement and Plan of Merger, dated
    as of October 23, 2020, among Lianluo Smart Limited, Newegg Inc. and Lightning Delaware Sub, Inc.</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><A HREF="#annexb_001"><FONT STYLE="font-size: 10pt">Annex&nbsp;B</FONT></A></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; vertical-align: top"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 6pt"><FONT STYLE="font-size: 10pt">Voting Agreement, dated as of October 23, 2020,
    among Lianluo Smart Limited, Newegg Inc., Hangzhou Lianluo Interactive Information Technology Co., Ltd. and Hyperfinite Galaxy
    Holding Limited</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><A HREF="#annexc_001"><FONT STYLE="font-size: 10pt">Annex C</FONT></A></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; vertical-align: top">&mdash;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 6pt"><FONT STYLE="font-size: 10pt">Voting Agreement, dated as of October 23, 2020,
    among Lianluo Smart Limited, Newegg Inc. and Ping Chen</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><A HREF="#annexd_001">Annex D</A></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; vertical-align: top"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 6pt"><FONT STYLE="font-size: 10pt">Opinion of Financial Advisor for Merger</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><A HREF="#annexe_001">Annex E</A></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; vertical-align: top"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 6pt"><FONT STYLE="font-size: 10pt">Equity Transfer Agreement, dated as
    of October 23, 2020, among Beijing Fenjin Times Technology Development Co., Ltd., Lianluo Connection Medical Wearable Device Technology
    (Beijing) Co., Ltd. and Lianluo Smart Limited</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><A HREF="#annexf_001">Annex F</A></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; vertical-align: top"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 6pt"><FONT STYLE="font-size: 10pt">Opinion of Financial Advisor for Disposition</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><A HREF="#annexg_001">Annex G</A></FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; vertical-align: top"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-bottom: 6pt"><FONT STYLE="font-size: 10pt">Form of Amended and Restated Memorandum
    and Articles of Association</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="al_001"></A>QUESTIONS AND
ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>The following are some questions that you, as a shareholder
of Lianluo Smart Limited (which we refer to as the Company or we, us or our), may have regarding the special meeting and the matters
to be considered at the special meeting, as well as brief answers to those questions. You are urged to carefully read this proxy
statement/prospectus and its annexes in their entirety because this section may not provide all of the information that is important
to you with respect to the matters to be considered at the special meeting. Additional important information is contained in the
annexes to this proxy statement/prospectus. See &ldquo;Where You Can Find More Information.&rdquo; </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>Why am I receiving this document
                                         and why am I being asked to vote on the merger agreement and the disposition agreement?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>We have entered into a merger transaction with
Newegg Inc., a Delaware corporation, or Newegg, pursuant to which Lightning Delaware Sub, Inc., a Delaware corporation and wholly
owned subsidiary of the Company, or Merger Sub, will be merged with and into Newegg, with Newegg continuing as the surviving corporation
and a wholly owned subsidiary of the Company (we refer to this transaction as the merger). In order to complete the merger, our
shareholders must vote to adopt the agreement and plan of merger, dated as of October 23, 2020, among the Company, Newegg and
Merger Sub. We refer to the agreement and plan of merger, as it may be amended, supplemented or modified from time to time, as
the merger agreement.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">We have also entered into an equity transfer agreement,
dated as of October 23, 2020, with Beijing Fenjin Times Technology Development Co., Ltd., or the Purchaser, and Lianluo Connection
Medical Wearable Device Technology (Beijing) Co., Ltd., or Lianluo Connection, pursuant to which we will sell of all of our equity
interests in Lianluo Connection, our wholly owned subsidiary, to the Purchaser immediately following completion of the merger
(we refer to this transaction as the disposition). We refer to the equity transfer agreement, as it may be amended, supplemented
or modified from time to time, as the disposition agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">We are holding a special meeting of shareholders
(which we refer to as the special meeting) in order to, among other things, obtain the shareholder approval necessary to adopt
the merger agreement and the disposition agreement. <B>The adoption of the merger agreement and the disposition agreement each
requires the affirmative vote of both (i) a majority of the votes cast at the special meeting and (ii) a majority of the votes
cast at the special meeting which are not beneficially owned by Hangzhou Lianluo Interactive Information Technology Co., Ltd.,
or Hangzhou Lianluo, an entity controlled by Mr. Zhitao He, our former Chairman of Board of Directors and former Chief Executive
Officer. It is important that shareholders vote their shares on these matters, regardless of the number of shares owned.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">This document is being delivered to you as both
a proxy statement and a prospectus in connection with the merger and the disposition. It is the proxy statement by which our board
of directors is soliciting proxies from shareholders to vote at the special meeting, or at any adjournment or postponement of
the special meeting. In addition, this document is the prospectus of the Company pursuant to which it will issue common shares
to the stockholders of Newegg as merger consideration in connection with the merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>What are shareholders being
                                         asked to vote on?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>Shareholders are being asked to vote on the following
                                         proposals:</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD>to adopt the merger agreement (we refer
                                         to this proposal as the merger proposal);</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD>to adopt the disposition agreement
                                         (we refer to this proposal as the disposition proposal);</TD>
</TR></TABLE>


<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>to approve the redesignation of all issued and unissued Class
A common shares of par value of $0.021848 each and Class B common shares of par value of $0.021848 each into common shares of par
value of $0.021848 each on a one to one basis, thus eliminating the Company&rsquo;s dual class structure (we refer to this proposal
as the redesignation proposal);</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD>to approve a share combination of our issued and outstanding
common shares by a ratio of not less than one-for-two and not more than one-for-fifty (which we refer to as the share combination)
at any time no later than June 30, 2021, with the exact ratio to be set at a whole number within this range, as determined by our
board of directors in its sole discretion (we refer to this proposal as the share combination proposal);</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD>to approve an increase of the number
                                         of common shares that the Company is authorized to issue to an unlimited number of common
                                         shares (which refer to as the share increase) following the share combination (we refer
                                         to this proposal as the share increase proposal);</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD>to approve a change of the name of
                                         the Company to &ldquo;Newegg Commerce, Inc.&rdquo; (we refer to this proposal as the
                                         name change proposal);</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: left">&#9679;</TD>
    <TD>to approve an amendment and restatement of our current amended and restated memorandum and articles of association to effect the redesignation proposal, the share combination proposal, the share increase proposal and the name change proposal, as well as certain other amendments described in this proxy statement/prospectus (we refer to this proposal as the charter amendment proposal); and</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>to approve the adjournment of the special meeting if necessary to solicit additional proxies if there are not sufficient votes
to approve the merger proposal, the disposition proposal, the redesignation proposal, the share combination proposal, the share
increase proposal, the name change proposal or the charter amendment proposal at the time of the special meeting, or any adjournment
or postponement thereof (we refer to this proposal as the adjournment proposal).</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">The approval the foregoing matters is a condition
to the obligations of the Company and Newegg to complete the merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>When and where is the special
                                         meeting?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>The special meeting will be held on [&nbsp;&nbsp;],
                                         2020 at 10:00 a.m., local time, at our offices located at Room 611, 6th Floor, BeiKong
                                         Technology Building, No. 10 Baifuquan Road, Changping District, Beijing, 102200, People&rsquo;s
                                         Republic of China.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>Who is entitled to vote at
                                         the special meeting?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>All holders of Class A common shares and Class
                                         B common shares who held shares at the record date for the special meeting (the close
                                         of business on [&nbsp;&nbsp;], 2020) are entitled to receive notice of, and to vote at,
                                         the special meeting. As of the close of business on the record date, there were [&nbsp;&nbsp;]
                                         Class A common shares and [&nbsp;&nbsp;] Class B common shares issued and outstanding.
                                         Each holder of Class A common shares is entitled to one vote per share and each holder
                                         of Class B common shares is entitled to ten votes per share.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>What constitutes a quorum
                                         for the special meeting?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>The presence at the commencement of the special
                                         meeting, in person or by proxy, of not less than 50% of the votes of the common shares
                                         issued and outstanding and entitled to vote constitutes a quorum for the special meeting.
                                         Abstentions will be deemed present at the special meeting for the purpose of determining
                                         the presence of a quorum. Shares held in &ldquo;street name&rdquo; with respect to which
                                         the beneficial owner fails to give voting instructions to the broker, bank or other nominee
                                         holder of record will not be deemed present at the special meeting for the purpose of
                                         determining the presence of a quorum.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>What shareholder vote is
                                         required for the approval of each proposal at the special meeting?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>The following are the vote requirements for the
                                         approval of the proposals at the special meeting:</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Merger
                                         proposal</I>: Assuming that a quorum is present, the affirmative vote of both (i) a majority
                                         of the votes cast at the special meeting and (ii) a majority of votes cast at the special
                                         meeting which are not beneficially owned by Hangzhou Lianluo is required.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Disposition
                                         proposal</I>: Assuming that a quorum is present, the affirmative vote of both (i) a majority
                                         of the votes cast at the special meeting and (ii) a majority of votes cast at the special
                                         meeting which are not beneficially owned by Hangzhou Lianluo is required.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD><I>Redesignation proposal</I>: Assuming that a quorum is present, the affirmative vote of both (i) a majority of the votes
cast at the special meeting and (ii) a majority of votes cast at the special meeting which are not beneficially owned by Hangzhou
Lianluo is required. In addition, assuming that a quorum is present, the affirmative vote of a majority of the issued and outstanding
Class B common shares entitled to vote and voting on this proposal at the special meeting is required.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD><I>Share combination proposal</I>: Assuming that a quorum
                                         is present, the affirmative vote of both (i) a majority of the votes cast at the special
                                         meeting and (ii) a majority of votes cast at the special meeting which are not beneficially
                                         owned by Hangzhou Lianluo is required.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Share
                                         increase proposal</I>: Assuming that a quorum is present, the affirmative vote of both
                                         (i) a majority of the votes cast at the special meeting and (ii) a majority of votes
                                         cast at the special meeting which are not beneficially owned by Hangzhou Lianluo is required.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Name
                                         change proposal</I>: Assuming that a quorum is present, the affirmative vote of both
                                         (i) a majority of the votes cast at the special meeting and (ii) a majority of votes
                                         cast at the special meeting which are not beneficially owned by Hangzhou Lianluo is required.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Charter
                                         amendment proposal</I>: Assuming that a quorum is present, the affirmative vote of both
                                         (i) a majority of the votes cast at the special meeting and (ii) a majority of votes
                                         cast at the special meeting which are not beneficially owned by Hangzhou Lianluo is required.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>Adjournment
                                         proposal</I>: The affirmative vote of a majority of the votes cast at the special meeting
                                         is required.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>Does our board of directors recommend that shareholders
                                         approve the merger proposal?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>Yes. Each of the special committee of our board
                                         of directors (which we refer to as the special committee) and our board of directors
                                         unanimously determined that the merger agreement, the merger and the other transactions
                                         contemplated by the merger agreement, including the issuance of common shares to Newegg
                                         stockholders, are advisable and fair to and in the best interests of shareholders and
                                         unanimously recommends that shareholders vote &ldquo;FOR&rdquo; the approval of the merger
                                         proposal at the special meeting.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>Does our board of directors
                                         recommend that shareholders approve the disposition proposal?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>Yes. Each of the special committee and our board
                                         of directors unanimously determined that the disposition agreement and the transactions
                                         contemplated thereby are advisable and fair to and in the best interests of shareholders
                                         and unanimously recommends that shareholders vote &ldquo;FOR&rdquo; the approval of the
                                         disposition proposal at the special meeting.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B><I>Q:</I></B></FONT></TD>
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt"><B><I>Does our board of directors recommend that shareholders approve
    the redesignation proposal? </I></B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">A:</FONT></TD>
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">Yes. Each of the special committee and our board of directors unanimously
    determined that the redesignation is advisable and fair to and in the best interests of shareholders and unanimously recommends
    that shareholders vote &ldquo;FOR&rdquo; the approval of the redesignation proposal at the special meeting. </FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>Does our board of directors
                                         recommend that shareholders approve the share combination proposal?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>Yes. Each of the special committee and our board
                                         of directors unanimously determined that the share combination is advisable and fair
                                         to and in the best interests of shareholders and unanimously recommends that shareholders
                                         vote &ldquo;FOR&rdquo; the approval of the share combination proposal at the special
                                         meeting.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>Does our board of directors
                                         recommend that shareholders approve the share increase proposal?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>Yes. Each of the special committee and our board
                                         of directors unanimously determined that the share increase is advisable and fair to
                                         and in the best interests of shareholders and unanimously recommends that shareholders
                                         vote &ldquo;FOR&rdquo; the approval of the share increase proposal at the special meeting.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>Does our board of directors
                                         recommend that shareholders approve the name change proposal?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>Yes. Each of the special committee and our board
                                         of directors unanimously determined that the name change to &ldquo;Newegg Commerce, Inc.&rdquo;
                                         is advisable and fair to and in the best interests of shareholders and unanimously recommends
                                         that shareholders vote &ldquo;FOR&rdquo; the approval of the name change proposal at
                                         the special meeting.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>Does our board of directors
                                         recommend that shareholders approve the charter amendment proposal?</I></B></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">&nbsp;</TD><TD><B><I>&nbsp;</I></B></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>Yes. Each of the special committee and our board
                                         of directors unanimously determined that the amendment and restatement of our current
                                         amended and restated memorandum and articles of association to effect the redesignation,
                                         the share combination proposal, the share increase proposal and the name change proposal,
                                         as well as to make certain other amendments described in this proxy statement/prospectus,
                                         is advisable and fair to and in the best interests of shareholders and unanimously recommends
                                         that shareholders vote &ldquo;FOR&rdquo; the approval of the charter amendment proposal
                                         at the special meeting.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>Does our board of directors
                                         recommend that shareholders approve the adjournment proposal?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>Yes. Each of the special committee and our board
                                         of directors unanimously recommends that shareholders vote &ldquo;FOR&rdquo; the adjournment
                                         proposal.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>How do I vote my shares at
                                         the special meeting?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD><I>Via the Internet or by Telephone</I></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">If you hold shares directly in your name as a shareholder
of record, you may vote via the Internet or by telephone in accordance with the instructions on your proxy card. In order to submit
a proxy to vote via the Internet or by telephone, you will need the control number on your proxy card (which is unique to each
shareholder to ensure all voting instructions are genuine and to prevent duplicate voting). Votes may be submitted via the Internet
or by telephone 24 hours a day, seven days a week, and must be received by 11:59 p.m. (Eastern Time) on [&nbsp;&nbsp; ], 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">If you hold shares in &ldquo;street name,&rdquo;
meaning through a broker, bank or other nominee holder of record, you may vote via the Internet only if Internet voting is made
available by your broker, bank or other nominee holder of record. Please follow the voting instructions provided by your broker,
bank or other nominee holder of record with these materials.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><I>By Mail</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">If you hold shares directly in your name as a shareholder
of record, you may submit a proxy card to vote your shares by mail. You will need to complete, sign and date your proxy card and
return it using the postage-paid return envelope provided. Your proxy card must be received no later than the close of business
on [&nbsp;&nbsp; ], 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">If you hold shares in &ldquo;street name,&rdquo;
meaning through a broker, bank or other nominee holder of record, in order to provide voting instructions by mail, you will need
to complete, sign and date the voting instruction form provided by your broker, bank or other nominee holder of record with these
materials and return it in the postage-paid return envelope provided. Your broker, bank or other nominee holder of record must
receive your voting instruction form in sufficient time to vote your shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><I>In Person</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">If you hold shares directly in your name as a shareholder
of record, you may vote in person at the special meeting. Shareholders of record also may be represented by another person at
the special meeting by executing a proper proxy designating that person and having that proper proxy be presented to the judge
of election with the applicable ballot at the special meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">If you hold shares in &ldquo;street name,&rdquo;
meaning through a broker, bank or other nominee holder of record, you must obtain a proxy, executed in your favor, from the bank
or broker to be able to vote at the special meeting. To request a proxy executed in your favor, please contact your broker, bank
or other nominee holder of record.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><B>Please carefully consider the information contained
in this proxy statement/prospectus. Whether or not you plan to attend the special meeting, we encourage you to vote via the Internet,
by telephone or by mail so that your shares will be voted in accordance with your wishes even if you later decide to attend the
special meeting.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">We encourage you to register your vote via the Internet,
by telephone or by mail. If you attend the special meeting, you may also vote in person, in which case any votes that you previously
submitted&mdash;whether via the Internet, by telephone or by mail&mdash;will be revoked and superseded by the vote that you cast
at the special meeting. To vote in person at the special meeting, beneficial owners who hold shares in &ldquo;street name&rdquo;
through a broker, bank or other nominee holder of record will need to contact the broker, bank or other nominee holder of record
to obtain a written legal proxy to bring to the meeting. Whether your proxy is submitted via the Internet, by telephone or by
mail, if it is properly completed and submitted, and if you do not revoke it prior to or at the special meeting, your shares will
be voted at the special meeting in the manner specified by you, except as otherwise set forth in this proxy statement/prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>If my shares are held in
                                         &ldquo;street name,&rdquo; will my broker, bank or other nominee holder of record automatically
                                         vote my shares for me?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>No. If your shares are held in an account at
                                         a broker, bank or other nominee holder of record (i.e., in &ldquo;street name&rdquo;),
                                         you must instruct the broker, bank or other nominee holder of record on how to vote your
                                         shares. Your broker, bank or other nominee holder of record will vote your shares only
                                         if you provide instructions on how to vote by filling out the voting instruction form
                                         sent to you by your broker, bank or other nominee holder of record with this proxy statement/prospectus.
                                         Brokers, banks and other nominee holders of record who hold shares in &ldquo;street name&rdquo;
                                         typically have the authority to vote in their discretion on &ldquo;routine&rdquo; proposals
                                         when they have not received instructions on how to vote from the beneficial owner. However,
                                         brokers, banks and other nominee holders of record typically are not allowed to exercise
                                         their voting discretion on matters that are &ldquo;non-routine&rdquo; without specific
                                         instructions on how to vote from the beneficial owner. Each of the proposals to be considered
                                         at the special meeting as described in this proxy statement/prospectus are considered
                                         non-routine. Therefore brokers, banks and other nominee holders of record do not have
                                         discretionary authority to vote on any of these proposals.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">Broker non-votes are shares held by a broker, bank
or other nominee holder of record that are present in person or represented by proxy at the special meeting, but with respect
to which the broker, bank or other nominee holder of record is not instructed by the beneficial owner of such shares on how to
vote on a particular proposal and the broker does not have discretionary voting power on such proposal. Because brokers, banks
and other nominee holders of record do not have discretionary voting authority with respect to any of the proposals to be considered
at the special meeting as described in this proxy statement/prospectus, if a beneficial owner of shares held in &ldquo;street
name&rdquo; does not give voting instructions to the broker, bank or other nominee holder of record, then those shares will not
be present in person or represented by proxy at the special meeting. As a result, there will not be any broker non-votes in connection
with the proposals to be considered at the special meeting as described in this proxy statement/prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>How will my shares be represented
                                         at the special meeting?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>If you correctly submit your proxy via the Internet,
                                         by telephone, or by mail, the persons named in your proxy card will vote your shares
                                         in the manner you requested. If you sign your proxy card and return it without indicating
                                         how you would like to vote your shares, your proxy will be voted as our board of directors
                                         unanimously recommends, which is &ldquo;FOR&rdquo; each of the proposals.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>Can I revoke my proxy or
                                         change my voting instructions?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>Yes. You may revoke your proxy or change your
                                         vote in person at any time before the closing of the polls at the special meeting.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">If you are a shareholder of record at the record
date for the special meeting, you can revoke your proxy or change your vote by:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">sending
                                         a signed notice stating that you revoke your proxy to [&nbsp;&nbsp; ], that bears a date
                                         later than the date of the proxy you want to revoke and is received prior to the special
                                         meeting;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">submitting
                                         a valid, later-dated proxy via the Internet or by telephone before 11:59 p.m. (Eastern
                                         Time) on [&nbsp;&nbsp; ], 2020, or by mail that is received prior to the special meeting;
                                         or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">attending
                                         the special meeting (or, if the special meeting is adjourned or postponed, attending
                                         the adjourned or postponed meeting) and voting in person, which automatically will cancel
                                         any proxy previously given, or revoking your proxy in person, but your attendance alone
                                         will not revoke any proxy previously given.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">If you hold your shares in &ldquo;street name&rdquo;
through a broker, bank or other nominee holder of record, you must contact your brokerage firm, bank or other nominee holder of
record to change your vote or obtain a written legal proxy to vote your shares if you wish to cast your vote in person at the
special meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>What happens if I sell my
                                         shares after the record date but before the special meeting?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>The record date for the special meeting (the
                                         close of business on [&nbsp;&nbsp;], 2020) is earlier than the date of the special meeting.
                                         If you sell or otherwise transfer your shares after the record date but before the date
                                         of the special meeting, you will retain your right to vote at the special meeting.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>What do I do if I receive
                                         more than one set of voting materials?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>You may receive more than one set of voting materials,
                                         including multiple copies of this proxy statement/prospectus, the related proxy card
                                         or the voting instruction form. This can occur if you hold your shares in more than one
                                         brokerage account, if you hold shares directly as a record holder and also in &ldquo;street
                                         name,&rdquo; or otherwise through another nominee holder of record, and in certain other
                                         circumstances. If you receive more than one set of voting materials, please separately
                                         submit votes for each set of voting materials in order to ensure that all of your shares
                                         are voted.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>Are shareholders entitled
                                         to appraisal rights?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>No, shareholders are not entitled to dissenters&rsquo;
                                         rights of appraisal in connection with any of the proposals to be voted on at the special
                                         meeting.</TD>
</TR>     <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
<TD> <B><I>&nbsp;</I></B> </TD><TD STYLE="text-align: left"> <B><I>Q:</I></B> </TD><TD> <B><I>What are the reasons for the merger?</I></B> </TD></TR>
<TR STYLE="vertical-align: top">
<TD> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
<TD> &nbsp; </TD><TD STYLE="text-align: left"> A: </TD><TD><P STYLE="font: 10pt Times New Roman,serif; margin: 0"> In evaluating
                                         the merger, the special committee, in consultation with the Company&rsquo;s management,
                                         outside legal counsel and financial advisor, considered numerous positive factors relating
                                         to the merger, including: </P>
</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 12pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-top: 0; width: 0.25in; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">challenges
    facing the Company&rsquo;s current medical device business, including a history of significant operating losses and negative
    operating cash flows;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">challenges
    facing the Company in maintaining its competitive position in the highly competitive medical device market in China;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">challenges
    facing the Company regarding compliance with NASDAQ Listing Rules, including the minimum bid price and stockholders&rsquo;
    equity requirements;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    belief that other strategic alternatives available to the Company, such as continuing to develop its business through internal
    growth, were less advisable than the proposed merger under current circumstances;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    terms and conditions of the merger agreement and related transaction documents;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    positive financial condition, operating results and business outlook of Newegg as of the date of this proxy statement/prospectus;
    and</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-top: 0; padding-bottom: 0; font-family: Times New Roman,serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-top: 0; font: 11pt Calibri,sans-serif; padding-bottom: 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD>
    <TD STYLE="padding-top: 0; font: 11pt Calibri,sans-serif; padding-bottom: 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    fact that the special committee received and reviewed a fairness opinion from Benchmark affirming that the merger consideration
    to be paid by the Company was fair to the Company&rsquo;s shareholders from a financial point of view.</FONT> </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="margin-left: 0.25in; margin-top: 0; margin-bottom: 0"> The special committee also considered the risks and potentially
negative factors relating to the proposed merger, including: </P>

<P STYLE="margin-left: 0.25in; margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 12pt">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; padding-bottom: 0; font-family: Calibri,sans-serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="width: 0.25in; padding-bottom: 0; font-family: Calibri,sans-serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD>
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    possibility that the consummation of the merger may be delayed or not occur at all, and the adverse impact of such event would
    have on the Company and its business;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD>
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    significant costs involved in connection with completing the proposed merger, the substantial management time and effort required
    to complete the proposed merger and the related disruption to operations of the Company;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD>
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    potential liabilities that the Company may inherit from Newegg as a result of the proposed merger that would not be covered
    by the indemnities in the merger agreement;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD>
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
    risk that the anticipated benefits of the proposed merger may not be realized; and </FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD>
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD>
    <TD STYLE="padding-bottom: 0; font-family: Calibri,sans-serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">other
    risks described under the section &ldquo;Risk Factors&rdquo; below. </FONT> </TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<P STYLE="margin-top: 0; margin-bottom: 0"> </P>

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<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<P STYLE="margin-left: 0.25in; margin-top: 0; margin-bottom: 0"> The special committee believed that, overall, the potential
benefits of the merger to the Company&rsquo;s shareholders outweighed the risks and uncertainties of the merger. </P>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%">                                                                                                                                      <TR STYLE="vertical-align: top">
<TD STYLE="width: 0"> <B><I>&nbsp;</I></B> </TD><TD STYLE="text-align: left; width: 0.25in"> <B><I>Q:</I></B> </TD><TD> <B><I>What
                                         are the reasons for the disposition?</I></B> </TD></TR>
<TR STYLE="vertical-align: top">
<TD> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
<TD> &nbsp; </TD><TD STYLE="text-align: left"> A: </TD><TD><P STYLE="font: 10pt Times New Roman,serif; margin: 0"> The Company, through its wholly owned subsidiaries, has been
                                                                     engaged in the medical device business. The Company develops and distributes medical devices, with a focus on sleep
                                                                     respiratory solutions to Obstructive Sleep Apnea Syndrome, or OSAS, since 2010. Starting from 2018, the Company has been
                                                                     providing examination services to hospitals and medical centers through its proprietary medical wearable devices, and doctors
                                                                     are able to refer to examination results provided by such devices in making diagnoses regarding OSAS. </P>
</TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top"><TD><P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 0 0.25in"> The
                                         Company has incurred significant operating losses for the past five years. For the years
                                         ended December 31, 2015, 2016, 2017, 2018 and 2019, the Company incurred operating losses
                                         of approximately $6.9 million, $9.1 million, $5.1 million, $9.3 million and $3.8 million, respectively.
                                         As of December 31, 2019, the Company had an accumulated deficit of approximately $44.6
                                         million and negative shareholders&rsquo; equity of approximately $1.3 million. In addition,
                                         in 2019, the Company terminated the employment of over fifty employees and had only 28
                                         employees as of December 31, 2019. </P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 0 0.25in"> &nbsp; </P>
<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 0 0.25in"> On September 11, 2019, we received a notification letter
from the NASDAQ Listing Qualifications Staff of the NASDAQ Stock Market LLC, or NASDAQ, notifying us that the minimum bid price
per share for our common shares had been below $1.00 for a period of 30 consecutive business days, and therefore, we no longer
met the minimum bid price requirement set forth in NASDAQ Listing Rule 5550(a)(2). We were granted a compliance period of 180
days, or until March 9, 2020 to regain compliance. </P>
<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 0 0.25in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 0 0.25in"> On January 2, 2020, we received another notification letter
from the NASDAQ Listing Qualifications Staff notifying us that we no longer complied with the minimum of $2.5 million in stockholders&rsquo;
equity for continued listing on the NASDAQ Capital Market under NASDAQ&rsquo;s Listing Rule 5550(b)(1) and that we also did not
comply with either of the two alternative standards of Listing Rule 5550(b), the market value standard and the net income standard.
We thereafter submitted a plan to regain compliance with NASDAQ&rsquo;s applicable listing standards. On March 10, 2020, in consideration
of our recent three financings, from which we received gross proceeds of approximately $8.08 million, the NASDAQ Listing Qualifications
Staff determined that we comply with the stockholders&rsquo; equity requirement set forth in Listing Rule 5550(b)(1). On the same
date, given that except the minimum bid price requirement, we met all other applicable requirements for initial listing on the
NASDAQ Capital Market, the NASDAQ Listing Qualifications Staff recognized our intention of curing the bid price deficiency by
effecting a reverse stock split, and granted a second compliance period of 180 days, or until September 8, 2020, to regain compliance.
The second compliance period was thereafter extended to November 20, 2020 by NASDAQ per SR-NASDAQ-2020-021. On October 21, 2020,
we effectuated a share combination of our common shares at a ratio of one-for-eight in order to increase the per share trading
price of our Class A common shares to satisfy the $1.00 minimum bid price requirement. We regained the compliance with the minimum
bid price rule on November 10, 2020. However, there is no assurance that we will be able to continue to maintain our compliance
with the NASDAQ continued listing requirements. If we fail to do so, our Class A common shares may lose their status on NASDAQ
Capital Market and they would likely be traded on the over-the-counter market. </P>

<P STYLE="margin: 0 0 0 0.25in"> &nbsp; </P>
<P STYLE="margin: 0 0 0 0.25in"> Given the significant amount of liabilities incurred by our medical device business, the board
decided that a plausible way to return to profitability and maintain our NASDAQ listing status is to dispose of the medical device
business and concurrently complete the merger with Newegg. </P></TD></TR></TABLE>


<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%">
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>What will Newegg stockholders
                                         receive in the merger?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>If the&nbsp;merger&nbsp;is completed, each share
                                         of the capital stock of Newegg that was issued and outstanding immediately prior to the
                                         effective time of the&nbsp;merger will be converted into the right to receive 5.8417 common
                                         shares of the Company (which we refer to as the exchange ratio), plus the right, if any,
                                         to receive cash in lieu of fractional shares of the Company (which we collectively refer
                                         to as the merger consideration); provided that the exchange ratio shall be appropriately
                                         adjusted to reflect the effect of any share split, split-up, reverse share split, share
                                         dividend or distribution of securities convertible into the Company&rsquo;s common shares
                                         or Newegg&rsquo;s capital stock or any reorganization, recapitalization, reclassification
                                         or other like change with respect to Company&rsquo;s common shares or Newegg&rsquo;s
                                         capital stock having a record date occurring on or after the date of the merger agreement
                                         and prior to the completion of the merger.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 0pt 0.25in"> We estimate that we may issue approximately 363,325,542
common shares to Newegg stockholders upon completion of the merger, based on the number of shares of Newegg issued and outstanding
as of December 22, 2020, the most recent practicable date for which such information was available. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%">                                                                                                                                      <TR STYLE="vertical-align: top">
<TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Q:</I></B></FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Will
                                         I experience dilution of my ownership as a result of the merger?</I></B></FONT> </TD></TR>
<TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
<TD> &nbsp; </TD><TD STYLE="text-align: left"> A: </TD><TD> Yes. Based on the number of our common shares and Newegg stock outstanding
                                         as of December 22, 2020, immediately following the completion of merger, our shareholders
                                         immediately prior to the merger are expected to own approximately 0.98% of our outstanding
                                         common shares and former Newegg stockholders are expected to own approximately 99.02%
                                         of our outstanding common shares (on a fully-diluted basis), resulting in substantial
                                         dilution to our current shareholders. According to the analysis made by The Benchmark
                                         Company, LLC, or Benchmark, our financial advisor, the implied value of 0.98% ownership
                                         is estimated to be between $8.8 million and $18.1 million based on Newegg&rsquo;s valuation
                                         range. See &ldquo;Proposal I: The Merger&mdash;Reports, Opinions and Appraisals&rdquo;
                                         for more information about our estimated equity value. </TD></TR>
<TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
<TD><B><I>&nbsp;</I></B></TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Q:</I></B></FONT> </TD><TD> <B><I>What
                                         are the financial terms of the disposition?</I></B> </TD></TR>
<TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
<TD> &nbsp; </TD><TD STYLE="text-align: left"> A: </TD><TD> Pursuant to the disposition agreement, the Purchaser will
                                         acquire 100% of the equity interests in Lianluo Connection for RMB0. In exchange for
                                         all of the equity interests in Lianluo Connection, the Purchaser agreed to contribute
                                         RMB87.784 million to Lianluo Connection&rsquo;s registered capital by September 23, 2023
                                         in accordance with the articles of association of Lianluo Connection. In addition, as
                                         an inducement for the Purchaser entering into the disposition agreement, the Company
                                         agreed to convert the indebtedness in the aggregate amount of $11,255,188.47 that Lianluo
                                         Connection owes to the Company into additional paid-in capital of Lianluo Connection immediately
                                         prior to the closing of the disposition. </TD></TR>
<TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
<TD><B><I>&nbsp;</I></B></TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Q:</I></B></FONT> </TD><TD> <B><I>Will
                                         the Company&rsquo;s business change upon completion of the merger and the disposition?</I></B> </TD></TR>
<TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD STYLE="text-align: left"> A: </TD><TD> Yes. Following completion of the merger and the disposition, the
                                         Company will no longer be engaged in the medical device business. Instead, the business
                                         of Newegg will become the Company&rsquo;s business. Newegg is a tech-focused e-commerce
                                         company in North America, and ranked second after Best Buy as the global top electronics
                                         online marketplace <FONT STYLE="font-family: Times New Roman,serif; font-size: 10pt">according
                                         to Web Retailer&rsquo;s report, as measured by 32.4 million visits per month in 2019.
                                         Through newegg.com and other online platforms, Newegg operates a direct sales and marketplace
                                         models for IT computer components, consumer electronics, entertainment, smart home and
                                         gaming products and provides certain third party logistics services globally. See &ldquo;Information
                                         About Newegg&rdquo; for more information about our business following completion of the
                                         merger and the disposition. </FONT> </TD></TR>
<TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"> <B><I>Q:</I></B> </TD><TD><P STYLE="margin: 0; font: 10pt Times New Roman,serif"> <B><I>What
                                         will happen if the merger and disposition are not completed?</I></B> </P></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"> A: </TD><TD><P STYLE="font: 10pt Times New Roman,serif; margin: 0"> If
                                         the merger and the disposition are not approved by the shareholders or if the merger
                                         and the disposition are not completed for any other reason, the Company will remain a
                                         public company, and our Class A common shares will continue to be listed and traded on
                                         NASDAQ (assuming the Company meets all of NASDAQ&rsquo;s continued listing standards).
                                         In addition, our management expects that the business will be operated as how it is currently
                                         being operated until we pursue another strategic alternative, and that our shareholders
                                         will continue to be subject to the same risks and opportunities to which they are currently
                                         subject. </P></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"> Furthermore, if the merger and the disposition
are not completed, and depending on the circumstances that would have caused the merger and the disposition not to be completed,
the price of our Class A common shares may decline. If that were to occur, it is uncertain when, if ever, the price of our Class
A common shares would return to the price at which it trades as of the date of this proxy statement/prospectus. Accordingly, if
the merger and the disposition are not completed, there can be no assurance as to the effect of these risks and opportunities
on the future value of your Class A common shares. If the merger and the disposition are not completed, the board will continue
to evaluate and review the Company&rsquo;s business operations, properties, dividend policy and capitalization, among other things,
make such changes as deemed appropriate and continue to seek to identify strategic alternatives to enhance shareholder value. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">In addition, if the merger agreement is terminated
under specified circumstances, we may be required to pay Newegg a termination fee of up to $450,000 or Newegg may be required
to pay us a termination fee of up to $450,000, depending on the circumstances of the termination. See &ldquo;The Merger Agreement&mdash;Termination
Fees and Expenses&rdquo; for a more detailed discussion of the termination fees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>Is completion of the merger
                                         subject to any conditions?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>Yes. The Company and Newegg are not required
                                         to complete the merger unless a number of conditions are satisfied (or, to the extent
                                         permitted by applicable law, waived). These conditions include the approval of the proposals
                                         described in this proxy statement/prospectus by our shareholders, and the satisfaction
                                         (or waiver, to the extent permitted by applicable law) of the other conditions that must
                                         be satisfied (or, to the extent permitted by applicable law, waived) prior to completion
                                         of the merger. For a complete summary of the conditions that must be satisfied (or, to
                                         the extent permitted by applicable law, waived) prior to completion of the merger, see
                                         &ldquo;The Merger Agreement&mdash;Conditions to Completion of the Merger.&rdquo;</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>Is completion of the disposition
                                         subject to any conditions?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>Yes. The parties are not required to complete
                                         the deposition unless a number of conditions are satisfied (or, to the extent permitted
                                         by applicable law, waived). These conditions include the closing of the merger, the shareholders&rsquo;
                                         approval of the disposition, and the satisfaction (or waiver, to the extent permitted
                                         by applicable law) of the other conditions that must be satisfied (or, to the extent
                                         permitted by applicable law, waived) prior to completion of the disposition. For a complete
                                         summary of the conditions that must be satisfied (or, to the extent permitted by applicable
                                         law, waived) prior to completion of the disposition, see &ldquo;The Disposition Agreement&mdash;Conditions
                                         to Completion of the Disposition.&rdquo;</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>When do you expect to complete
                                         the merger and disposition?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>As of the date of this proxy statement/prospectus,
                                         we expect to complete the merger and the disposition in the first quarter of 2021, subject
                                         to the satisfaction of the conditions described elsewhere in this proxy statement/prospectus.
                                         However, no assurance can be given as to when, or if, the merger and disposition will
                                         be completed.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>What do I need to do now?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>Carefully read and consider the information contained
                                         in and incorporated by reference into this proxy statement/prospectus, including its
                                         annexes. Then, please vote your shares, which you may do by:</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">completing,
                                         dating, signing and returning the enclosed proxy card;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">submitting
                                         your proxy via the Internet or by telephone by following the instructions included on
                                         your proxy card; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">attending
                                         the special meeting and voting by ballot in person.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">If you hold shares in &ldquo;street name&rdquo;
through a broker, bank or other nominee holder of record, please instruct your broker, bank or other nominee holder of record
to vote your shares by following the instructions that the broker, bank or other nominee holder of record provides to you with
these materials.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>Q:</I></B></TD><TD><B><I>Who should I call with questions?</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">A:</TD><TD>If you have any questions concerning the special
                                         meeting, any of the proposals to be considered at the special meeting, or the accompanying
                                         proxy statement/prospectus, or if you need help voting your shares, please contact:</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Lianluo Smart Limited</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Room 611, 6th Floor, BeiKong Technology
Building</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">No. 10 Baifuquan Road, Changping District</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Beijing 102200</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">People&rsquo;s Republic of China</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Attention: Corporate Secretary</P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">Telephone: 86-10-89788107</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>


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<DIV STYLE="padding: 5; border: Black 1.5pt solid"><P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="al_002"></A>SUMMARY</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This summary highlights selected information from this proxy
statement/prospectus. It may not contain all of the information that is important to you. You are urged to carefully read the
entire proxy statement/prospectus and the other documents attached to or referred to in this proxy statement/prospectus in order
to fully understand the merger agreement, the disposition agreement, the proposed merger, the proposed disposition and the other
proposals to be considered at the special meeting. Each item in this summary refers to the page of this proxy statement/prospectus
on which that subject is discussed in more detail.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><A NAME="al_003"></A>The Companies <FONT STYLE="font-size: 10pt">(See
Page 66)</FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Lianluo Smart Limited </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company, through its wholly owned subsidiaries in the People&rsquo;s
Republic of China (which we refer to as the PRC or China), has been engaged in the medical device business, currently focusing
on the development, production and marketing of sleep respiratory analysis system and cardiopulmonary resuscitation devices in
China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company has developed and distributed medical devices,
with a focus on sleep respiratory solutions for the Obstructive Sleep Apnea Syndrome, or OSAS, since 2010. The Company provides
users with medical grade detection and monitoring, long-distance treatment and integration solutions of professional rehabilitation.
Since 2018, the Company has been providing examination services to hospitals and medical centers through its proprietary medical
wearable devices, and doctors are able to refer to examination results provided by such devices in making diagnoses regarding
OSAS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company was incorporated pursuant to the laws of the British
Virgin Islands, or BVI, on July 22, 2003 under the name &ldquo;De-Haier Medical Systems Limited.&rdquo; It changed its name to
&ldquo;Lianluo Smart Limited&rdquo; on November 21, 2016. As a holding company, the Company does not conduct business in China
and instead relies on Lianluo Connection, and prior to August 2020, Beijing Dehaier Medical Technology Company Limited, or Beijing
Dehaier, to operate in China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company&rsquo;s Class A common shares are listed on the
NASDAQ Capital Market under the symbol &ldquo;LLIT.&rdquo; The Company&rsquo;s principal executive offices are located at Room
611, 6th Floor, BeiKong Technology Building, No. 10 Baifuquan Road, Changping District, Beijing 102200,&nbsp;People&rsquo;s Republic
of China, and its telephone number is +86-10-89788107. Information on the Company&rsquo;s website is not incorporated by reference
into or otherwise part of this proxy statement/prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On October 21, 2020, we completed a share combination of our
common shares at a ratio of one-for-eight, which decreased our outstanding Class A common shares from 17,685,475 shares to 2,210,683
shares and our outstanding Class B common shares from 11,111,111 shares to 1,388,888 shares. This share combination also decreased
our authorized shares to 6,250,000 common shares of par value of $0.021848 each, of which 4,736,111 are designated as Class
A common shares and 1,513,889 are designated as Class B common shares. Accordingly, except as otherwise indicated, all share and
per share information contained in this proxy statement/prospectus has been restated to retroactively show the effect of this
share combination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">See &ldquo;Information about the Company&rdquo; and &ldquo;Management
Discussion and Analysis of Financial Condition and Results of Operations for the Company&rdquo; for important business and financial
information regarding the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Lightning Delaware Sub, Inc.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Merger Sub was formed in the State of Delaware on September
23, 2020 and is a wholly owned subsidiary of the Company. Merger Sub was formed solely for the purpose of completing the merger.
Merger Sub has not carried on any activities to date, except for activities incidental to its formation and activities undertaken
in connection with the merger agreement and the merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Merger Sub is a privately-held corporation and its securities
do not trade on any marketplace. The principal executive offices of Merger Sub are located at c/o the Company, Room 611, 6th Floor,
BeiKong Technology Building, No. 10 Baifuquan Road, Changping District, Beijing 102200, People&rsquo;s Republic of China, and
its telephone number is +86-10-89788107.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<DIV STYLE="padding: 5; border: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Newegg Inc. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg is a tech-focused e-commerce company in North
America, and ranked second after Best Buy as the global top electronics online marketplace according to Web Retailer&rsquo;s report, as measured by 32.4 million
visits per month in 2019. Through newegg.com and other online platforms, Newegg operates a direct sales and marketplace
models for IT computer components, consumer electronics, entertainment, smart home and gaming products and provides certain
third party logistics services globally.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg is a privately-held corporation and its securities do
not trade on any marketplace. The principal executive offices of Newegg are located at 17560 Rowland Street, City of Industry,
CA 91748, and its telephone number is 626-271-9700. Newegg maintains a website at www.newegg.com. Information on Newegg&rsquo;s
website is not incorporated by reference into or otherwise part of this proxy statement/prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">See &ldquo;Information about Newegg&rdquo; and &ldquo;Management
Discussion and Analysis of Financial Condition and Results of Operations for Newegg&rdquo; for important business and financial
information regarding Newegg.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><A NAME="al_004"></A>The Merger <FONT STYLE="font-size: 10pt">(See
Page 71) </FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The merger agreement provides for the merger, in which Merger
Sub will be merged with and into Newegg, with Newegg surviving the merger as a wholly owned subsidiary of the Company.</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0"> Upon closing of the Merger, Mr. Zhitao He and Mr. Fred Chang will own
approximately 61.16% and 36.11%, respectively, of the voting power of our issued and outstanding common shares, and 97.26%, collectively.
Moreover, Mr. Zhitao He and Mr. Fred Chang, both of whom will serve as our directors upon closing, will be able to exercise substantial
influence over our business and operations. They may also have a conflict of interests with the minority shareholders. Where those
conflicts exist, the minority shareholders will be dependent upon Mr. He, Mr. Chang, and other directors exercising, in a manner
fair to all of our shareholders, their fiduciary duties. Also, Mr. He and Mr. Chang will have the ability to control the outcome
of most corporate actions requiring shareholder approval, including the sale of all or substantially all of our assets and amendments
to our Memorandum and Articles of Association. Moreover, such concentration of voting power could have the effect of delaying,
deterring, or preventing a change of control or other business combination, which may, in turn, have an adverse effect on the
market price of our shares or prevent our minority shareholders from realizing a premium over the then-prevailing market price
for their shares. </P>
<P STYLE="font: 10pt Times New Roman,serif; margin: 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The merger will be completed and become effective at such time
as the certificate of merger for the merger is filed with the Secretary of State of the State of Delaware (or at such time as
agreed to between the Company and Newegg and specified in such certificate of merger in accordance with applicable law). Unless
another date and time are agreed to by the Company and Newegg, completion of the merger will occur no earlier than the second
business day following the day on which the last of the conditions described in this proxy statement/prospectus is to be satisfied
or waived (other than those conditions that by their nature are to be satisfied at the closing of the merger, but subject to the
satisfaction or waiver of such conditions).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of the date of this proxy statement/prospectus, we expect
that the merger will be completed in the first quarter of 2021. However, completion of the merger is subject to the satisfaction
or waiver of the conditions to completion of the merger, which are summarized below. There can be no assurances as to when, or
if, the merger will occur. If the merger is not completed on or before April 30, 2021 or June 30, 2021, if extended under certain
circumstances, either the Company or Newegg may terminate the merger agreement. The right to terminate the merger agreement if
the merger is not completed on or prior to such date will not be available to either of the Company or Newegg if the failure of
the merger to be consummated by such date is due to a material breach by such party of any representation, warranty, covenant
or other agreement of such party set forth in the merger agreement. See &ldquo;The Merger Agreement&mdash;Conditions to Completion
of the Merger&rdquo; and &ldquo;The Merger Agreement&mdash;Termination of the Merger Agreement.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Upon the completion of the merger, the principal executive
offices of the Company will be located at 17560 Rowland Street, City of Industry, CA 91748 and its telephone number will be 626-271-9700.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> A copy of the merger agreement, as amended to the date of
this proxy statement/prospectus, is attached as Annex A to this proxy statement/prospectus. <B>You should read the merger agreement
carefully because it is the legal document that governs the merger. </B> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P></DIV>

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<DIV STYLE="border: Black 1.5pt solid; padding: 5"><P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B>The Disposition <FONT STYLE="font-size: 10pt">(See Page
96)</FONT></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT> </P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 10pt"> Pursuant to the disposition agreement, the Purchaser will
acquire 100% of the equity interests in Lianluo Connection for RMB0 immediately following completion of the merger. In
exchange for all of the equity interests in Lianluo Connection, the Purchaser agreed to contribute RMB87.784 million to
Lianluo Connection&rsquo;s registered capital by September 23, 2023 in accordance with the articles of association of Lianluo
Connection. In addition, as an inducement for the Purchaser entering into the disposition agreement, the Company agreed to
convert the indebtedness in the aggregate amount of $11,255,188.47 that Lianluo Connection owes to the Company into
additional paid-in capital of Lianluo Connection immediately prior to the closing of the disposition. The disposition will be
completed and become effective immediately following completion of the merger. </P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0"> A copy of the disposition agreement, as amended to the date of this
proxy statement/prospectus, is attached as Annex E to this proxy statement/prospectus. <B>You should read the disposition agreement
carefully because it is the legal document that governs the disposition.</B> <B> </B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><A NAME="al_005"></A>Special Meeting of Shareholders <FONT STYLE="font-size: 10pt">(See
Page 67) </FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Meeting</I></B>. The special meeting will be held on
[&nbsp;&nbsp; ], 2020 at 10:00 a.m., local time, at our offices located at Room 611, 6th Floor, BeiKong Technology Building, No.
10 Baifuquan Road, Changping District, Beijing, 102200, People&rsquo;s Republic of China. At the special meeting, shareholders
will be asked to consider and vote on the merger proposal, the disposition proposal, the redesignation proposal, the share
combination proposal, the share increase proposal, the name change proposal, the charter amendment proposal and the adjournment
proposal. Under our amended and restated memorandum and articles of association, the business to be conducted at the special meeting
will be limited to the proposals set forth in the notice to shareholders provided with this proxy statement/prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Record Date</I></B>. Our board of directors has fixed
the close of business on [&nbsp;&nbsp; ], 2020 as the record date for determination of the shareholders entitled to vote at the
special meeting, or any adjournment or postponement thereof. Only shareholders of record at the record date are entitled to receive
notice of, and to vote at, the special meeting, or any adjournment or postponement thereof. As of the close of business on the
record date, there were [&nbsp;&nbsp; ] Class A common shares and [&nbsp;&nbsp; ] Class B common shares outstanding and entitled
to vote at the special meeting. Each Class A common share is entitled to one vote per share and each Class B common share is entitled
to ten votes per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Quorum</I></B>. The presence at the commencement of the
special meeting, in person or by proxy, of not less than 50% of the votes of the common shares issued and outstanding and entitled
to vote constitutes a quorum for the special meeting. Abstentions will be deemed present at the special meeting for the purpose
of determining the presence of a quorum. Shares held in &ldquo;street name&rdquo; with respect to which the beneficial owner fails
to give voting instructions to the broker, bank or other nominee holder of record will not be deemed present at the special meeting
for the purpose of determining the presence of a quorum. Shares held in &ldquo;street name&rdquo; with respect to which the beneficial
owner fails to give voting instructions to the broker, bank or other nominee holder of record on any of the proposals to be voted
on at the special meeting, and shares with respect to which the beneficial owner otherwise fails to vote, will not be deemed present
at the special meeting for the purpose of determining the presence of a quorum. Accordingly, we encourage you to provide voting
instructions to your broker, whether or not you plan to attend the special meeting. <B>There must be a quorum to hold the special
meeting. Failure of a quorum to be present at the special meeting will necessitate an adjournment of the meeting and will subject
us to additional expense.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Required Vote</I></B>. Assuming that a quorum is present,
approval of the merger proposal, the disposition proposal, the redesignation proposal, the share combination proposal, the
share increase proposal, the name change proposal and the charter amendment proposal each requires the affirmative vote of both
(i) a majority of the votes cast at the special meeting and (ii) a majority of the votes cast at the special meeting which are
not beneficially owned by Hangzhou Lianluo. In addition, assuming that a quorum is present, approval of the redesignation proposal
also requires the affirmative vote of a majority of the issued and outstanding Class B common shares entitled to vote and voting
on that proposal at the special meeting. The affirmative vote of a majority of the votes cast at the special meeting is required
to approve the adjournment proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Share Ownership of and Voting by Directors and Executive
Officers</I></B>. At the record date for the special meeting (the close of business on [&nbsp;&nbsp; ], 2020), our directors and
executive officers and their affiliates beneficially owned and had the right to vote in the aggregate [&nbsp;&nbsp; ] common shares,
which represents approximately [&nbsp;&nbsp; ]% of the common shares entitled to vote as of that date. It is expected that our
directors and executive officers and their affiliates will vote their shares for each of the proposals at the time of the special
meeting.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><A NAME="al_006"></A>What Newegg Stockholders Will Receive
in the Merger <FONT STYLE="font-size: 10pt">(See Page xii) </FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If the&nbsp;merger&nbsp;is completed, each share of the capital
stock of Newegg that was issued and outstanding immediately prior to the effective time of the&nbsp;merger will be converted into
the right to receive 5.8417 common shares of the Company (which we refer to as the exchange ratio), plus the right, if any, to receive
cash in lieu of fractional shares of the Company (which we collectively refer to as the merger consideration); provided that the
exchange ratio shall be appropriately adjusted to reflect the effect of any share split, split-up, reverse share split, share
dividend or distribution of securities convertible into the Company&rsquo;s common shares or Newegg&rsquo;s capital stock or any
reorganization, recapitalization, reclassification or other like change with respect to Company&rsquo;s common shares or Newegg&rsquo;s
capital stock having a record date occurring on or after the date of the merger agreement and prior to the completion of the merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Although the exchange ratio for the&nbsp;merger&nbsp;consideration
is fixed (subject to the adjustments described above), the market value of the&nbsp;merger&nbsp;consideration will fluctuate with
the market price of our Class A common shares. Based on the closing price on October 23, 2020, the last trading day before the public
announcement of the signing of the&nbsp;merger agreement, the implied aggregate value of the&nbsp;merger&nbsp;consideration is
approximately $1.18 billion. Based on the closing price on [&nbsp;&nbsp; ], 2020, the last
practicable date before the date of the accompanying proxy statement/prospectus, the implied aggregate value of the&nbsp;merger&nbsp;consideration
will be up to approximately $[&nbsp;&nbsp; ] million.&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><A NAME="al_007"></A>Treatment of Newegg Equity Awards (See
Page 84) </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The terms of the equity-based compensation issued by Newegg
prior to the merger will be assumed by the Company. The shares of common stock that are issued or may be issued under Newegg&rsquo;s
Incentive Award Plan and Significant Shareholder Incentive Plan will be exchanged for our common shares, adjusted for the exchange
ratio, but otherwise on the same terms and conditions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><A NAME="al_008"></A>Recommendations of the Board and
its Reasons for the Merger and the Disposition <FONT STYLE="font-size: 10pt">(See Pages 73 and 96)</FONT></B> </P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0"> Each of the special committee and our board of directors unanimously
determined that the merger agreement and the transactions contemplated thereby, including the issuance of common shares in connection
with the merger, and the disposition agreement and the transactions contemplated thereby are advisable and fair to and in the
best interests of shareholders and unanimously recommended that shareholders vote &ldquo;FOR&rdquo; the merger proposal and &ldquo;FOR&rdquo;
the disposition proposal. For the factors considered by the special committee and the board of directors in reaching this decision,
see &ldquo;Proposal I: The Merger&mdash;Reasons for the Merger&rdquo; and &ldquo;Proposal II: The Disposition&mdash;Reasons and
Background for the Proposed Disposition.&rdquo; </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><A NAME="al_009"></A>Ownership of Common Shares After the
Merger (See Page 79) </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> We estimate that we may issue approximately 363,325,542
common shares to Newegg stockholders upon completion of the merger, based on the number of shares of Newegg issued and outstanding
as of December 22, 2020, the most recent practicable date for which such information was available. Based on the number of our
common shares and Newegg stock outstanding as of such date, immediately following the completion of merger, our shareholders immediately
prior to the merger are expected to own approximately 0.98% of our outstanding common shares and former Newegg stockholders are
expected to own approximately 99.02% of our outstanding common shares (on a fully-diluted basis). </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>
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<DIV STYLE="padding: 5; border: Black 1.5pt solid"><P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><A NAME="al_010"></A>Opinions of Financial Advisor <FONT STYLE="font-size: 10pt">(See
Pages 74 and 96)</FONT></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><FONT STYLE="font-size: 10pt">&nbsp;</FONT></B></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 10pt"> The Company engaged The Benchmark Company, LLC, or
Benchmark, to render opinions as to whether the merger consideration&nbsp;to be paid and the disposition consideration to be
received by the Company are fair to the Company&rsquo;s shareholders from a financial point of view. Benchmark rendered its
written opinions to the special committee on October 23, 2020 that merger consideration to be paid and the disposition
consideration to be  received by the Company were fair to the Company&rsquo;s shareholders from a financial point of
view.&nbsp; </P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0"> The full text of Benchmark&rsquo;s written opinions, dated October
23, 2020, which describes the assumptions made and limitations upon the review undertaken by Benchmark in preparing its opinions
for the merger and the disposition are attached hereto as Annexes D and F, respectively, and are incorporated by reference herein.
You should read the opinions carefully in their entirety. </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><A NAME="al_011"></A>Interests of Directors and Executive
Officers in the Merger and the Disposition <FONT STYLE="font-size: 10pt">(See Pages 79 and 101)</FONT>&nbsp;</B> </P>

<P STYLE="font: 12pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In considering the recommendations of the special committee
and the board to vote for the merger proposal, you should be aware that certain of the current directors, executive officers and
major shareholders of the Company and Newegg have interests in the merger that may be different from, or in addition to, the interests
of our unaffiliated shareholders generally and may create potential conflicts of interest. These interests are described in more
detail below. The special committee was aware of each of these interests in reviewing, considering and negotiating the terms of
the proposed merger and in recommending that the board and the shareholders approve the proposed merger. The board was also aware
of these interests in approving the merger agreement and the transactions thereby and in recommending the approval of the merger
agreement to our shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Mr.&nbsp;Zhitao He, our former Chairman and Chief Executive
Officer, who also controls approximately 86.6% of our total voting power, also serves on the board of Newegg and, through Digital
Grid (Hong Kong) Technology Co., Limited, or Digital Grid, beneficially owns a majority of the equity interests in Newegg. Ms.
Yingmei Yang, our Interim Chief Financial Officer and one of directors, also serves on the board of Newegg.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The merger agreement provides that all of Newegg&rsquo;s shareholders,
including Digital Grid, will receive common shares. Following the merger, Mr. Zhitao He will beneficially own approximately 224,269,418
common shares, representing approximately 61.12% of our total voting power.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 10pt"> The Company&rsquo;s directors and executive officers do not presently
have any interest in the disposition that is not shared with the shareholders of the Company. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><A NAME="al_012"></A>Dissenters&rsquo; Rights Available
to Shareholders <FONT STYLE="font-size: 10pt">(See Pages 82 and 101)</FONT></B> </P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0"> Under BVI law, shareholders will not be entitled to appraisal or dissenters&rsquo;
rights in connection with the merger or the disposition. </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><A NAME="al_013"></A>Completion of the Merger is Subject
to Certain Conditions (See Page 83) </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The obligation of each of the Company, Newegg and Merger Sub
to complete the merger is subject to the fulfillment (or waiver, to the extent permissible under applicable law) of the following
conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">the shareholders of the Company
                                         shall have approved the merger, the disposition and the other proposals set forth herein,
                                         which shall in all cases include approval of a majority of votes cast which are not beneficially
                                         owned by Hangzhou Lianluo;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">all consents or filings required
                                         to be obtained from or made with any governmental authority or third parties in order
                                         to consummate the transactions contemplated by the merger agreement shall have been obtained
                                         or made;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">no governmental authority shall
                                         have enacted, issued, promulgated, enforced or entered any law (whether temporary, preliminary
                                         or permanent) or order that is then in effect and which has the effect of making the
                                         transactions or agreements contemplated by the merger agreement or the disposition agreement
                                         illegal or which otherwise prevents or prohibits consummation of the transactions contemplated
                                         by the merger agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">there shall not be any pending
                                         action brought by a third-party non-affiliate to enjoin or otherwise restrict the consummation
                                         of the merger or the disposition;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">the persons identified by Newegg
                                         shall have been elected or appointed to the Company&rsquo;s board of directors;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in"></P>
</div>
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<DIV STYLE="padding: 5; border: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">all of the conditions to the
                                         obligations of each party to consummate the disposition described in the disposition
                                         agreement shall have been satisfied;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">Benchmark
                                         shall have delivered its fairness opinion to the Company&rsquo;s board;</P></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">amendment to certain stockholder agreement, dated March 30, 2017, between Newegg and certain stockholders
of Newegg that is being entered into concurrently with the merger agreement shall be in full force and effect and shall be assigned
from Newegg to LLIT at the closing of the merger;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">the registration statement of
                                         which this proxy statement/prospectus forms a part shall have become effective under
                                         the Securities Act and shall not be the subject of any stop order or proceedings seeking
                                         a stop order;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">the registration statement on
                                         Form F-1 relating to a public offering of common shares of the Company shall have become
                                         effective under the Securities Act and shall not be the subject of any stop order or
                                         proceedings seeking a stop order; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">the foregoing offering and the deposition are capable of being consummated on the closing date.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, the obligation of Newegg to complete the merger
is subject to the satisfaction (or waiver, to the extent permitted by applicable law) of the following conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>all of the representations and warranties of the Company
                                         and the Merger Sub set forth in the merger agreement and in any certificate delivered
                                         by the Company and the Merger Sub pursuant thereto shall be true and correct on and as
                                         of the date of the agreement and on and as of the completion date of the merger as if
                                         made on the completion date, except for (i) those representations and warranties that
                                         address matters only as of a particular date (which representations and warranties shall
                                         have been accurate as of such date), and (ii) any failures to be true and correct that
                                         (without giving effect to any qualifications or limitations as to materiality or material
                                         adverse effect), individually or in the aggregate, have not had and would not reasonably
                                         be expected to have a material adverse effect on, or with respect to, the Company and
                                         its subsidiaries or materially and adversely affects the Company and the Merger Sub&rsquo;s
                                         ability to consummate the transactions contemplated by the merger agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the Company and the Merger Sub shall have performed in
                                         all material respects all of such party&rsquo;s obligations and complied in all material
                                         respects with all of such party&rsquo;s agreements and covenants under the merger agreement
                                         to be performed or complied with by it on or prior to the completion of the merger;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>no material adverse effect shall have occurred with respect
                                         to the Company, Merger Sub and any subsidiary since the date of the merger agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the Company shall have entered into employment agreements,
                                         in form and substance reasonably satisfactory to Newegg, with the persons identified
                                         by Newegg;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>Newegg shall have received a duly executed legal opinion
                                         addressed to Newegg from the Company&rsquo;s legal counsel in form and substance reasonably
                                         satisfactory to Newegg;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>Newegg shall have received from the Company copy of the
                                         amended and restated memorandum and articles of association of the Company approved by
                                         shareholders at the special meeting;&nbsp;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the Company and Merger Sub shall have delivered to Newegg
                                         customary officer&rsquo;s certificates, secretary&rsquo;s certificates and good standing
                                         certificates;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> &#9679; </TD><TD> if required, the transactions contemplated by the
                                         merger agreement shall have been approved by the investors pursuant to the securities
                                         purchase agreements that the investors and the Company entered into on February 12, February
                                         21 and February 27, 2020; and </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the Company shall have been approved by NASDAQ for listing
                                         following the merger.&nbsp;&nbsp;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>
</div>
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<DIV STYLE="padding: 5; border: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, the obligation of each of the Company and Merger
Sub to complete the merger is subject to the satisfaction (or waiver, to the extent permitted by applicable law) of the following
conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>all of the representations and warranties of Newegg (including
                                         its subsidiaries) set forth in the merger agreement and in any certificate delivered
                                         by Newegg pursuant thereto shall be true and correct on and as of the date of the merger
                                         agreement and on and as of the completion date of the merger as if made on the completion
                                         date, except for (i) those representations and warranties that address matters only as
                                         of a particular date (which representations and warranties shall have been accurate as
                                         of such date), and (ii) any failures to be true and correct that (without giving effect
                                         to any qualifications or limitations as to materiality or material adverse effect), individually
                                         or in the aggregate, have not had and would not reasonably be expected to have a material
                                         adverse effect on, or with respect to, Newegg and any subsidiary or materially and adversely
                                         affect Newegg&rsquo;s ability to consummate the transactions contemplated by the merger
                                         agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>Newegg shall have performed in all material respects
                                         all of Newegg&rsquo;s obligations and complied in all material respects with all of Newegg&rsquo;s
                                         agreements and covenants under the merger agreement to be performed or complied with
                                         by it on or prior to the completion of the merger;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>lock-up agreements which are entered into on the date of the merger agreement by among Newegg, the Company and any Newegg stockholders
who would hold more than 5% of the Company common shares immediately after the closing shall be in full force and effect in accordance
with their as of the closing;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>No material adverse effect shall have occurred and be
                                         continuing with respect to Newegg and its subsidiaries, taken as whole, since the date
                                         of the merger agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the Newegg shall have delivered to the Company and Merger
                                         Sub customary officer&rsquo;s certificates, secretary&rsquo;s certificates and good standing
                                         certificates; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the Company and Merger Sub shall have received a duly
                                         executed legal opinion addressed to the Company and Merger Sub from the Newegg&rsquo;s
                                         legal counsel in form and substance reasonably satisfactory to the Company and Merger
                                         Sub.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company and Newegg cannot be certain when, or if, the conditions
to the merger will be satisfied or waived, or that the merger will be completed.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman,serif; margin: 0 0 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Completion
of the Disposition is Subject to Certain Conditions (See Page 102) </B></FONT> </P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
obligation of each of the Purchaser, the Company and Lianluo Connection to complete the disposition is subject to the fulfillment
(or waiver, to the extent permissible under applicable law) of the following conditions:</FONT> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 12pt Times New Roman,serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">obtaining
                                         any requisite regulatory approvals;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
<TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">no
                                         law or order prohibiting or preventing consummation of the disposition;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
<TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">no
                                         litigation to enjoin or otherwise restrict consummation of the disposition; </FONT> </TD></TR>
<TR STYLE="vertical-align: top">
<TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         Company shareholder&rsquo;s approval of the disposition; </FONT> </TD></TR>
<TR STYLE="vertical-align: top">
<TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         consummation of the merger; and </FONT> </TD></TR>
<TR STYLE="vertical-align: top">
<TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         conversion of debt that Lianluo Connection owes to the Company into additional paid-in
                                         capital of Lianluo Connection.</FONT> </TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P></DIV>

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<DIV STYLE="border: Black 1.5pt solid; padding: 5"><P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><A NAME="al_014"></A>Regulatory Approvals <FONT STYLE="font-size: 10pt">(See
Page 80) </FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The consummation of the merger is not subject to any regulatory
or governmental approvals or filings, other than (i) the filing of a certificate of merger with the Secretary of State of the
State of Delaware and (ii) the declaration by the Securities and Exchange Commission, or the SEC, of the effectiveness of the
registration statement of which this proxy statement/prospectus forms a part, and any required notice or other filings under applicable
state securities laws.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 10pt"> The consummation of the disposition is not subject to any regulatory
approvals. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><A NAME="al_015"></A>Listing on NASDAQ <FONT STYLE="font-size: 10pt">(See
Page 80) </FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1pt">The approval for listing of our common shares on the
NASDAQ Capital Market, including the shares issued in the merger, subject only to official notice of issuance, is a condition
to the obligations of Newegg to complete the&nbsp;merger. We will apply for such listing under the symbol &ldquo;NEGG.&rdquo;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><A NAME="al_016"></A>Completion and Effectiveness of
the Merger and the Disposition <FONT STYLE="font-size: 10pt">(See Page 83) </FONT></B> </P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The merger will be completed and become effective at such time
as the certificate of merger for the merger is filed with the Secretary of State of the State of Delaware (or at such time as
agreed to between the Company and Newegg and specified in such certificate of merger in accordance with applicable law). Unless
another date and time are agreed to by the Company and Newegg, completion of the merger will occur no earlier than the second
business day following the day on which the last of the conditions is to be satisfied or waived (other than those conditions that
by their nature are to be satisfied at the closing of the merger, but subject to the satisfaction or waiver of such conditions).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 10pt"> The disposition will be completed immediately following completion
of the merger. </P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0"> As of the date of this proxy statement/prospectus, we expect that the
merger and the disposition will be completed in the first quarter of 2021. However, completion of the merger and the disposition
are subject to the satisfaction or waiver of the conditions to completion of the merger and the disposition. There can be no assurances
as to when, or if, the merger and the disposition will occur. If the merger is not completed on or before April 30, 2021 or June
30, 2021, if extended under certain circumstances, either the Company or Newegg may terminate the merger agreement; provided that
the right to terminate the merger agreement if the merger is not completed on or prior to such date will not be available to either
of the Company or Newegg if the failure of the merger to be consummated by such date is due to a material breach by such party
of any representation, warranty, covenant or other agreement of such party set forth in the merger agreement. </P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><A NAME="al_017"></A> Go Shop <FONT STYLE="font-size: 10pt">(See
Page 90)</FONT> <FONT STYLE="font-size: 10pt"> </FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During the period from the date of the merger agreement and
continuing until the earlier of the termination of the merger agreement or the completion of the merger, each of the Company and
Newegg may and may cause its representatives to directly or indirectly, (i) solicit, assist, initiate or facilitate the making,
submission or announcement of, or intentionally encourage, any acquisition proposal, (ii) furnish any non-public information regarding
such party or its affiliates or their respective businesses, operations, assets, liabilities, financial condition, prospects or
employees to any person or group in connection with or in response to an acquisition proposal, (iii) engage or participate in discussions
or negotiations with any person or group with respect to, or that could be expected to lead to, an acquisition proposal, (iv) approve,
endorse or recommend, or publicly propose to approve, endorse or recommend, any acquisition proposal, (v) negotiate or enter into
any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any acquisition proposal,
or (vi) release any third person from, or waive any provision of, any confidentiality agreement to which such party is a party.</P></DIV>


<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



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<DIV STYLE="padding: 5; border: Black 1.5pt solid"><P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Each of the Company and Newegg agreed to notify the other as
promptly as practicable (and in any event within 48 hours) orally and in writing of the receipt by such party or any of its representatives
of (i) any bona fide inquiries, proposals or offers, requests for information or requests for discussions or negotiations regarding
or constituting any acquisition proposal or any bona fide inquiries, proposals or offers, requests for information or requests
for discussions or negotiations that could be expected to result in an acquisition proposal, and (ii) any request for non-public
information relating to such party or its affiliates (or any subsidiary), specifying in each case, the material terms and conditions
thereof (including a copy thereof if in writing or a written summary thereof if oral) and the identity of the party making such
inquiry, proposal, offer or request for information. Each of the Company and Newegg agreed to shall keep the other promptly informed
of the status of any such inquiries, proposals, offers or requests for information. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For purposes of the merger agreement, an &ldquo;acquisition
proposal&rdquo; means any inquiry, proposal or offer, or any indication of interest in making an offer or proposal, from any person
or group at any time relating to a transaction (other than the transactions contemplated by the merger agreement) concerning the
sale of (i) all or any material part of the business or assets of any subsidiaries of Newegg or the Company (including any subsidiary),
or (ii) any of the shares or other equity interests or profits of any subsidiaries of Newegg or the Company (including any subsidiary),
in any case, whether such transaction takes the form of a sale of shares or other equity, assets, merger, consolidation, issuance
of debt securities, management contract, joint venture or partnership, or otherwise.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><A NAME="al_018"></A>Termination of the Merger Agreement
(See Page 92) </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The merger agreement may be terminated at any time prior to
the completion of the merger, whether before or after shareholders have approved the merger, in any of the following ways:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>by mutual written consent of the Company and Newegg;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>by either the Company or Newegg (i) if the merger shall not have occurred on or prior to April 30, 2021; provided, that
                                                                     the right to terminate shall not be available to any party whose material breach of a representation, warranty or covenant in
                                                                     the merger agreement has been a principal cause of the failure of the merger to be consummated on or before such outside
                                                                     date<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">, provided further that such outside date shall
                                                                     be automatically extended up to two additional times by one month each time if, on the then current outside date (A) all
                                                                     conditions to closing, except for NASDAQ initial listing, have been satisfied or waived, or are imminently capable of being
                                                                     satisfied, (B) NASDAQ initial listing is reasonably likely to be satisfied by such outside date, as extended, and (C) the
                                                                     parties have exercised and continue to exercise their best efforts to satisfy the conditions of NASDAQ initial
                                                                     listing;</FONT> (ii) if any governmental authority of competent jurisdiction shall have issued an order or taken any other
                                                                     action permanently restraining, enjoining or otherwise prohibiting the merger, and, in each case, such order or action shall
                                                                     have become final and non-appealable;&nbsp;provided, that the right to terminate shall not be available to any party whose
                                                                     material breach of a representation, warranty or covenant in the merger agreement has been the principal cause of such
                                                                     action, (iii) if the approval of a majority of votes cast which are not beneficially owned by Hangzhou Lianluo
shall not have been obtained at the special shareholder meeting; or (iv) if any required approval by the Newegg shareholders shall
not have been obtained within five days after the date of the merger agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>by Newegg (provided it is not then in material breach of any of its obligations under the merger agreement) (i) if there is
any breach of any representation, warranty, covenant or agreement on the part of the Company or Merger Sub set forth in the merger
agreement, or if any representation or warranty of the Company or Merger Sub shall have become untrue, in either case such that
the applicable conditions set forth in&nbsp;the merger agreement would not be satisfied; provided, however, if such breach is curable
by the Company or Merger Sub, Newegg may not terminate for so long as the Company or Merger Sub continue to exercise their best
efforts to cure such breach, unless such breach is not cured within thirty (30) days after notice of such breach is provided by
Newegg to the Company, (ii) if for any reason the Company fails to call and hold the special meeting within sixty (60) days following
the filing of this registration statement of which this proxy statement/prospectus forms a part, unless such failure is as a result
of the Company responding in good faith to comments on this proxy statement/prospectus or the registration statement on Form F-1
related to the concurrent offering received from the SEC or comments from NASDAQ, (iii) if the Company&rsquo;s board (or any subgroup
or committee thereof) withdraws, modifies or changes its recommendation of the merger agreement or the merger in a manner adverse
to Newegg or shall have resolved to do any of the foregoing, or approves or recommends, or proposes to approve or recommend, an
acquisition proposal; or (iv) if the escrow amount is not placed into the escrow account within five days after the date of the
merger agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>
</div>
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<DIV STYLE="padding: 5; border: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>by the Company (provided neither it nor its subsidiary is then in material breach of any of their obligations under the merger
agreement) (i) if there is any breach of any representation, warranty, covenant or agreement on the part of Newegg as set forth
in the merger agreement or if any representation or warranty of Newegg shall have become untrue, in either case such that the applicable
conditions set forth in the merger agreement&nbsp;would not be satisfied; provided, however, if such breach is curable by Newegg,
the Company may not terminate the merger agreement for so long as Newegg continues to exercise its best efforts to cure such breach,
unless such breach is not cured within thirty (30) days after notice of such breach is provided by the Company to Newegg, or (ii)
if the Newegg board (or any subgroup or committee thereof) (A) withdraws, modifies or changes its recommendation of the merger
agreement or the merger in a manner adverse to the Company or shall have resolved to do any of the foregoing, or (B) approves or
recommends, or proposes to approve or recommend, an acquisition proposal;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>by Newegg if it receives an unsolicited, bona fide written
                                         offer prior to the approval of the shareholders at the special meeting, and Newegg&rsquo;s
                                         special committee determines in good faith (based upon a written opinion of an independent
                                         financial advisor) that such offer constitutes a superior offer to the stockholders of
                                         Newegg to the terms set forth in the merger agreement, and the special committee determines
                                         in good faith (based upon advice of counsel) that, in light of such superior offer, the
                                         withdrawal or modification of the board&rsquo;s approval is required in order for the
                                         board to comply with its fiduciary obligations to Newegg&rsquo;s stockholders under the
                                         applicable law; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>by the Company if it receives an unsolicited, bona fide
                                         written offer prior to the approval of the shareholders at the special meeting, and the
                                         Company&rsquo;s special committee determines in good faith (based upon a written opinion
                                         of an independent financial advisor) that such offer constitutes a superior offer to
                                         the shareholders of the Company to the terms set forth in the merger agreement, and the
                                         special committee determines in good faith (based upon advice of counsel) that, in light
                                         of such superior offer, the withdrawal or modification of the board&rsquo;s approval
                                         is required in order for the board to comply with its fiduciary obligations to the Company&rsquo;s
                                         shareholders under the applicable law.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If the merger agreement is validly terminated, the merger agreement
will terminate (except that the&nbsp;confidentiality agreement between Newegg and the Company, and the provisions described in
Section 5.12 (Public Announcements), Section 5.13 (Confidential Information), Section 7.2 (Effect of Termination), Article VII
(Termination), Article VIII (Indemnification) and Article&nbsp;IX (General Provisions) of the merger agreement, which provisions
shall survive such termination), and there will be no other liability on the part of either party to the other except as described
under &ldquo;&mdash;Termination Fees and Expenses;&rdquo; provided,&nbsp;that no party will be relieved from liability for fraud
or a willful breach of a representation or warranty contained in the merger agreement or the breach of any covenant contained
in the merger agreement, in which case the aggrieved party will be entitled to all rights and remedies available at law or in
equity.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><A NAME="al_019"></A>Termination Fees and Expenses <FONT STYLE="font-size: 10pt">(See
Page 93) </FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt">If the merger agreement is terminated (i) due to the failure
of the Company to obtain the approval of a majority of votes cast which are not beneficially owned by Hangzhou Lianluo at the special
shareholder meeting, or (ii) upon any of the events described in the third or seventh bullet under &ldquo;&mdash;Termination of
the Merger Agreement&rdquo; above, then the Company is required to immediately repay to Newegg in cash or by wire transfer of immediately
available funds, all legal and accounting fees incurred by Newegg in connection with the merger agreement and the transactions
contemplated thereby up to an amount equal to $450,000.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt"> If the merger agreement is terminated (i) due to the failure
of Newegg to obtain any required approval by the Newegg shareholders within five days after the date of the merger agreement,
or (ii) upon the event described in the fifth or sixth bullet under &ldquo;&mdash;Termination of the Merger Agreement&rdquo; above,
then Newegg is required to immediately repay to the Company in cash or by wire transfer of immediately available funds all legal
and accounting fees incurred by the Company in connection with the merger agreement and the transactions contemplated thereby
up to an amount equal to $450,000. During the period from the date of the merger agreement and continuing until the earlier of
the termination of the merger agreement or the completion of the merger, Newegg agreed to keep $450,000 of cash available for
the payment of the foregoing termination fee. </P>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </P></DIV>

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<DIV STYLE="border: Black 1.5pt solid; padding: 5"><P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B>Termination of the Disposition Agreement <FONT STYLE="font-size: 10pt">(See
Page 102) </FONT></B> </P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0"> The disposition agreement may be terminated prior to the closing date
as follows: </P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 12pt Times New Roman,serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">by
                                         mutual written consent of the Purchaser and the Company; </FONT> </TD></TR>                                                                                                                                                                                                                                               <TR STYLE="vertical-align: top">
<TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>

<TR STYLE="vertical-align: top">
<TD></TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">by
                                         written notice by either the Purchase or the Company if a governmental authority of competent
                                         jurisdiction shall have issued an order or taken any other action permanently restraining,
                                         enjoining or otherwise prohibiting the transactions contemplated by the disposition agreement;</FONT> </TD></TR>                                                                        <TR STYLE="vertical-align: top">
<TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>

<TR STYLE="vertical-align: top">
<TD></TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">by
                                         written notice by the Company if the required shareholder approval is not obtained; or</FONT> </TD></TR>                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      <TR STYLE="vertical-align: top">
<TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
<TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">By
                                         written notice by the Company if the merger is not closed.</FONT> </TD></TR>
</TABLE>

<P STYLE="margin: 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><A NAME="al_020"></A>Specific Performance <FONT STYLE="font-size: 10pt">(See
Page 93) </FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Under the merger agreement, each of the Company and Newegg
is entitled to an injunction or injunctions to prevent breaches of the merger agreement and to specifically enforce the terms
and provisions of the merger agreement.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman,serif; margin: 0 0 10pt"> Material U.S. Federal Income Tax Consequences of the
Merger <B>(See Page 80) </B> </P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 10pt"> The Company and Newegg have structured the merger with the intent
that it will qualify as a tax-free &ldquo;reorganization&rdquo; within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended, or the Code, specifically as a &ldquo;reverse subsidiary merger&rdquo; under Section 368(a)(2)(E) of the
Code. However, the qualification of the merger as a tax-free reorganization depends on compliance with numerous technical requirements,
and there is a risk that the merger may not satisfy certain of these requirements. There cannot be any assurance that the merger
will so qualify as a &ldquo;reorganization&rdquo;. See &ldquo;Risk Factors&mdash;Risks Related to the Merger&mdash;There can be
no assurances that Newegg stockholders will not be required to recognize gain for U.S. federal income tax purposes upon the exchange
of Newegg stock for common shares of the Company stock in the merger.&rdquo; The Company and Newegg have not sought, and will
not seek, any ruling from the Internal Revenue Service, or the IRS, regarding any matter affecting the merger or any of the United
States federal income tax consequences discussed herein; and have not sought, and will not seek, any tax opinion from their respective
legal counsel regarding the qualification of the merger as a tax-free &ldquo;reorganization&rdquo; within the meaning of Section
368(a) of the Code and generally as a tax-free transaction. Thus, there can be no assurance that the IRS will ultimately conclude
that the merger does meet all of the requirements for qualification as a &ldquo;reorganization&rdquo; within the meaning of Section
368(a) of the Code, and there can be no assurance that any of the other statements made herein would not be challenged by the
IRS and, if so challenged, would be sustained upon review in a court. A successful challenge by the IRS could result in taxable
income to Newegg and, as described below, its stockholders. </P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 10pt"> Assuming the merger qualifies for the intended tax treatment,
U.S. holders will not recognize any gain or loss upon the receipt of our common shares in the merger. However, if the merger does
not qualify as a tax free reorganization as intended, then a U.S. holder will recognize capital gain or loss in an amount equal
to the difference, if any, between (i) the sum of the fair market value of our common shares and the fair market value of other
merger consideration received in the merger and (ii) the U.S. holder&rsquo;s adjusted tax basis in the Newegg stock exchanged
in the merger. </P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 10pt"> The foregoing is qualified by reference to, and each Newegg stockholder
is urged to read, the sections &ldquo;Proposal I: The Merger&mdash;Material U.S. Federal Income Tax Consequences of the Merger&rdquo;
and &ldquo;Risk Factors&mdash;Risks Related to the Merger&mdash;There can be no assurances that Newegg stockholders will not be
required to recognize gain for U.S. federal income tax purposes upon the exchange of Newegg stock for common shares of the Company
stock in the merger,&rdquo; and to consult its tax advisor to determine the particular U.S. federal, state or local or non-U.S.
income or other tax consequences to it of the merger. </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>
</div>
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<DIV STYLE="padding: 5; border: Black 1.5pt solid"><P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><A NAME="al_021"></A>Anticipated Accounting Treatment <FONT STYLE="font-size: 10pt">(See
Page 82) </FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The merger will be accounted for as a reverse merger in accordance
with generally accepted accounting principles in the United States of America, or U.S. GAAP. Under this method of accounting,
the Company will be treated as the &ldquo;acquired&rdquo; company for financial reporting purposes. This determination was primarily
based on Newegg comprising the ongoing operations of the combined company, Newegg&rsquo;s senior management comprising the senior
management of the combined company and Newegg shareholder having a majority of the voting power of the combined company. For accounting
purposes, Newegg will be deemed to be the accounting acquirer in the transaction and, consequently, the transaction will be treated
as a recapitalization of Newegg (i.e., a capital transaction involving the issuance of shares by the Company for the stock of
Newegg). Accordingly, the consolidated assets, liabilities and results of operations of Newegg will become the historical financial
statements of the combined company, and the Company&rsquo;s assets, liabilities and results of operations will be consolidated
with Newegg beginning on the acquisition date.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><A NAME="al_022"></A>Transaction Expenses <FONT STYLE="font-size: 10pt">(See
Page 82) </FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company estimates that its total merger transaction expenses
will be approximately $[&nbsp;&nbsp; ], which includes financial advisor fees of approximately $[&nbsp;&nbsp; ], legal fees in
the amount of approximately $[&nbsp;&nbsp; ], accounting fees in the amount of approximately $[&nbsp;&nbsp; ], transfer agent
fees in the amount of approximately $[&nbsp;&nbsp; ], printing fees in the amount of approximately $[&nbsp;&nbsp; ], filing fees
in the amount of approximately $[&nbsp;&nbsp; ] and other expenses in the amount of approximately $[&nbsp;&nbsp; ]. None of these
expenses are contingent on approval and consummation of the merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg estimates that its total merger transaction expenses
will be approximately $[&nbsp;&nbsp; ], which includes legal fees in the amount of approximately $[&nbsp;&nbsp; ], accounting
fees in the amount of approximately $[&nbsp;&nbsp; ] and other expenses in the amount of approximately $[&nbsp;&nbsp; ]. None
of these expenses are contingent on approval and consummation of the merger.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><A NAME="al_023"></A>Risk Factors <FONT STYLE="font-size: 10pt">(See
Page 26)</FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> You should carefully read this proxy statement/prospectus
and especially consider the factors discussed in &ldquo;Risk Factors&rdquo; in connection with your consideration of the&nbsp;merger
and disposition&nbsp;before deciding whether to vote for approval of the&nbsp;merger proposal and the disposition proposal. Below
please find a summary of the principal risks we face, organized under relevant headings. These risks are discussed more fully
in &ldquo;Risk factors.&rdquo; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Risks
Related to the Merger and Disposition</I></B></FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Risks
and uncertainties related to the merger and disposition include, but are not limited to, the following:</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         merger and disposition are is subject to a number of conditions.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain
                                         of our director, executive officer and major shareholders have interests in the merger
                                         and disposition that are different from, and may potentially conflict with, our interests
                                         and the interests of our unaffiliated shareholders.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Failure
                                         to complete the merger and disposition could negatively impact our business, financial
                                         condition, results of operations or share price.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Following
                                         the merger, our business may suffer as a result of the lack of public company operating
                                         experience of new management.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         transition to becoming the subsidiary of a public company will require changes in the
                                         way that Newegg operates its business and incur additional expenses pertaining to SEC
                                         reporting obligations and SEC compliance matters, and our disclosure controls and procedures
                                         may not prevent or detect all errors or acts of fraud.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
                                         is not a publicly traded company, making it difficult to determine the fair market value
                                         of Newegg.</FONT> </TD></TR></TABLE>

<P STYLE="text-align: left; margin-top: 0; margin-bottom: 0">&nbsp;</P>

</div>
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->
    <DIV STYLE="padding: 5; border: Black 1.5pt solid"><P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
                                         future results following the merger and disposition may differ materially from the unaudited
                                         pro forma financial information included in this proxy statement/prospectus.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NASDAQ
                                         may not list or continue to list our common shares on its exchange, which could prevent
                                         consummation of the merger or limit investors&rsquo; ability to make transactions in
                                         our shares. Consequently, we may be subject to additional trading restrictions.</FONT> </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Risks
Related to the Business of the Company</I></B></FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is subject to risks and uncertainties related to its business, including, but not limited to, the following:</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
                                         business is seasonal and revenues and operating results could fall below investor expectations
                                         during certain periods, which could cause the trading price of our common shares to decline.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
                                         sell our products primarily to distributors, and our technical services are provided
                                         to hospitals and check-up centers; our ability to add distributors, hospitals and check-up
                                         centers will impact our revenue growth. Failure to maintain or expand our distribution
                                         network and network of hospitals and check-up centers would materially and adversely
                                         affect our business.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
                                         generate a significant portion of our revenues from a small number of products, and a
                                         reduction in demand for any of these products could materially and adversely affect our
                                         financial condition and results of operations.</FONT> </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Risks
Relating to Doing Business in China</I></B></FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
face risks and uncertainties related to doing business in China in general, including, but not limited to, the following:</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Adverse
                                         changes in economic and political policies of the PRC government could have a material
                                         adverse effect on the overall economic growth of China, which could adversely affect
                                         our business.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Currently,
                                         there are no specific laws or regulations applicable to wearable medical products in
                                         China, which are instead subject to general laws applicable to medical products. If there
                                         are applicable government regulations in the future, it may create risks and challenges
                                         with respect to our compliance efforts and our business strategies.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Uncertainties
                                         with respect to the PRC legal system could limit the legal protections available to you
                                         and us.</FONT> </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Risks
Related to the Business of Newegg</I></B></FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
is subject to risks and uncertainties related to its business, including, but not limited to, the following:</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
                                         faces risks related to system interruption, including failures caused or experienced
                                         by third-party service providers, and lack of redundancy and timely upgrades.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
                                         business faces intense domestic and international competition.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
                                         decline in demand for IT and CE products could adversely affect Newegg&rsquo;s operating
                                         results.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         loss of key employees or the failure to attract qualified personnel could have a material
                                         adverse effect on Newegg&rsquo;s ability to run its business.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
                                         Newegg is unable to provide a satisfactory customer experience, its reputation would
                                         be harmed and it could lose customers.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
                                         depends on its vendors to source sufficient quantities of merchandise on favorable terms.
                                         If Newegg fails to maintain strong vendor relationships or if its vendors are otherwise
                                         unable to supply products that meet its standards in a timely manner, its net sales and
                                         net income could suffer.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
                                         international sales and operations require access to international markets and are subject
                                         to applicable laws relating to trade, export and import controls and economic sanctions,
                                         the violation of which could adversely affect its operations.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
                                         has incurred net loss in the past and may continue to experience losses in the future.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         successful operation of Newegg&rsquo;s business depends upon the performance, reliability
                                         and security of the internet infrastructure in the countries where it operates.</FONT> </TD></TR></TABLE>

<P STYLE="text-align: left; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>
</div>
    <!-- Field: Page; Sequence: 34; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->13<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->
    <DIV STYLE="padding: 5; border: Black 1.5pt solid"><P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
    <P STYLE="margin-top: 0; margin-bottom: 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Because
                                         many of the products that Newegg sells are manufactured abroad, Newegg may face delays,
                                         increased cost or quality control deficiencies in the importation of these products,
                                         which could reduce its net sales and profitability.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Assertions,
                                         claims and allegations, even if not true, that Newegg has infringed or violated intellectual
                                         property rights could harm Newegg&rsquo;s business and reputation. Also, Newegg may be
                                         subject to product liability claims, which could be costly and time-consuming to defend.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
                                         may incur additional costs due to tax assessments resulting from ongoing and future audits
                                         by tax authorities.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Significant
                                         developments stemming from recent U.S. government actions and proposals concerning tariffs
                                         and other economic proposals could have a material adverse effect on Newegg.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
                                         and certain of its subsidiaries are parties to a revolving credit agreement, which contain
                                         a number of covenants that may restrict Newegg&rsquo;s current and future operations
                                         and could adversely affect Newegg&rsquo;s ability to execute business needs.</FONT> </TD></TR></TABLE>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </P>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Risks
Related to Ownership of our Common Shares</I></B></FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to the risks described above, we are subject to general risks and uncertainties related to our common shares, including,
but not limited to, the following:</FONT> </P>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
                                         we fail to maintain compliance with NASDAQ Listing Rules, we may be delisted from the
                                         NASDAQ Capital Market, which would result in a limited public market for trading our
                                         shares and make obtaining future debt or equity financing more difficult for us.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         trading price of the common shares is likely to be volatile and could fluctuate widely
                                         due to multiple factors, some of which are beyond our control.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
                                         will be a &ldquo;controlled company&rdquo; within the meaning of the NASDAQ rules and,
                                         as a result, will qualify for, and intend to rely on, exemptions from certain corporate
                                         governance requirements. You will not have the same protections afforded to shareholders
                                         of companies that are subject to such requirements.</FONT> </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: left; width: 0.25in"></TD><TD STYLE="text-align: left; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
                                         a company incorporated in the BVI, we are permitted to adopt certain home country practices
                                         in relation to corporate governance matters that differ significantly from the NASDAQ
                                         corporate governance listing standards. These practices may afford less protection to
                                         shareholders than they would enjoy if we complied fully with the NASDAQ&rsquo;s corporate
                                         governance listing standards.</FONT> </TD></TR></TABLE>

<P STYLE="text-align: left; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>
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<DIV STYLE="padding: 5; border: Black 1.5pt solid"><P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="al_024"></A>SELECTED CONSOLIDATED
FINANCIAL DATA OF THE COMPANY</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following tables present the selected consolidated financial
information for the Company. The selected consolidated statements of income (loss) data for the three years ended December 31,
2019, 2018 and 2017 and the consolidated balance sheet data as of December 31, 2019 and 2018 have been derived from our audited
consolidated financial statements presented elsewhere in this proxy statement/prospectus. The selected consolidated statements
of income (loss) data for the years ended December&nbsp;31, 2016 and 2015 and the selected consolidated balance sheets data as
of December 31, 2017, 2016 and 2015 have been derived from our audited consolidated financial statements for the years ended December&nbsp;31,
2017, 2016 and 2015, which are not included in this proxy statement/prospectus. We derived the selected consolidated statements
of income (loss) data for the six months ended June 30, 2020 and 2019 and the consolidated balance sheet data as of June 30, 2020
from our unaudited consolidated financial statements presented elsewhere in this proxy statement/prospectus, which include all
adjustments, consisting of normal recurring adjustments, that our management considers necessary for a fair presentation of our
financial position and results of operations as of the dates and for the periods presented. Our historical results do not indicate
results expected for any future periods.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The selected consolidated financial data
below should be read in conjunction with, and are qualified in their entirety by reference to, our consolidated financial statements
and related notes and the section of this proxy statement/prospectus captioned &ldquo;Management&rsquo;s Discussion and Analysis
of Financial Condition and Results of Operations of the Company.&rdquo; Our audited consolidated financial statements are prepared
and presented in accordance with U.S. GAAP.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 8pt">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 0 0 0 10pt; text-indent: -10pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the Six Months Ended&nbsp;June
    30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="18" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the Years Ended&nbsp;December
    31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 0 0 0 10pt; text-indent: -10pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2016</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2015</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 0; font-weight: bold; text-indent: 0">Statement of Income (Loss) Data:</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding: 0 0 0 10pt; width: 44%; text-indent: -10pt">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 5%; text-align: right">339,175</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 5%; text-align: right">242,213</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 5%; text-align: right">383,458</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 5%; text-align: right">559,386</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 5%; text-align: right">882,011</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 5%; text-align: right">13,062,373</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 5%; text-align: right">738,301</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding: 0 0 0 10pt; text-indent: -10pt">Costs of revenue</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(580,572</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(418,227</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(743,744</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(757,901</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,655,970</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(17,179,060</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,094,124</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt">Gross loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(241,397</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(176,014</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(360,286</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(198,515</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(773,959</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,116,687</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(355,823</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt">Service income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">56,030</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,587</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,600,012</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt">Service expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,289</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(21,130</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,234,257</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt">Selling expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(43,725</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(556,213</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(835,270</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,082,829</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,170,378</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(927,243</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,815,609</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt">General and administrative expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,200,494</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,753,718</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,593,808</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,675,465</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,192,030</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,183,775</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,089,592</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt">(Provision for) recovery from doubtful accounts</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(28,963</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(43,873</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13,011</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(22,229</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,608</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">150,280</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,544</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt">Impairment loss for intangible assets</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,281,779</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt">Operating loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,514,579</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,529,818</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,802,375</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9,260,817</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,058,018</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9,083,968</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,903,813</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt">Loss before provision for income tax and non-controlling
    interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,695,996</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,312,215</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,450,994</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,910,002</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,136,434</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9,704,761</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,710,848</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt">Income tax benefit</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">95,026</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">11,978</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt">Net loss from continuing operations</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,695,996</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,312,215</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(4,450,994</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(8,910,002</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(5,136,434</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(9,609,735</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(6,698,870</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt">Net loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,695,996</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,312,215</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,450,994</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,910,002</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,136,434</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9,860,888</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(10,362,335</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt">Less: net loss attributable to non-controlling interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(129,020</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(139,205</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt">Net loss attributable to Company</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(1,695,996</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(3,312,215</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(4,450,994</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(8,910,002</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(5,136,434</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(9,731,868</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(10,223,130</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt">Net loss per common share - Basic and Diluted</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(0.53</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(1.49</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(2.00</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(4.05</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(2.37</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(7.47</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(13.65</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding: 0 0 0 10pt; text-align: left; text-indent: -10pt">Weighted average number of common shares used in computation
    - Basic and Diluted</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,176,254</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,225,821</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,225,821</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,202,176</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,164,071</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,302,846</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">748,819</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 8pt">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: center">As of<BR>
    June 30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="18" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of&nbsp;December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2016</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2015</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Balance Sheet Data:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 46%; text-align: left">Cash and cash equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 6%; text-align: right">6,396,488</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 6%; text-align: right">22,834</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 6%; text-align: right">477,309</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 6%; text-align: right">6,809,485</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 6%; text-align: right">10,792,823</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 6%; text-align: right">615,517</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Total current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,910,794</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,677,113</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,713,362</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,833,029</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,336,148</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,868,333</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Total assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,183,126</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,333,953</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,698,670</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,563,108</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,552,137</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,875,247</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Total current liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,269,272</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,233,112</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,452,804</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,680,882</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,115,074</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,405,646</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Total liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,959,206</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,622,742</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,582,050</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,409,993</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,614,436</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,568,382</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Non-controlling interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">867,826</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Total shareholders&rsquo; (deficit) equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,223,920</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,288,789</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,116,620</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,153,115</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,937,701</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,439,039</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Total liabilities and shareholders&rsquo; (deficit) equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,183,126</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,333,953</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,698,670</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,563,108</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,552,137</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,875,247</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>
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<DIV STYLE="padding: 5; border: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="al_025"></A>SELECTED CONSOLIDATED
FINANCIAL DATA OF NEWEGG</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following tables present the selected consolidated financial
information for Newegg. The selected consolidated statements of operations data for the three years ended December 31, 2019, 2018
and 2017 and the consolidated balance sheet data as of December 31, 2019 and 2018 have been derived from Newegg&rsquo;s audited
consolidated financial statements presented elsewhere in this proxy statement/prospectus. We derived the selected consolidated
statements of operations data for the six months ended June 30, 2020 and 2019 and the consolidated balance sheet data as of June
30, 2020 from Newegg&rsquo;s unaudited consolidated financial statements presented elsewhere in this proxy statement/prospectus,
which include all adjustments, consisting of normal recurring adjustments, that Newegg&rsquo;s management considers necessary
for a fair presentation of the financial position and results of operations of Newegg as of the dates and for the periods presented.
Newegg&rsquo;s historical results do not indicate results expected for any future periods.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The selected consolidated financial data below should be read
in conjunction with, and are qualified in their entirety by reference to, Newegg&rsquo;s consolidated financial statements and
related notes and the section of this proxy statement/prospectus captioned &ldquo;Management&rsquo;s Discussion and Analysis of
Financial Condition and Results of Operations of Newegg.&rdquo; Newegg&rsquo;s audited consolidated financial statements are prepared
and presented in accordance with U.S. GAAP.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 8pt">&nbsp;&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the Six Months Ended&nbsp;June 30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the Years Ended&nbsp;December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1.5pt solid">Statements of Operations Data:</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; text-align: left; text-indent: -0.125in; padding-left: 0.125in">Net sales</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">862,700</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">797,426</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,533,928</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">2,022,437</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">2,158,131</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; text-indent: -0.125in; padding-left: 0.125in">Cost of sales</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">738,122</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">718,807</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,369,054</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,816,834</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,925,990</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.125in; padding-left: 0.125in">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">124,578</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">78,619</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">164,874</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">205,603</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">232,141</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.125in; padding-left: 0.125in">Other operating income/(expense)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">264</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,314</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,555</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">170</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -0.125in; padding-left: 0.125in">Selling, general, and administrative expenses</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">107,138</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">115,504</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">229,192</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">247,174</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">246,106</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.125in; padding-left: 0.125in">Income (loss) from operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,704</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(36,857</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(36,004</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(43,126</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13,795</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.125in; padding-left: 0.125in">Interest income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">590</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">242</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">586</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,484</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,801</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.125in; padding-left: 0.125in">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(378</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,025</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,945</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,595</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,096</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.125in; padding-left: 0.125in">Other income, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,790</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,478</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,184</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,599</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,216</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -0.125in; padding-left: 0.125in">Gain from sale of and equity income from equity method investments</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">24,098</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">21,777</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">9,617</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">154</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.125in; padding-left: 0.125in">Income (loss) before provision for income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,706</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11,064</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12,402</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(32,021</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11,720</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -0.125in; padding-left: 0.125in">Provision for income taxes</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,767</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,405</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,589</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,582</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">247</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt; text-indent: -0.125in; padding-left: 0.125in">Net income (loss)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">18,939</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(15,469</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(16,991</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(33,603</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(11,967</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -0.125in; padding-left: 0.125in">Less: Dividend or deemed dividend paid to Series A convertible Preferred Stock</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(19,960</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(19,247</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt; text-indent: -0.125in; padding-left: 0.125in">Net income (loss) attributable to common stock</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">18,939</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(15,469</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(16,991</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(53,562</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(31,214</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt; text-indent: -0.125in; padding-left: 0.125in">Basic earnings (loss) per share</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">0.30</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(18.22</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(20.01</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(80.68</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(44.04</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt; text-indent: -0.125in; padding-left: 0.125in">Diluted earnings (loss) per share</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">0.16</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(18.22</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(20.01</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(80.68</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(44.04</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in">Weighted average shares used in computation of earnings per share:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.25in">Basic</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">849</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">849</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">849</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">664</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">709</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.25in">Diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,577</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">849</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">849</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">664</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">709</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 8pt">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: center">As of June&nbsp;30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1.5pt solid">Balance Sheet Data:</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left">Cash and cash equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">141,855</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">79,750</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">56,437</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Total current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">367,539</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">282,622</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">394,497</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Total assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">473,007</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">396,797</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">533,024</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Total current liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">320,826</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">256,117</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">391,568</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Total liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">348,276</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">289,724</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">408,571</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Total temporary equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">187,801</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">187,801</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">187,801</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Total deficit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(63,070</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(80,728</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(63,348</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Total liabilities, temporary equity and equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">473,007</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">396,797</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">533,024</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 8pt">&nbsp;<B>&nbsp;</B></FONT></P>

</div>
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<DIV STYLE="padding: 5; border: Black 1.5pt solid"><P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="al_026"></A>UNAUDITED PRO
FORMA CONDENSED COMBINED FINANCIAL INFORMATION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The unaudited pro forma condensed combined financial information
presented below sets forth the financial position and results of operations of the Company after giving effect to the merger and
the disposition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following unaudited pro forma condensed combined financial
statements give effect to the merger and the disposition and related transactions and were prepared in accordance with the regulations
of the SEC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The pro forma financial information is presented for informational
purposes only and is not necessarily indicative of what the combined company&rsquo;s financial position actually would have been
had the merger and disposition transactions been completed on the dates indicated or what the combined company&rsquo;s results
of operations actually would have been had the merger and disposition transactions been completed as of the beginning of the periods
indicated. In addition, the pro forma financial statements do not purport to project the future financial position or operating
results of the combined company. The pro forma financial statements include adjustments for events that are (1) directly attributable
to the aforementioned transactions, (2) factually supportable, and (3) with respect to the statements of income (loss), expected
to have a continuing impact on the combined results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">It should be noted that there have been no material transactions
between the Company and Newegg prior to and during the periods presented in the unaudited pro forma condensed combined financial
statements. In addition, these statements do not reflect any cost or growth synergies that the combined company may achieve as
a result of the merger, or the costs to combine the operations of the Company and Newegg.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The pro forma financial information has been derived from and
should be read in conjunction with the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 31.5pt; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 13.5pt"></TD><TD STYLE="width: 18pt"> (a) </TD><TD> The consolidated financial statements and related notes
                                         of the Company for the six months ended June 30, 2020 and 2019 and for year ended December
                                         31, 2019 (which are included elsewhere in this proxy statement/prospectus); and </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 13.5pt"></TD><TD STYLE="width: 18pt"> (b) </TD><TD> The consolidated financial statements and related notes
                                         of Newegg for the six months ended June 30, 2020 and 2019 and for the year ended December
                                         31, 2019 (which are included elsewhere in this proxy statement/prospectus). </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 31.5pt; text-indent: -0.25in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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<DIV STYLE="padding: 5; border: Black 1.5pt solid"><P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><B>Unaudited
                                         Pro Forma Condensed Combined Balance Sheet</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>As of June 30,
2020</B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(In thousands, except
par value)</P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> Newegg </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> Company </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> Combined </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> Pro Forma <BR> Adjustments </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> Notes </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> Pro Forma <BR> Combined </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center"> Assets </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="text-align: right"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD> Current assets: </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 30%; text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Cash and cash equivalents </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 9%; text-align: right"> 141,855 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 9%; text-align: right"> 6,396 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 9%; text-align: right"> 148,251 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 9%; text-align: right"> (6 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 9%; text-align: center"> Note 3(a) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 9%; text-align: right"> 148,245 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Restricted cash </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 837 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 837 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 837 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Marketable equity securities </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 287 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 287 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 287 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Accounts receivable, net </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 38,147 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 92 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 38,239 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (92 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> Note 3(a) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 38,147 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.1in; padding-left: 16.2pt"> Inventories </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 142,275 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 813 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 143,088 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (813 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> Note 3(a) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 142,275 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Income taxes receivable </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2,510 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 291 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2,801 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (291 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> Note 3(a) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2,510 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Prepaid expenses and other current assets </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 20,061 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 32 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 20,093 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (12 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> Note 3(a) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 20,081 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 16.2pt"> Due from related parties </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 21,854 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 21,854 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 21,854 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in"> Total current assets </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 367,539 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 7,911 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 375,450 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,214 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 374,236 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in"> Property and equipment, net </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 45,098 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 272 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 45,370 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (272 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> Note 3(a) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 45,098 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in"> Noncurrent deferred tax assets </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 403 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 403 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 403 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in"> Equity investment </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 6,457 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 6,457 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 6,457 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in"> Investment at cost </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 15,000 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 15,000 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 15,000 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in"> Right of use assets </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 31,459 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 31,459 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 31,459 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in"> Other noncurrent assets </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 7,051 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 7,051 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 7,051 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt; text-indent: -0.1in; padding-left: 0.35in"> Total assets </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> 473,007 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> 8,183 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> 481,190 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> (1,486 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="text-align: center; padding-bottom: 4pt"> &nbsp; </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> 479,704 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left"> Liabilities, Temporary Equity and Equity </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in"> Current liabilities: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Accounts payable </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 221,876 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 196 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 222,072 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> (154 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> Note 3(a) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 221,918 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Accrued liabilities </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 46,693 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1,044 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 47,737 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (982 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> Note 3(a) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 46,755 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Deferred revenue </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 36,975 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 36,975 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 36,975 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.1in; padding-left: 16.2pt"> Line of credit </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 6,510 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 6,510 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 6,510 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Short-term borrowings and interest payable </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2,029 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2,029 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,996 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> Note 3(a) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 33 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Current portion of long-term debt </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 269 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 269 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 269 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 16.2pt"> Lease liabilities - current </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 8,503 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 8,503 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 8,503 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in"> Total current liabilities </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 320,826 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3,269 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 324,095 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (3,132 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 320,963 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in"> Long-term debt, less current portion </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2,153 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2,153 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2,153 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in"> Income taxes payable </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 675 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 675 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 675 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in"> Lease liabilities - noncurrent </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 24,556 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 24,556 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 24,556 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in"> Warrants liabilities </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 690 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 690 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 690 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in"> Other liabilities </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 66 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 66 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 66 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.35in"> Total liabilities </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 348,276 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 3,959 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 352,235 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> (3,132 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 349,103 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in"> Commitments and contingencies </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in"> Temporary Equity: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Series AA convertible Preferred Stock, $.001 par
    value; 25,890 shares authorized, 24,870 shares issued and outstanding as of June 30, 2020 on an actual basis; 0 shares authorized,
    issued and outstanding as adjusted </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 187,146 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 187,146 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (187,146 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> Note 3(b) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 16.2pt"> Series A convertible Preferred
    Stock, $.001 par value; 59,000 shares authorized, 36,476 shares issued and outstanding as of June 30, 2020&nbsp;on an actual
    basis; 0 shares authorized, issued and outstanding as adjusted </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 655 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 655 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> (655 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt"> Note 3(b) </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.35in"> Total temporary equity </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 187,801 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 187,801 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> (187,801 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in"> Equity (deficit): </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Class A Common Shares, $0.021848 par value; 4,736
    shares authorized, 2,211 shares issued and outstanding as of June 30, 2020 on an actual basis; unlimited shares authorized,
    366,925 shares issued and outstanding as adjusted </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 48 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 49 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 7,968 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> Note 3(b)(d) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 8,017 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Class B Common Shares, $0.021848 par value; 1,514
    shares authorized; 1,389 shares issued and outstanding as of June 30, 2020 on an actual basis, 0 shares issued and outstanding
    as adjusted </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 30 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 30 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (30 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> Note 3(d) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Additional paid-in capital </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 735 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 47,996 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 48,731 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"><P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif"> 137,659 </P></TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> Note 3(b) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"><P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif"> 186,390 </P></TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Accumulated other comprehensive income (loss) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,777 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2,453 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 676 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2,453 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: center"> Note 3(c) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,777 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 16.2pt"> Accumulated deficit </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> (62,029 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> (46,303 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> (108,332 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif"> 46,303 </P></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt"> Note 3(c) </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> (62,029 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.35in"> Total equity (deficit) </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> (63,070 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 4,224 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> (58,846 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 189,447 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 130,601 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt; text-indent: -0.1in; padding-left: 0.35in"> Total liabilities, temporary
    equity and equity </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> 473,007 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> 8,183 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> 481,190 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> (1,486 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 4pt"> &nbsp; </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> 479,704 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to unaudited pro
forma condensed combined financial statements</P>

</div>
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->
<DIV STYLE="padding: 5; border: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Unaudited Pro Forma Condensed Combined
Statements of Operations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Six Months Ended June 30, 2020</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(In thousands, except per share data)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Newegg</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Company</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Combined</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Pro Forma <BR> Adjustments</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Notes</TD>
    <TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Pro Forma <BR> Combined</TD>
    <TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 30%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Net sales</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD>
    <TD STYLE="width: 9%; text-align: right">862,700</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD>
    <TD STYLE="width: 9%; text-align: right">339</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD>
    <TD STYLE="width: 9%; text-align: right">863,039</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD>
    <TD STYLE="width: 9%; text-align: right">(339</TD>
    <TD STYLE="width: 1%; text-align: left">)</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: center">Note 3(a)</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD>
    <TD STYLE="width: 9%; text-align: right">862,700</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Cost of sales</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">738,122</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">580</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">738,702</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(580</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">Note 3(a)</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">738,122</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Gross profit</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">124,578</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">(241</TD>
    <TD STYLE="text-align: left">)</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">124,337</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">241</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">124,578</TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Other operating income (expense)</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">264</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">-</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">264</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">-</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">264</TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Selling, general, and administrative expenses</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">107,138</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,273</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">108,411</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(836</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">Note 3(a)</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">107,575</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Income (Loss) from operations</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">17,704</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">(1,514</TD>
    <TD STYLE="text-align: left">)</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">16,190</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">1,077</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">17,267</TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Interest income</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">590</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">-</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">590</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">1</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Note 3(a)</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">591</TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Interest expense</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">(378</TD>
    <TD STYLE="text-align: left">)</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">(1</TD>
    <TD STYLE="text-align: left">)</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">(379</TD>
    <TD STYLE="text-align: left">)</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">(1</TD>
    <TD STYLE="text-align: left">)</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Note 3(a)</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">(380</TD>
    <TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Other income (expense), net</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">2,790</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">(24</TD>
    <TD STYLE="text-align: left">)</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">2,766</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">24</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Note 3(a)</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">2,790</TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Unrealized loss on securities</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">-</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">143</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">143</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">-</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">143</TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Change in fair value of warrants liabilities</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(300</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(300</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(300</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Income (loss) before provision for income taxes</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">20,706</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">(1,696</TD>
    <TD STYLE="text-align: left">)</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">19,010</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">1,101</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">20,111</TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Provision for income taxes</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,767</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,767</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,767</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt; text-indent: -0.1in; padding-left: 0.1in">Net income (loss)</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: right">18,939</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: right">(1,696</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">)</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: right">17,243</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: right">1,101</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: right">18,344</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt; text-indent: -0.1in; padding-left: 0.1in">Basic earnings (loss) per share</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: right">0.30</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: right">(0.53</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">)</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: right">(0.23</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">)</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: right">0.05</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt; text-indent: -0.1in; padding-left: 0.1in">Diluted earnings (loss) per share</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: right">0.16</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: right">(0.53</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">)</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: right">(0.37</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">)</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: right">0.05</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">Weighted average shares used in computation of earnings per share:</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.1in; padding-left: 16.2pt">Basic</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">849</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">3,176</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">4,025</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">362,477</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Note 4</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">366,502</TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.1in; padding-left: 16.2pt">Diluted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">1,577</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">3,176</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">4,753</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">362,477</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Note 4</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right">367,230</TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to unaudited pro
forma condensed combined financial statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P></DIV>

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<DIV STYLE="border: Black 1.5pt solid; padding: 5"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Unaudited Pro Forma Condensed Combined
Statements of Operations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Year Ended December 31, 2019</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(In thousands, except per share data)</P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Newegg</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Company</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Combined</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Pro Forma <BR> Adjustments</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Notes</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Pro Forma <BR> Combined</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 30%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Net sales</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,533,928</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">383</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,534,311</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(383</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: center">Note 3(a)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,533,928</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Cost of sales</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,369,054</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">744</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,369,798</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(744</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">Note 3(a)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,369,054</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">164,874</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(361</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">164,513</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">361</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">164,874</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Other operating income/(expense)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,314</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,314</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,314</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Selling, general, and administrative expenses</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">229,192</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,442</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">232,634</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(2,675</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">Note 3(a)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">229,959</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Loss from operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(36,004</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,803</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(39,807</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,036</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(36,771</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Interest income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">586</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">587</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Note 3(a)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">589</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,945</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,945</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Note 3(a)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,949</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Other income (expense), net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,184</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(32</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,152</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Note 3(a)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,184</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Unrealized loss on securities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,357</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,357</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,357</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Change in fair value of warrants liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">740</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">740</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">740</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Gain from sale of and equity income from equity method investments</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">21,777</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">21,777</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">21,777</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Loss before provision for income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12,402</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,451</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(16,853</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><P STYLE="margin: 0pt 0">3,066</P></TD><TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13,787</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -0.1in; padding-left: 0.1in">Provision for income taxes</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,589</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,589</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,589</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt; text-indent: -0.1in; padding-left: 0.1in">Net loss</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(16,991</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(4,451</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(21,442</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><P STYLE="margin: 0pt 0">3,066</P></TD><TD STYLE="padding-bottom: 4pt; text-align: left"></TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(18,376</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt; text-indent: -0.1in; padding-left: 0.1in">Net loss per share, basic and diluted</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(20.01</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(2.00</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(6.97</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(0.05</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Weighted average number of common stock outstanding used in computing per share amounts, basic and diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">849</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,226</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,075</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">362,477</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Note 4</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">365,552</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes to unaudited pro
forma condensed combined financial statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P></DIV>

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<DIV STYLE="padding: 5; border: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt"><B>Notes
to the Unaudited Pro Forma Condensed Combined Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Note 1 &ndash; Description of Transactions</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">On October 23, 2020, the Company,
Merger Sub, and Newegg entered into the merger agreement.&nbsp; If the transactions contemplated by the merger agreement are completed,
Merger Sub will merge into the Newegg and Newegg will be the surviving entity. The Company will become the 100% owner of the surviving
entity. As the consideration of the merger, the Company will issue to all the stockholders of Newegg an aggregate of approximately
363,325,542 common shares. Each issued and outstanding share of Newegg will be exchanged to 5.8417 common shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">On October 23, 2020, the Company
entered into the disposition agreement with the Purchaser and Lianluo Connection. If the transactions contemplated by the disposition
agreement are completed, the Company will sell of all of its equity interests in Lianluo Connection, a wholly owned subsidiary,
to the Purchaser immediately following completion of the merger for a purchase price of RMB 0.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Immediately after consummation
of the merger and disposition, the Company will own 100% of Newegg. The Newegg stockholders will own approximately 99.02% of the
Company and existing Company shareholders will own approximately 0.98% of the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Note 2 &ndash; Basis of Presentation</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">The merger will be accounted
for as a reverse merger in accordance with U.S. GAAP. Under this method of accounting, the Company will be treated as the &ldquo;acquired&rdquo;
company for financial reporting purposes. This determination was primarily based on Newegg comprising the ongoing operations of
the combined company, Newegg&rsquo;s senior management comprising the senior management of the combined company and Newegg shareholder
having a majority of the voting power of the combined company. For accounting purposes, Newegg will be deemed to be the accounting
acquirer in the transaction and, consequently, the transaction will be treated as a recapitalization of Newegg (i.e., a capital
transaction involving the issuance of shares by the Company for the stock of Newegg). Accordingly, the consolidated assets, liabilities
and results of operations of Newegg will become the historical financial statements of the combined company, and the Company&rsquo;s
assets, liabilities and results of operations will be consolidated with Newegg beginning on the acquisition date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0"> <FONT STYLE="font-size: 10pt">The unaudited pro forma combined balance
sheet as of June 30, 2020 was derived from Newegg&rsquo;s consolidated balance sheet and the Company&rsquo;s consolidated balance
sheet as of June 30, 2020. The unaudited pro forma combined balance sheet as of June 30, 2020 assumes that the merger and disposition
were completed on June 30, 2020.</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0"> <FONT STYLE="font-size: 10pt">The unaudited pro forma combined statement
of operations information for the year ended December 31, 2019 was derived from Newegg&rsquo;s consolidated statement of operations
and the Company&rsquo;s consolidated statements of operations for the years ended December 31, 2019. The unaudited pro forma combined
statement of operations information for the year ended December 31, 2019 assumes that the merger and disposition were completed
on January 1, 2019.&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">The unaudited pro forma combined
statement of operations information for the six months ended June 30, 2020 was derived from Newegg&rsquo;s consolidated statement
of operations and the Company&rsquo;s consolidated statements of operations for the six months ended June 30, 2020. The unaudited
pro forma combined statement of operations information for the six months ended June 30, 2020 assumes that the merger and disposition
were completed on January 1, 2020.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt"><B></B></FONT></P></DIV>

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<DIV STYLE="border: Black 1.5pt solid; padding: 5"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Note 3 &ndash; Adjustments</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">The pro forma adjustments included
in the unaudited pro forma condensed combined financial statements are as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(a)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Reflects the disposition of
                                         Lianluo Connection.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(b)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Reflects the elimination of
                                         Newegg&rsquo;s preferred stock and common stock upon consummation of the merger.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> <FONT STYLE="font-size: 10pt">(c)</FONT> </TD><TD> Reflects the elimination
                                         of accumulated deficit upon consummation of the merger and the disposition of Lianluo
                                         Connection. </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">(d)</FONT></TD><TD><FONT STYLE="font-size: 10pt">Reflects the issuance of 363,325,542
                                         common shares estimated to be issued in connection with the merger.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Note 4 &ndash; Earnings per Share</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 10pt">The unaudited pro forma combined
basic and diluted earnings per share calculations are based on the Company&rsquo;s historical weighted average number of shares
outstanding at each of the periods ended June 30, 2020 and December 31, 2019, adjusted by 363,325,542 shares estimated to be issued
in connection with the Merger.</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">Note 5 &ndash; Share Combination</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">On October 21, 2020, the Company
completed a share combination of its common shares at a ratio of one-for-eight, which decreased the Company&rsquo;s outstanding
Class A common shares from 17,685,475 shares to 2,210,683 shares and the Company&rsquo;s outstanding Class B common shares from
11,111,111 shares to 1,388,888 shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">This share combination also decreased
the Company&rsquo;s authorized shares to 6,250,000 common shares of par value of US$0.021848 each, of which 4,736,111 are designated
as Class A common shares and 1,513,889 are designated as Class B common shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">All outstanding options, warrants
and other rights to purchase the Company&rsquo;s common shares are adjusted proportionately as a result of the share combination.
The number of shares authorized for issuance under the Company&rsquo;s option plans are also proportionately reduced to reflect
the share combination.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">All share and per share information
contained in these unaudited pro forma condensed combined financial statements has been restated to retroactively show the effect
of this share combination.</FONT></P>

</div>
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<DIV STYLE="padding: 5; border: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="al_027"></A>EQUIVALENT AND
COMPARATIVE PER SHARE INFORMATION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table sets forth certain historical and pro
forma per share financial information for our common shares. The pro forma per share information gives effect to the merger
as if the merger had occurred on January 1, 2020 in the case of earnings per share for the six months ended June 30, 2020 and
January 1, 2019 in the case of earnings per share for the year ended December 31, 2019, and on June 30, 2020 in the case of
book value. The information in the table below has been derived from and should be read in conjunction with the historical
consolidated financial statements of the Company and Newegg included elsewhere in this proxy statement/prospectus.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The pro forma earnings per share was calculated using the methodology
described under the heading &ldquo;Unaudited Pro Forma Condensed Combined Financial Information&rdquo; included in this proxy
statement/prospectus above, and is subject to all the assumptions, adjustments and limitations described thereunder. The pro forma
information set forth below, while helpful in illustrating the financial characteristics of the combined company under one set
of assumptions, does not reflect the possible impact on the combined company that may result as a consequence of the arrangement
and, accordingly, does not attempt to predict or suggest future results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Company Historical</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Newegg Historical</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><B>Pro Forma</B></TD><TD STYLE="padding-bottom: 1.5pt"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Loss per share for the six months ended June 30, 2020</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left; padding-left: 0.125in">Basic</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(0.53</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">0.30</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right"><P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">0.05</P></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.125in">Diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.53</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.16</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right"><P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">0.05</P></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Loss per share for the year ended December 31, 2019</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.125in">Basic</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(2.00</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(20.01</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right"><P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">(0.05</P></TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0.125in">Diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(2.00</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(20.01</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right"><P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">(0.05</P></TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Book value per share as of June 30, 2020 <SUP>(1)</SUP></FONT></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.20</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(74.29</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.36</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">(1)</TD><TD>Calculated as total shareholders&rsquo; equity
                                         (deficit) divided by total common shares outstanding.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

</div>
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<DIV STYLE="padding: 5; border: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="al_028"></A>COMPARATIVE PER
SHARE MARKET PRICE AND DIVIDEND INFORMATION</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_029"></A>Market Information</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company&rsquo;s Class A common shares are listed for trading
on the NASDAQ Capital Market under the symbol &ldquo;LLIT.&rdquo; Newegg is a privately-held corporation and its securities do
not trade on any marketplace.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On [&nbsp;&nbsp; ], 2020, the last practicable trading day
prior to the date of this proxy statement/prospectus, there were [&nbsp;&nbsp; ] Class A common shares of the Company outstanding
and [&nbsp;&nbsp; ] shares of Newegg&rsquo;s capital stock outstanding. As of such date, the Company had [&nbsp;&nbsp; ] holders
of record of its Class A common shares and Newegg had [&nbsp;&nbsp; ] holders of record of its capital stock.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_030"></A>Recent Closing Prices and Comparative
Market Price Information</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table sets forth the closing sale price per
share of the Company&rsquo;s Class A common shares as reported on the NASDAQ Capital Market on October 23, 2020, the last
trading day before the public announcement of the merger agreement, and on [ ], 2020, the most recent trading day prior to
the date of this proxy statement/prospectus for which this information was available. The table also shows the implied value
of the merger consideration for each share of Newegg capital stock as of the same two dates. This implied value was
calculated by multiplying the closing sale price of a Class A common share of the Company on the relevant date by the
exchange ratio.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 0; font-size: 10pt; padding-right: 0; padding-left: 0; text-indent: 0"><B>&nbsp;</B></TD>
    <TD STYLE="font-size: 10pt; padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1.5pt solid"><B>Class A <BR> Common <BR> Shares</B></TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt"><B>&nbsp;</B></TD>
    <TD STYLE="font-size: 10pt; padding-bottom: 1.5pt"><B>&nbsp;</B></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1.5pt solid"><B>Implied per share<BR> value of merger<BR> consideration</B></TD>
    <TD STYLE="padding-bottom: 1.5pt; font-size: 10pt"><B>&nbsp;</B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-top: 0; width: 76%; font-size: 10pt; text-align: left; text-indent: 0; padding-left: 0; padding-right: 0">October 23, 2020</TD>
    <TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD>
    <TD STYLE="width: 9%; font-size: 10pt; text-align: right">3.2472</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD>
    <TD STYLE="width: 9%; font-size: 10pt; text-align: right">18.9692</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-top: 0; font-size: 10pt; text-align: left; text-indent: 0; padding-left: 0; padding-right: 0">[&nbsp;&nbsp;&nbsp;], 2020</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD>
    <TD STYLE="font-size: 10pt; text-align: right">[&nbsp;&nbsp;]</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD>
    <TD STYLE="font-size: 10pt; text-align: right">[&nbsp;&nbsp;]</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The market prices of the Company&rsquo;s Class A common shares
have fluctuated since the date of the announcement of the merger agreement and may continue to fluctuate from the date of this
proxy statement/prospectus to the date of the special meeting and the date the merger is completed and thereafter. No assurance
can be given concerning the market prices of our Class A common shares before or after completion of the merger. The market price
of our Class A common shares (and therefore the value of the merger consideration) when received by Newegg stockholders after
the merger is completed could be greater than, less than or the same as shown in the table above.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_031"></A>Dividend Policy</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To date, the Company has not paid any cash dividends on its
shares. As a BVI company, the Company may only declare and pay dividends if its directors are satisfied, on reasonable grounds,
that immediately after the distribution (i) the value of the Company&rsquo;s assets will exceed its liabilities and (ii) the Company
will be able to pay its debts as they fall due. We currently anticipate that we will retain any available funds to finance the
growth and operation of our business and we do not anticipate paying any cash dividends in the foreseeable future. Additionally,
our cash held in foreign countries may be subject to certain control limitations or repatriation requirements, limiting our ability
to use this cash to pay dividends.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For the year ended December 31, 2016, Newegg paid a cash dividend
of $0.1154 per share, which included a noncumulative dividend of $0.0016 per share, totaling $4.95 million to holders of Series
A convertible preferred stock.&nbsp; Additionally, Newegg paid a cash dividend of $0.6038 per share, which included a noncumulative
dividend of $0.49 per share, totaling $787 to the holder of Series B-1 redeemable convertible preferred stock at that time. Except
for the foregoing, Newegg has never declared or paid cash dividends on its capital stock. Newegg intends to retain all available
funds and any future earnings to fund the development and expansion of its business and does not anticipate paying any cash dividends
in the foreseeable future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

</div>
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<DIV STYLE="padding: 5; border: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="al_032"></A>CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This proxy statement/prospectus includes certain statements
that may constitute &ldquo;forward-looking statements&rdquo; within the meaning of Section&nbsp;27A of the Securities Act of 1933,
as amended, or the Securities Act, and Section&nbsp;21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act,
related to the Company, Newegg and the merger. All statements other than statements of historical fact are forward-looking statements
for purposes of federal and state securities laws. These forward-looking statements involve uncertainties that could significantly
affect the financial or operating results of the Company, Newegg or the combined company. These forward-looking statements may
be identified by terms such as &ldquo;anticipate,&rdquo; &ldquo;believe,&rdquo; &ldquo;foresee,&rdquo; &ldquo;expect,&rdquo; &ldquo;intend,&rdquo;
&ldquo;plan,&rdquo; &ldquo;may,&rdquo; &ldquo;will,&rdquo; &ldquo;could&rdquo; and &ldquo;should&rdquo; and the negative of these
terms or other similar expressions. Forward-looking statements in this document include, among other things, statements about
the potential benefits of the proposed merger and disposition, including future financial and operating results, plans, objectives,
expectations and intentions and the anticipated timing of closing of the merger and disposition. In addition, all statements that
address operating performance, events or developments that we expect or anticipate will occur in the future, including statements
relating to creating value for shareholders, benefits of the proposed transactions to customers, vendors, employees, shareholders
and other constituents of the combined company, integrating the two companies, cost savings and the expected timetable for completing
the proposed transactions, are forward-looking statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">These forward-looking statements involve substantial risks
and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Risks
and uncertainties include, among other things, risks related to the satisfaction of the conditions to closing proposed transactions
(including the failure to obtain necessary shareholder approvals) in the anticipated timeframe or at all; risks related to the
ability to realize the anticipated benefits of proposed transactions, including the possibility that the expected benefits from
the proposed transactions will not be realized or will not be realized within the expected time period; the risk that the businesses
will not be integrated successfully; disruption from proposed transactions making it more difficult to maintain business, contractual
and operational relationships; the unfavorable outcome of any legal proceedings that have been or may be instituted against the
Company or Newegg; failure to protect proprietary or personally identifiable data against unauthorized access or unintended release;
the ability to retain key personnel; negative effects of the announcement or the consummation of the proposed transactions on
the market price of our common shares, and on our operating results; significant transaction costs, fees, expenses and charges;
unknown liabilities; the risk of litigation and/or regulatory actions related to the proposed transactions; other business effects,
including the effects of industry, market, economic, political or regulatory conditions; future exchange and interest rates; changes
in tax and other laws, regulations, rates and policies; future business combinations or disposals; and competitive developments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition to the risks described under &ldquo;Risk Factors,&rdquo;
the following factors, among others, could cause actual future results and other future events to differ materially from those
currently estimated by management, including, but not limited to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the timing to complete the merger and the disposition;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the risk that a condition to completion of the merger
                                         or disposition may not be satisfied;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>our ability to achieve the synergies and value creation
                                         projected to be realized following the completion of the merger and disposition;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>our ability to promptly and effectively integrate Newegg&rsquo;s
                                         businesses;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the diversion of management time on transaction-related
                                         issues;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>risks related to any legal proceedings that may be instituted
                                         against the Company, Newegg and others relating to the merger or disposition;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the risk that the merger does not qualify for the intended
                                         tax treatment;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the effect of the announcement of the merger and disposition
                                         on the ability of the Company and Newegg to retain key employees, and to maintain business
                                         relationships with customers, vendors and others; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>changes in future cash requirements, capital requirements,
                                         results of operations, financial condition and/or cash flows.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">You should not put undue reliance on forward-looking statements.
No assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if
any of them do occur, what impact they will have on the results of operations, financial condition or cash flows of the Company
or Newegg. Actual results may differ materially from those discussed in this proxy statement/prospectus. All forward-looking statements
speak only as of the date of this proxy statement/prospectus and we assume no duty to update or revise forward-looking statements,
whether as a result of new information, future events, uncertainties or otherwise, as of any future date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

</div>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="al_033"></A>RISK FACTORS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>In addition to the other information contained in this proxy
statement/prospectus, including the matters addressed in &ldquo;Cautionary Statement Regarding Forward-Looking Statements,&rdquo;
you should carefully consider the following risk factors in determining whether to vote for the proposals described in this proxy
statement/prospectus. You should also read and consider the risk factors associated with each of the businesses of the Company
and Newegg because these risk factors may affect the operations and financial results of the combined company. </I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_034"></A>Risks Related to the Merger and Disposition</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The merger and disposition are is subject to a number
of conditions.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The&nbsp;merger agreement contains a number of conditions that
must be fulfilled (or waived by the parties) to complete the&nbsp;merger. These conditions include, among other customary conditions,
(i)&nbsp;the approval the merger proposal and all other proposals included in this proxy statement/prospectus by the Company&rsquo;s
shareholders, (ii) receipt of all consents from all governmental authorities or third parties, (iii)&nbsp;the absence of any order
by any governmental authority which has the effect of making the transactions or agreements contemplated by the merger agreement
or the disposition agreement illegal or which otherwise prevents or prohibits consummation of the transactions contemplated by
the merger agreement, (iv)&nbsp;the absence of any pending any claim, action, suit, proceeding, arbitration, mediation or investigation
brought by a third-party non-affiliate to enjoin or otherwise restrict the consummation of the merger or the disposition, (v)&nbsp;the
registration statement of which this proxy statement/prospectus forms a part shall have become effective under the Securities
Act and shall not be the subject of any stop order or proceedings seeking a stop order, (vi) the registration statement on Form
F-1 relating to a public offering of common shares of the Company shall have become effective under the Securities Act and shall
not be the subject of any stop order or proceedings seeking a stop order; (vii)&nbsp;the approval for listing on NASDAQ, subject
to official notice of issuance, of the common shares to be issued in the&nbsp;merger, (viii)&nbsp;subject to certain materiality
exceptions, the accuracy of certain representations and warranties of each of the parties contained in the&nbsp;merger agreement
and the compliance by each party with the covenants contained in the&nbsp;merger agreement, (ix)&nbsp;the absence of a material
adverse effect with respect to each of the parties thereto, and (x) the public offering shall have simultaneously closed along
with the merger, with the disposition closing immediately after the merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The disposition agreement contains the following closing conditions,
(i) obtaining any requisite regulatory approvals for the disposition, (ii) no law or order prohibiting or preventing consummation
of the disposition; (iii) no litigation to enjoy or otherwise restrict consummation of the disposition; (iv) our shareholder&rsquo;s
approval of the disposition; (v) the consummation of the merger with Newegg; and (vi) the conversion of debt that Lianluo Connection
owes to the Company into additional paid-in capital of Lianluo Connection.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The required satisfaction (or waiver) of the foregoing conditions
could delay the completion of the&nbsp;merger&nbsp;for a significant period of time or prevent it from occurring. Any delay in
completing the&nbsp;merger&nbsp;could cause the Company not to realize some or all of the benefits that the parties expect the
Company to achieve. Further, there can be no assurance that the conditions to the closing of the&nbsp;merger&nbsp;will be satisfied
or waived or that the&nbsp;merger&nbsp;will be completed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Certain of our director, executive officer and major
shareholders have interests in the merger and disposition that are different from, and may potentially conflict with, our interests
and the interests of our unaffiliated shareholders.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Certain of our directors, executive officers and major shareholders
have interests in the merger and disposition that may be different from, or in addition to, the interests of our unaffiliated
shareholders and that may create potential conflicts of interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Mr. Zhitao He, who currently controls approximately 86.6%
of our total voting power, also serves on the board of Newegg and beneficially owns approximately 61.3% of all issued and outstanding
shares of Newegg. Ms. Yingmei Yang, our Interim Chief Financial Officer and a director, also serves on the board of Newegg. The
beneficial ownership of our major shareholders and directorship of our officer in Newegg may create additional conflicts of interest
in respect of the merger and disposition. See &ldquo;Proposal I: The Merger&mdash;Interests of Directors, Executive Officers and
Major Shareholders in the Merger.&rdquo; </P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We may not have the ability to repurchase certain warrants.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In February and March 2020, we sold warrants exercisable for
an aggregate of 1,373,750 Class A common shares to certain investors in private placements in conjunction with a number of registered
direct offerings. The warrants are exercisable for five and one-half years from the date of issuance. On June 8, 2020, the registration
statement on Form F-1 registering for the resale of the Class A common shares issuable upon the exercise of such warrants went
effective.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Under certain circumstances, if a fundamental transaction
(as defined in the warrants) is consummated, holders of the warrants may require us to repurchase the remaining unexercised portion
of such warrants for an amount of cash equal to the value of the warrant as determined in accordance with the Black Scholes option
pricing model and the terms of the warrants. The Black Scholes model requires multiple input variables, such as the then effective
exercise price of the warrants, the then current market price of our Class A common shares, the time to expiration of the warrants,
the risk-free rate, and the volatility. While it is difficult for us to estimate the cash amount that we may need to pay warrant
holders upon the repurchase, we currently expect that the cash amount required to repurchase the warrants under the Black Scholes
option pricing model will be approximately $4.5 million, based on the closing price of $4.49 as of December 4, 2020, assumed exercise
price of $5.60, 5-year T-bill rate of 0.42%, implied volatility/HVT function of 109.6%, and assuming these are the prevailing
values on the redemption date, which is assumed to be March 1, 2021. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Our ability to repurchase the warrants depends on our available
cash resources at such time. We cannot assure you that upon closing of the Restructure, we will maintain sufficient cash reserves
or that our post-Restructure business will generate cash flow from operations at levels sufficient to permit us to repurchase
the warrants. </P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Failure to complete the merger and disposition could
negatively impact our business, financial condition, results of operations or share price.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Completion of the merger and disposition is conditioned upon
the satisfaction of certain closing conditions, including those discussed above, and other closing conditions customary for a
transaction of this size and type. The required conditions to closing may not be satisfied in a timely manner, if at all. If the
merger and disposition are not consummated for these or any other reasons, we may be subject to a number of adverse effects, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>we may be required under certain circumstances to pay
                                         Newegg a termination fee;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the price of our common shares may decline to the extent
                                         that the current market price reflects a market assumption that the merger and disposition
                                         will be completed;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>our operations may continue to incur loss;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>we may have difficulty maintaining compliance with NASDAQ
                                         continued listing rules, and as a result, be delisted from the NASDAQ Capital Market;
                                         and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>costs related to the merger and disposition, such as
                                         legal, accounting, financial advisory and printing fees, must be paid even if the merger
                                         and disposition are not completed.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Furthermore, if the merger is not completed, there can be no
assurance that we will be able to find another target business on terms as favorable as those of the merger agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Following the merger, our business may suffer as a result
of the lack of public company operating experience of new management.</I></B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Prior to the completion of the merger, Newegg has been a privately-held
company. Newegg&rsquo;s management will become members of our management after the merger but have limited experience managing
a publicly-traded company and complying with reporting and other obligations under securities law. The new management may not
successfully manage Newegg&rsquo;s transition into a public company which will be subject to significant regulatory oversight,
reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors. These
new responsibilities may require significant attention from management and could divert their attention and resources from the
management of our business, which could negatively affect the new management&rsquo;s ability to achieve the anticipated benefits
of the merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The transition to becoming the subsidiary of a
public company will require changes in the way that Newegg operates its business and incur additional expenses pertaining to
SEC reporting obligations and SEC compliance matters, and our disclosure controls and procedures may not prevent or detect
all errors or acts of fraud.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Private companies often have less regulated methods of operation
than public companies. This results in less transparency and presents greater risks of noncompliance with rules and regulations.
In anticipation of the proposed merger, Newegg&rsquo;s management has begun to implement a variety of measures to ensure that
the company follows the rules applicable to public companies in the United States. To the extent these new procedures and policies
could not change historical behaviors that might be inconsistent with the rules regulating U.S. public company, Newegg could be
at risk of violation or poor reporting as a public company following this transaction. In the event Newegg&rsquo;s directors or
executive officers inadvertently fail to identify, review or disclose a new relationship or arrangement causing us to fail to
properly disclose any related party transaction disclosures or in the event that we fail to comply with SEC reporting and internal
controls and procedures, we may be subject to securities laws violations that may result in additional compliance costs or costs
associated with SEC judgments or fines, both of which will increase our costs and negatively affect our potential profitability
and our ability to conduct our business. &nbsp;The public reporting requirements and controls are new for the management of the
Company post-merger, and may require us to obtain outside assistance from legal, accounting or other professionals that will increase
our costs of doing business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Newegg is not a publicly traded company, making it difficult
to determine the fair market value of Newegg.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The outstanding capital stock of Newegg is privately held and
is not traded on any public market, which makes it difficult to determine the fair market value of Newegg. There can be no assurance
that the merger consideration to be issued to Newegg stockholders will not exceed the actual value of Newegg.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We may fail to uncover all liabilities of Newegg&rsquo;s
business through the due diligence process prior to the merger, exposing us to potentially large, unanticipated costs. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Prior to completing the merger, we have and expect to
continue to perform, certain due diligence reviews of the Newegg&rsquo;s business. In view of timing and other considerations
relevant to our successfully achieving the closing of the merger, our due diligence reviews will necessarily be limited in
nature and may not adequately uncover all of the contingent or undisclosed liabilities we may incur as a consequence of the
merger. Any such liabilities could cause us potentially experience significant losses, which could materially
adversely affect our business, results of operations and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We have incurred and expect to continue to incur substantial
transaction-related costs in connection with the merger and disposition. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have incurred, and expect to continue to incur, a number
of non-recurring transaction-related costs associated with completing the merger and disposition. These fees and costs have been,
and will continue to be, substantial. Non-recurring transaction costs include, but are not limited to, fees paid to legal, financial
and accounting advisors, filing fees and printing costs. Additional unanticipated costs may be incurred, which may be higher than
expected and could have a material adverse effect on the new business&rsquo;s financial condition and operating results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The market price of our common shares may decline as
a result of the merger. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We could encounter larger than anticipated transaction-related
costs, may fail to realize some or all of the benefits anticipated from the merger or be subject to other factors that may adversely
affect preliminary estimates of the results of the merger. Any of these factors could delay the expected accretive effect of the
merger and contribute to a decrease in the price of our common shares. In addition, we are unable to predict the potential effects
of the issuance of common shares as the merger consideration on the trading activity and market price of our common shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our future results following the merger and disposition
may differ materially from the unaudited pro forma financial information included in this proxy statement/prospectus. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The unaudited pro forma financial information contained in
this proxy statement/prospectus is presented for purposes of presenting our historical consolidated financial statements with
the historical financial statements of Newegg, as adjusted to give effect to the merger and disposition, and is not necessarily
indicative of the financial condition or results of operations of the business following the merger and disposition. The assumptions
used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect our financial
condition and results of operations following the merger and disposition. Any change in our financial condition or results of
operations may cause significant variations in the price of our common shares. See &ldquo;Unaudited Pro Forma Condensed Combined
Financial Information&rdquo; for more information. &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>NASDAQ may not list or continue to list our common shares
on its exchange, which could prevent consummation of the merger or limit investors&rsquo; ability to make transactions in our
shares. Consequently, we may be subject to additional trading restrictions.</I></B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">It is a closing condition to merger that our common shares
continue to list on NASDAQ. The post-merger entity will be required to meet the initial listing standards of NASDAQ. We may not
be able to meet those initial listing requirements. Even if our securities are so listed, we may be unable to maintain the listing
of our securities in the future. If we fail to meet the initial listing requirements, neither we nor Newegg would be required
to consummate the merger. In the event that we and Newegg elected to waive this condition, we and our shareholders could face
significant material adverse consequences, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>limited availability of market quotations for our securities;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>limited amount of news coverage for the Company; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>decreased ability to issue additional securities or obtain
                                         additional financing in the future.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Newegg may not realize anticipated growth opportunities.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg expects that it will realize growth opportunities and
other financial and operating benefits as a result of the merger; however, it cannot predict with certainty if or when these growth
opportunities and benefits will occur, or the extent to which they actually will be achieved. For example, the benefits from the
merger may be offset by costs incurred as a result of being a public company. See &ldquo;Risks Relating to the Business of Newegg&rdquo;
below for more discussion of the risks relating to Newegg following the merger.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>Upon consummation of the merger, Mr. Zhitao He <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">and
Mr. Fred Chang will beneficially own approximately 61.16% and 36.11%, respectively, of the voting power of our issued and outstanding
common shares, and 97.26%, collectively, of the voting power of our issued and outstanding common shares. They will exert significant
influence on our business and operations and may have a conflict of interest with the minority shareholders. </FONT></I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
the consummation of merger, Mr. Zhitao He and Mr. Fred Chang will own approximately 61.16% and 36.11%, respectively, of the voting
power of our issued and outstanding common shares, and 97.26%, collectively. Additionally, Mr. Zhitao He and Mr. Fred Chang, both
of whom will serve as our directors upon closing, will be able to exercise substantial influence over our business and operations.
They may also have a conflict of interests with the minority shareholders. Where those conflicts exist, the minority shareholders
will be dependent upon Mr. He, Mr. Chang, and other directors exercising, in a manner fair to all of our shareholders, their fiduciary
duties. Also, Mr. He and Mr. Chang will have the ability to control the outcome of most corporate actions requiring shareholder
approval, including the sale of all or substantially all of our assets and amendments to our Memorandum and Articles of Association.
Moreover, such concentration of voting power could have the effect of delaying, deterring, or preventing a change of control or
other business combination, which may, in turn, have an adverse effect on the market price of our shares or prevent our minority
shareholders from realizing a premium over the then-prevailing market price for their shares.&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Certain provisions of an Amended and Restated Shareholders Agreement
may delay or prevent us from raising funding in the future and may have an adverse impact on us and the liquidity and market price
of our common shares.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Prior to the merger, Newegg&rsquo;s stockholders have entered
into that certain stockholders agreement, dated March 30, 2017. In connection with the merger, we will assume that agreement and
enter into an amended and restated shareholders agreement with Digital Grid and certain stockholders of Newegg (which we collectively
refer to as the principal shareholders).</P>

<P STYLE="font: 6pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Under the amended and restated shareholders agreement, the principal
shareholders will have pre-emptive rights to acquire additional shares when the Company issues or sells additional securities in
the future, except for the &ldquo;excluded issuance&rdquo; as defined in the amended and restated shareholders agreement or common
shares offered pursuant to a registration statement filed with the SEC.</P>

<P STYLE="font: 6pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, the Company and the principal shareholders will
have rights of first refusal, subject to compliance with applicable laws and NASDAQ&rsquo;s rules. If any principal shareholder
receives a bona fide offer from any person other than its affiliate for any common shares that such principal shareholder received
in connection with the merger, then the Company will have a right of first refusal, but not the obligation, to elect to purchase
all (and not less than all) of such shares, at the same price, and on the same terms and conditions offered by the purchaser. In
the event the Company does not decide to purchase such shares or decides to purchase for less than all of such shares, then each
of the principal shareholders other than the selling principal shareholder shall have a right of first refusal to elect to purchase
all (and not less than all) of its pro rata share (as defined in the amended and restated shareholders agreement) of such shares
on the same terms and conditions offered by the purchaser. In the event that such shares are in exchange for non-cash consideration,
then such right of first refusal shall be exercisable based on the fair market value determined in good faith by the board of such
non-cash consideration.</P>

<P STYLE="font: 6pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Such right of first refusal and pre-emptive rights may delay
or prevent us from raising funding in the future and may have an adverse impact on the liquidity and market price of our common
shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The amended and restated memorandum and articles of association
to be adopted at the special meeting provide certain rights to certain shareholders, which will limit your ability to influence
corporate matters and could discourage others from pursuing any change of control transactions that minority holders of common
shares may view as beneficial.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Upon completion of the merger, our board of directors will consist
of up to seven directors. Initially, four of the directors shall be appointed by Digital Grid, which will own approximately [&nbsp;&nbsp;&nbsp;&nbsp;]%
of our total voting power upon completion of the merger, and three of the directors shall be appointed by a representative which
is selected by certain stockholders of Newegg, who collectively will own approximately [&nbsp;&nbsp;&nbsp; ]% of our total voting
power upon completion of the merger. The number of directors that Digital Grid and the representative are entitled to appoint will
decrease proportionately with the decrease of the respective voting power of Digital Grid and such stockholders of Newegg. Any
director positions which neither Digital Grid nor the legacy shareholders are entitled to appoint shall be appointed by the remaining
directors, or by any other means allowed under our amended and restated memorandum and articles of association.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">Upon completion of the merger, you will have no right to appoint
any director to our board. The amended and restated memorandum and articles of association to be adopted at the special meeting
will limit your ability to appoint persons for service on our board of directors and may discourage proxy contests for the election
of directors and purchases of substantial blocks of shares by making it more difficult for a potential acquirer to gain control
of our board of directors. See &ldquo;Proposal VII: Charter Amendment&mdash;Purpose and Effect of Charter Amendment&rdquo; for
more information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>There can be no assurances that Newegg stockholders
will not be required to recognize gain for U.S. federal income tax purposes upon the exchange of Newegg stock for common shares
of the Company stock in the merger. </I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The Company and Newegg have structured the merger with the
intent that it will qualify as a tax-free &ldquo;reorganization&rdquo; within the meaning of Section 368(a) of the Code, specifically
as a non-taxable &ldquo;reverse subsidiary merger&rdquo; under Section 368(a)(2)(E) of the Code. However, the qualification of
the merger as a tax-free reorganization depends on compliance with numerous technical requirements. The Company and Newegg have
not sought and will not seek any ruling from the IRS regarding any matter affecting the merger or any of the United States federal
income tax consequences discussed herein, and have not sought and will not seek any tax opinion from their respective legal counsel
regarding the qualification of the merger as a tax-free &ldquo;reorganization&rdquo; within the meaning of Section 368(a) of the
Code. Thus, there can be no assurance that the IRS will ultimately conclude that the merger does meet all of the requirements
for qualification as a &ldquo;reorganization&rdquo; within the meaning of Section 368(a) of the Code and otherwise as a tax-free
transaction, and there can be no assurance that any of the other statements made herein would not be challenged by the IRS and,
if so challenged, would be sustained upon review in a court. A successful challenge by the IRS could result in taxable income
to Newegg and its stockholders. ACCORDINGLY, EACH STOCKHOLDER SHOULD CONSULT WITH SUCH STOCKHOLDER&rsquo;S OWN TAX ADVISER WITH
RESPECT TO ALL OF THE POTENTIAL TAX CONSEQUENCES OF THE MERGER.&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_035"></A>Risks Related to the Business of
the Company</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I><U>Risks Relating to Our Business</U></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The outbreak of coronavirus may have a material adverse
effect on our business and the trading price of our common shares.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our business has been adversely affected by the outbreak of
coronavirus, or COVID-19. The World Health Organization labelled the COVID-19 outbreak a pandemic on March 11, 2020, after the
disease spread globally. Given the high public health risks associated with the disease, governments around the world have imposed
various degrees of travel and gathering restrictions and other quarantine measures. Businesses in China have scaled back or suspended
operations since the outbreak in December 2019. The COVID-19 outbreak is currently having an indeterminable adverse impact on
the global economy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">All of our operating subsidiaries are located in China. Substantially
all of our employees and all of our customers and suppliers are located in China. From January to February 2020, our service revenue
plunged, as the number of patient users decreased sharply; and our revenue from the sale of products also dropped, because our
distributors and sales personnel were trapped at home and our contract manufacturers shut down production during this period.
Constrained by the epidemic, management and employees have been working from home to mitigate the impacts of operation disruptions
caused by COVID-19. As of the date of this proxy statement/prospectus, we have resumed operations but at below normal levels.
Medical check-up centers and hospitals in China that we have business relationships with have partially resumed operations since
March 2020, including the medical check-up centers in Wuhan that focus on physical examinations. In addition, while our supply
chains currently are not affected, it is unknown whether or how they may be affected if the pandemic persists for an extended
period. The COVID-19 pandemic has a limited adverse impact on our operating results for the first six months of 2020, compared
to that for the same period of 2019, but may materially adversely impact our results of operations for the fiscal year ending
December 31, 2020, depending on COVID-19&rsquo;s future developments and actions taken to contain it</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, fears of the economic impacts of COVID-19 have
sparked share prices to fluctuate significantly recently. The volatility of share prices and across-the-market selloff may depress
our share price, and moreover, adversely affect our ability to obtain equity or debt financings from the financial market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Given the uncertainty of the outbreak, the spread of COVID-19
may be prolonged and worsened, and we may be forced to further scale back or even suspend our operations. As COVID-19 spreads
outside China, the global economy is suffering a noticeable slowdown. If this outbreak persists, commercial activities throughout
the world could be curtailed with decreased consumer spending, business operation disruptions, interrupted supply chain, difficulties
in travel, and reduced workforces. The duration and intensity of disruptions resulting from COVID-19 outbreak is uncertain. It
is unclear as to when the outbreak will be contained, and we also cannot predict if the impact will be short-lived or long-lasting.
The extent to which outbreak impacts our financial results will depend on its future developments. If the outbreak of COVID-19
is not effectively controlled in a short period of time, our business operation and financial condition may be materially and
adversely affected as a result of any slowdown in economic growth, operation disruptions or other factors that we cannot predict.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our business is seasonal and revenues and operating results
could fall below investor expectations during certain periods, which could cause the trading price of our common shares to decline.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our revenues and operating results have fluctuated in the past
and may continue to fluctuate significantly depending upon numerous factors. In particular, we generally experience an increase
in revenues in the period from March through May, and September through December. The increase in the fourth quarter is associated
with hospital purchasing designed to extinguish governmental budgets prior to the fiscal year end. We believe that our first quarter
performance will generally decline as a result of the lack of business conducted during the Chinese Lunar New Year holiday. To
the extent our financial performance fluctuates significantly, investors may lose confidence in our business and the price of
our common shares could decrease.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We may fail to effectively develop and commercialize
new products and services, which could materially and adversely affect our business, financial condition, results of operations
and prospects.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The sleep respiratory market is developing rapidly, and related
technology trends are constantly evolving. This results in the frequent introduction of new products and services, short product
life cycles and significant price competition. Consequently, our future success depends on our ability to anticipate technology
development trends and identify, develop and commercialize in a timely and cost-effective manner the new and advanced products
that our customers demand. Moreover, it may take an extended period of time for our new products to gain market acceptance, if
at all. Furthermore, as the life cycle for a product matures, the average selling price generally decreases. In the future, we
may be unable to offset the effect of declining average sales prices through increased sales volume and controlling product costs.
Lastly, during a product&rsquo;s life cycle, problems may arise regarding regulatory, intellectual property, product liability
or other issues that may affect the product&rsquo;s continued commercial viability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">New sleep respiratory disorder related technology and relevant
regulation could materially affect provision of our OSAS service to hospitals and medical centers. Development of our OSAS service
business depends on our ability to decrease OSAS service-related device production cost and the relationship with hospital and
medical center. It may take an extended period of time for us to decrease the cost of our new devices and to market our new devices.
We may be unable to provide service to sufficient hospitals and medical centers, which could adversely affect our financial condition
and results of operations and prospects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We sell our products primarily to distributors, and our
technical services are provided to hospitals and check-up centers; our ability to add distributors, hospitals and check-up centers
will impact our revenue growth. Failure to maintain or expand our distribution network and network of hospitals and check-up centers
would materially and adversely affect our business.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We depend on sales to distributors for a significant majority
of our product revenues. Our distributors purchase all products ordered regardless of whether the products are ultimately sold.
Products are not purchased by distributors on consignment, and distributors have no right to return unsold products. As our existing
distributor agreements expire, we may be unable to renew such agreements on favorable terms or at all, and we do not own, employ
or control these independent distributors. Furthermore, we actively manage our distribution network and regularly review the performance
of each distributor. We may terminate agreements with distributors, without penalty, if we are not satisfied with their performance
for any reason. We periodically terminate relationships with underperforming exclusive distributors. Our distributors may also
terminate their relationship with us without penalty. When an exclusive distributor in a particular geographic area fails to meet
our expectations, then we are economically incentivized to replace that distributor with a new distributor so that area can be
served as well as possible. We occasionally terminate a relationship with a non-exclusive distributor and are more likely to simply
appoint another one; however, we have found that in some instances we are better served to replace an underperforming non-exclusive
distributor with an exclusive distributor. Additionally, we have found that even in cases where there may not be an economic incentive
to terminate a non-exclusive distributor, having the ability to replace a distributor often motivates distributors to increase
their efforts to meet our expectations. This policy may make us less attractive to some distributors. In addition, we compete
for distributors with other medical device companies who may enter into long-term distribution agreements, effectively preventing
many distributors from selling our products. As a result, a significant amount of time and resources must be devoted to maintaining
and growing our distribution network.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In the OSAS sector, starting from fiscal 2018 we provide technical
services in relation to detection and analysis of OSAS. We focused on the promotion of sleep respiratory solutions and service
in public hospitals. Our wearable sleep diagnostic products and cloud-based services are also available in the medical centers
of private preventive healthcare companies in China. We sign service agreements with public hospitals usually for a period of
1 to 3 years, and check-up centers usually for a period of one year or less, with the aim of provision of wearable sleep diagnostic
products and cloud-based services and we charge a fixed technical service fee on a per user basis when our OSAS diagnostic services
are provided to the user at medical centers and public hospitals. Our service revenue is dependent on the number of OSAS tests
performed by each hospital/check-up center. The provision of these OSAS diagnosis services is still in its early stage and we
may be required to invest more marketing efforts in order to build up and consolidate our partnership with hospitals and physical
examination centers in China. We may terminate relationships with underperforming hospital/check-up center. The hospital/check-up
may also terminate their relationship with us without penalty, and they may not renew their service agreement with us upon expiration.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Although we do not own or control our distributors, the
actions of these distributors may affect our business operations or our reputation in the marketplace.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our distributors are independent from us, and as such, our
ability to effectively manage their activities is limited. Distributors could take any number of actions that could have material
adverse effects on our business. If we fail to adequately manage our distribution network or if distributors do not comply with
our distribution agreements, our corporate image could be tarnished among end users, disrupting our sales. Furthermore, we could
be liable for actions taken by our distributors, including any violations of applicable law in connection with the marketing or
sale of our products, including China&rsquo;s anti-corruption laws. The PRC government has increased its anti-bribery efforts
in the healthcare sector in recent years to reduce improper payments received by hospital administrators and doctors in connection
with the purchase of pharmaceutical products and medical devices. Our distributors may violate these laws or otherwise engage
in illegal practices with respect to their sales or marketing of our products. If our distributors violate these laws, we could
be required to pay damages or fines, which could materially and adversely affect our financial condition and results of operations.
In addition, our brand and reputation, our sales activities or the price of our shares could be adversely affected if we become
the target of any negative publicity as a result of actions taken by our distributors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We are highly dependent on our key personnel such as
key executives.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We are highly dependent on the continued service of our key
executives, including our Chief Executive Officer, Mr. Bin Lin, and other key personnel. We have entered into standard three-year
employment contracts, or where required by law, open-term employment contracts, with all of our officers and managers and other
key personnel, and three-year employment contracts, or where required by law, open-term employment contracts with our other employees.
These contracts prohibit our employees from engaging in any conduct or activity that would be competitive with our business during
the term of their employment. Loss of any of our key personnel could severely disrupt our business. We may not be able to find
suitable or qualified replacements and will likely incur additional expenses in order to recruit and train any new personnel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In 2019, our PRC subsidiaries, namely Lianluo Connection and
Beijing Dehaier, laid off a total of over fifty employees, due to a business downturn and the need of business restructuring.
Notwithstanding, our future success depends on our ability to attract and retain skilled personnel and failure to do so could
result in disruptions to our business and growth.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our business is subject to intense competition, which
may reduce demand for our products and materially and adversely affect our business, financial condition, results of operations
and prospects.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The medical device and health wearables markets are highly
competitive, and we expect competition to intensify. Given the huge stimulus initiative in China and its impact on healthcare,
we expect the availability of healthcare to increase, as more hospitals and clinics are developed rurally.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We face direct competition from both domestic and international
competitors across all product lines and price points. Our competitors also vary by product. Currently, in China our competitors
include publicly traded and privately held multinational companies. As we expand into international markets, we expect that our
competitors will primarily be publicly traded and privately held multinational companies. We also expect to face competition in
international sales from companies that have local operations in the markets in which we sell our products. Some of our larger
competitors may have:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>greater financial and other resources;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0"></P>

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<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>larger variety of products;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>more products that have received regulatory approvals;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>greater pricing flexibility;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>more extensive research and development and technical
                                         capabilities;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>patent portfolios that may present an obstacle to our
                                         conduct of business;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>greater knowledge of local market conditions where we
                                         seek to make our international sales;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>stronger brand recognition; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>larger sales and distribution networks.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As a result, we may be unable to offer products similar to,
or more desirable than, those offered by our competitors, market our products as effectively as our competitors or otherwise respond
successfully to competitive pressures. In addition, our competitors may be able to offer discounts on competing products as part
of a &ldquo;bundle&rdquo; of non-competing products, systems and services that they sell to our customers, and we may not be able
to profitably match those discounts. Our competitors may develop technologies and products that are more effective than those
we currently offer or that render our products obsolete or uncompetitive. The timing of the introduction of competing products
into the market could affect the market acceptance and market share of our products. As we expect demand for our products to increase
along with the availability of healthcare, we must continue to focus on competitive pricing and innovation by being at the forefront
of market trends and improving our product and service offerings. Our failure to compete successfully could materially and adversely
affect our business, financial condition, results of operations and prospects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Some of our internationally based competitors may establish
production or research and development facilities in China, while others may enter into cooperative business arrangements with
Chinese manufacturers. If we are unable to develop competitive branded products, obtain regulatory approval or clearance and supply
sufficient quantities to the market as quickly and effectively as our competitors, market acceptance of our branded products may
be limited, which could result in decreased sales. In addition, we may not be able to maintain our branded products&rsquo; cost
advantages.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We believe that corrupt practices in the medical device industry
in China still occur. To increase sales, certain manufacturers or distributors of medical devices may pay kickbacks or provide
other benefits to hospital personnel who make procurement decisions. Our company policy prohibits these practices by our direct
sales personnel and our distribution agreements require our distributors to comply with applicable law. As competition intensifies
in the medical device industry in China, we may lose sales, customers or contracts to competitors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If we fail to accurately project demand for our products,
we may encounter problems of inadequate supply or oversupply, which would materially and adversely affect our financial condition
and results of operations, as well as damage our reputation and brand.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our distributors typically order our products on a purchase
order basis. We project demand for our products based on rolling projections from our distributors, our understanding of anticipated
hospital procurement spending, and distributor inventory levels. The varying sales and purchasing cycles of our distributors and
other customers, however, makes it difficult for us to forecast future demand accurately.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If we overestimate demand, we may purchase more unassembled
parts or components for our branded products than we require. If we underestimate demand, our third-party suppliers may have inadequate
supply of parts or product component inventories, which would delay shipments of our branded products, and could result in lost
sales. In particular, we are seeking to reduce our procurement and inventory costs by matching our inventory closely with our
projected product needs and by, from time to time, deferring our purchase of components in anticipation of supplier price reductions.
As we seek to balance reduced inventory costs, we may fail to accurately forecast demand and coordinate our procurement to meet
demand on a timely basis. Our inability to accurately predict our demand and to timely meet our demand could materially and adversely
affect our financial conditions and results of operations as well as damage our reputation and corporate brand.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Failure to effectively restructure our business could
materially and adversely affect our business and prospects.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We experienced a business downturn in 2019 and terminated over
fifty employees&rsquo; employment. Currently, we are making efforts to overcome such downturn by restructuring our business. Our
business restructuring strategy includes strengthening our brand, increasing market penetration of our existing products, developing
new products, increasing our targeting of the sleep respiratory market in China, and embarking on exports. Pursuing these strategies
requires, among other things:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>continued enhancement of our research and development
                                         capabilities;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>information technology system enhancement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>stringent cost controls and sufficient liquidity;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>strengthening of financial and management controls and
                                         information technology systems; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>increased marketing, sales and support activities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If we are not able to restructure our business successfully,
we may not be able to overcome our business downturn, and our prospects would be materially and adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If we fail to obtain or maintain applicable regulatory
clearances or approvals for our products, or if such clearances or approvals are delayed, we will be unable to commercially distribute
and market our products at all or in a timely manner, which could significantly disrupt our business and materially and adversely
affect our sales and profitability.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The sale and marketing of our products are subject to regulation
in China. For a significant portion of our sales, we need to obtain and renew licenses and registrations with the China Food and
Drug Administration, or CFDA. The processes for obtaining regulatory clearances or approvals can be lengthy and expensive, and
the results are unpredictable. In addition, the relevant regulatory authorities may introduce additional requirements or procedures
that have the effect of delaying or prolonging the regulatory clearance or approval for our existing or new products. If we are
unable to obtain clearances or approvals needed to market existing or new branded products, or obtain such clearances or approvals
in a timely fashion, our business would be significantly disrupted, and our sales and profitability could be materially and adversely
affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We generate a significant portion of our revenues from
a small number of products, and a reduction in demand for any of these products could materially and adversely affect our financial
condition and results of operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We derive a substantial percentage of our revenues from a small
number of products. We expect that a small number of our key products will continue to account for a significant portion of our
net revenues for the foreseeable future. As a result, continued market acceptance and popularity of these products is critical
to our success, and a reduction in demand due to, among other factors, the introduction of competing products by our competitors,
the entry of new competitors, or end-users&rsquo; dissatisfaction with the quality of these products could materially and adversely
affect our financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If we fail to protect our intellectual property rights,
it could harm our business and competitive position.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We rely on a combination of patent, copyright, trademark and
trade secret laws and non-disclosure agreements and other methods to protect our intellectual property rights. The process of
seeking patent protection can be lengthy and expensive, our patent applications may fail to result in patents being issued, and
our existing and future patents may be insufficient to provide us with meaningful protection or commercial advantage. Our patents
and patent applications may also be challenged, invalidated or circumvented.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We also rely on trade secret rights to protect our business
through non-disclosure provisions in employment agreements with employees. If our employees breach their non-disclosure obligations,
we may not have adequate remedies in China, and our trade secrets may become known to our competitors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Intellectual property rights and confidentiality protections
in China may not be as effective as in the United States or other western countries. Furthermore, policing unauthorized use of
proprietary technology is difficult and expensive, and we may need to resort to litigation to enforce or defend patents issued
to us or to determine the enforceability, scope and validity of our proprietary rights or those of others. Such litigation and
an adverse determination in any such litigation, if any, could result in substantial costs and diversion of resources and management
attention, which could harm our business and competitive position.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We may be exposed to intellectual property infringement
and other claims by third parties which, if successful, could disrupt our business and have a material adverse effect on our financial
condition and results of operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our success depends, in large part, on our ability to use and
develop our technology and know-how without infringing third party intellectual property rights. If we sell our branded products
internationally, and as litigation becomes more common in China, we face a higher risk of being the subject of claims for intellectual
property infringement, invalidity or indemnification relating to other parties&rsquo; proprietary rights. Our current or potential
competitors, many of which have substantial resources and have made substantial investments in competing technologies, may have
or may obtain patents that will prevent, limit or interfere with our ability to make, use or sell our branded products in either
China or other countries, including the United States and other countries in Asia. The validity and scope of claims relating to
medical device technology patents involve complex scientific, legal and factual questions and analysis and, as a result, may be
highly uncertain. In addition, the defense of intellectual property suits, including patent infringement suits, and related legal
and administrative proceedings can be both costly and time consuming and may significantly divert the efforts and resources of
our technical and management personnel. Furthermore, an adverse determination in any such litigation or proceedings to which we
may become a party could cause us to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>pay damage awards;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>seek licenses from third parties;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>pay ongoing royalties;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>redesign our branded products; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>be restricted by injunctions.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Each of the foregoing could effectively prevent us from pursuing
some or all of our business and result in our customers or potential customers deferring or limiting their purchase or use of
our branded products, which could have a material adverse effect on our financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We are subject to product liability exposure and currently
do not have insurance coverage for product-related liabilities. Any product liability claims or potential safety-related regulatory
actions could damage our reputation and materially and adversely affect our business, financial condition and results of operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The medical devices we assemble and sell can expose us to potential
product liability claims if the use of these products causes or is alleged to have caused personal injuries or other adverse effects.
Any product liability claim or regulatory action could be costly and time-consuming to defend. If successful, product liability
claims may require us to pay substantial damages. We do not maintain product liability insurance to cover potential product liability
arising from the use of our branded products because product liability insurance available in China offers only limited coverage
compared to coverage offered in many other countries. As we expand our sales internationally and increase our exposure to these
risks in many countries, we may be unable to obtain sufficient product liability insurance coverage on commercially reasonable
terms, or at all. A product liability claim or potential safety-related regulatory action, with or without merit, could result
in significant negative publicity and could materially and adversely affect the marketability of our branded products and our
reputation, as well as our business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Moreover, a material design, manufacturing or quality failure
or defect in our branded products, other safety issues or heightened regulatory scrutiny could each warrant a product recall by
us and result in increased product liability claims. Also, if these products are deemed by the authorities in China where we currently
sell our branded products to fail to conform to product quality and safety requirements, we could be subject to regulatory action.
In China, violation of PRC product quality and safety requirements may subject us to confiscation of related earnings, penalties,
an order to cease sales of the violating product, or to cease operations pending rectification. Furthermore, if the violation
is determined to be serious, our business license to assemble or sell violating and other products could be suspended or revoked.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We may undertake acquisitions, which may have a material
adverse effect on our ability to manage our business, and may end up being unsuccessful.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our growth strategy may involve the acquisition of new technologies,
businesses, products or services or the creation of strategic alliances in areas in which we do not currently operate. We do not
have any commitment or agreement in place with regard to any such acquisitions at this time. These acquisitions could require
that our management develop expertise in new areas, manage new business relationships and attract new types of customers. Furthermore,
acquisitions may require significant attention from our management, and the diversion of our management&rsquo;s attention and
resources could have a material adverse effect on our ability to manage our business. We may also experience difficulties integrating
acquisitions into our business and operations. Future acquisitions may also expose us to potential risks, including risks associated
with:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the integration of new operations, services and personnel;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>unforeseen or hidden liabilities;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the diversion of resources from our existing businesses
                                         and technologies;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>our inability to generate sufficient revenue to offset
                                         the costs of acquisitions; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>potential loss of, or harm to, relationships with employees
                                         or customers, any of which could significantly disrupt our ability to manage our business
                                         and materially and adversely affect our business, financial condition and results of
                                         operations.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We may need additional capital in the future, and we
may be unable to obtain such capital in a timely manner or on acceptable terms, if at all.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In order for us to grow, remain competitive, develop new products,
and expand our distribution network, we may require additional capital in the future. Our ability to obtain additional capital
in the future is subject to a variety of uncertainties, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>our future financial condition, results of operations
                                         and cash flows;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>general market conditions for capital raising activities
                                         by medical device manufacturers and other related companies; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>economic, political and other conditions in China and
                                         elsewhere.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may be unable to obtain additional capital in a timely manner
or on acceptable terms or at all. Furthermore, the terms and amount of any additional capital raised through issuances of equity
securities may result in significant shareholder dilution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If we experience a significant number of warranty claims,
our costs could substantially increase and our reputation and brand could suffer.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We typically sell our branded products with standard warranty
terms covering 12 months after purchase. Our branded product warranty requires us to repair all mechanical malfunctions and, if
necessary, replace defective components. We accrue liability for potential warranty claims at the time of sale. If we experience
an increase in warranty claims or if our repair and replacement costs associated with warranty claims increase significantly,
we may have to accrue a greater liability for potential warranty claims. Moreover, an increase in the frequency of warranty claims
could substantially increase our costs and harm our reputation and brand. Our business, financial condition, results of operations
and prospects may suffer materially if we experience a significant increase in warranty claims on our branded products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If our security measures are breached or fail, and unauthorized
access to a client&rsquo;s data is obtained, our services may be perceived as not being secure, clients may curtail or stop using
our services, and we may incur significant liabilities.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our products and services involve the web-based storage and
transmission of clients&rsquo; proprietary information and protected health information of patients. Because of the sensitivity
of this information, security features of our software are very important. From time to time we may detect vulnerabilities in
our systems, which, even if they do not result in a security breach, may reduce customer confidence and require substantial resources
to address. If our security measures are breached or fail as a result of third-party action, employee error, malfeasance, insufficiency,
defective design, or otherwise, someone may be able to obtain unauthorized access to client or patient data. As a result, our
reputation could be damaged, our business may suffer, and we could face damages for contract breach, penalties for violation of
applicable laws or regulations, and significant costs for remediation and efforts to prevent future occurrences. We rely upon
our clients as users of our system for key activities to promote security of the system and the data within it, such as administration
of client-side access credentialing and control of client-side display of data. On occasion, our clients have failed to perform
these activities. Failure of clients to perform these activities may result in claims against us that this reliance was misplaced,
which could expose us to significant expense and harm to our reputation. Because techniques used to obtain unauthorized access
or to sabotage systems change frequently and generally are not recognized until launched against a target, we may be unable to
anticipate these techniques or to implement adequate preventive measures. If an actual or perceived breach of our security occurs,
the market perception of the effectiveness of our security measures could be harmed and we could lose sales and clients. In addition,
our clients may authorize or enable third parties to access their client data or the data of their patients on our systems. Because
we do not control such access, we cannot ensure the complete propriety of that access or integrity or security of such data in
our systems.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If our services fail to provide accurate and timely information,
or if our content or any other element of any of our services is associated with faulty clinical decisions or treatment, we could
have liability to clients, clinicians, or patients, which could adversely affect our results of operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our products, software, content, and services are used to assist
clinical decision-making and provide information about treatment plans. If our products, software, content, or services fail to
provide accurate and timely information or are associated with faulty clinical decisions or treatment, then clients, clinicians,
or their patients could assert claims against us that could result in substantial costs to us, harm our reputation in the industry,
and cause demand for our services to decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The assertion of such claims and ensuing litigation, regardless
of its outcome, could result in substantial cost to us, divert management&rsquo;s attention from operations, damage our reputation,
and decrease market acceptance of our products and services. We attempt to limit by contract our liability for damages and to
require that our clients assume responsibility for medical care and approve key system rules, protocols, and data. Despite these
precautions, the allocations of responsibility and limitations of liability set forth in our contracts may not be enforceable,
be binding upon patients, or otherwise protect us from liability for damages.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our proprietary software may contain errors or failures that
are not detected until after the software is introduced or updates and new versions are released. It is challenging for us to
test our software for all potential problems because it is difficult to simulate the wide variety of computing environments or
treatment methodologies that our clients may deploy or rely upon. From time to time we have discovered defects or errors in our
software, and such defects or errors can be expected to appear in the future. Defects and errors that are not timely detected
and remedied could expose us to risk of liability to clients, clinicians, and patients and cause delays in introduction of new
services, result in increased costs and diversion of development resources, require design modifications, or decrease market acceptance
or client satisfaction with our services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I></I></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We rely on Internet infrastructure, bandwidth providers,
other third parties, and our own systems for providing services to our users, and any failure or interruption in the services
provided by these third parties or our own systems could expose us to litigation and negatively impact our relationships with
users, adversely affecting our brand and our business.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our ability to deliver our Internet and telecommunications-based
services is dependent on the development and maintenance of the infrastructure of the Internet and other telecommunications services
by third parties. This includes maintenance of a reliable network backbone with the necessary speed, data capacity, and security
for providing reliable Internet access and services. Our services are designed to operate without interruption in accordance with
our service level commitments. However, we have experienced and expect that we will experience interruptions and delays in services
and availability from time to time. We rely on internal systems as well as third-party vendors, including data center, bandwidth,
and telecommunications equipment providers, to provide our services. We do not maintain redundant systems or facilities for some
of these services. In the event of a catastrophic event with respect to one or more of these systems or facilities, we may experience
an extended period of system unavailability, which could negatively impact our relationship with users. Any disruption in the
network access, telecommunications, or co- location services provided by these third-party providers or any failure of or by these
third-party providers or our own systems to handle current or higher volume of use could significantly harm our business. We exercise
limited control over these third-party vendors, which increases our vulnerability to problems with services they provide.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Any errors, failures, interruptions, or delays experienced
in connection with these third-party technologies and information services or our own systems could negatively impact our relationships
with users and adversely affect our business and could expose us to third-party liabilities. The reliability and performance of
the Internet may be harmed by increased usage or by denial-of-service attacks. The Internet has experienced a variety of outages
and other delays as a result of damages to portions of its infrastructure, and it could face outages and delays in the future.
These outages and delays could reduce the level of Internet usage as well as the availability of the Internet to us for delivery
of our Internet-based services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If we are unable to keep up with the rapid technological
changes of the internet industry, our business may suffer.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The internet industry is experiencing rapid technological changes.
The future success of our cloud-based services will depend on our ability to anticipate, adapt and support new technologies and
industry standards. If we fail to anticipate and adapt to these and other technological changes, our market share, profitability
and share price could suffer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our internal control over financial reporting is not
effective and has material weaknesses.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We are subject to the reporting obligations under the U.S.
securities laws. The SEC, as required under Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, has adopted rules requiring
public companies to include a report of management on the effectiveness of such companies&rsquo; internal control over financial
reporting in their respective annual reports. This proxy statement/prospectus does not include an attestation report of our registered
public accounting firm regarding internal control over financial reporting because we are currently a non-accelerated filer and
therefore not required to obtain such report.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our management has concluded that under the rules of Section
404, our internal control over financial reporting was not effective as of December 31, 2019. A material weakness is a deficiency,
or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement
of our financial statements will not be prevented, or detected and corrected on a timely basis. The material weakness we identified
is insufficient qualified accounting personnel with appropriate understanding of U.S. GAAP and SEC reporting requirements commensurate
with our financial reporting requirements. Also, as a small company, we do not have sufficient internal control personnel to set
up adequate review functions at each reporting level.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We are in the process of implementing measures to resolve the
material weakness and improve our internal and disclosure controls. However, we may not be able to successfully implement the
remedial measures. The implementation of our remedial initiatives may not fully address the material weakness in our internal
control over financial reporting. In addition, 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 economic and regulatory environments
and to expend significant resources to maintain a financial reporting system that is adequate in satisfying our reporting obligations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As a result, our business and financial condition, results
of operations and prospects, as well as the trading price of our common shares may be materially and adversely affected. Ineffective
internal control over financial reporting could also expose us to increased risk of fraud or misuse of corporate assets, which
in turn, could subject us to potential delisting from the NASDAQ Capital Market on which our common shares are listed, regulatory
investigations or civil or criminal sanctions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our directors, officers and we may be involved in investigations
or other forms of regulatory or governmental inquiry which may cause reputational harm to the Company, incur additional expenses,
and distract our management from our day-to-day operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">From time to time, our directors, officers and we may be involved
in investigations or other forms of regulatory or governmental inquiry covering a range of possible issues including but not limited
to securities laws compliance. These inquiries or investigations could lead to administrative, civil or criminal proceedings involving
us and could result in fines, penalties, restitution, other types of sanctions, or the need for us to undertake remedial actions,
or to alter its business, financial or accounting practices. Our practice is to cooperate fully with regulatory and governmental
inquiries and investigations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> For example, on August 6, 2020, Hangzhou Lianluo and Mr.
Zhitao He received an investigation notice from China Securities Regulatory Commission, or CSRC, for alleged violation of laws
and regulations regarding information disclosures of Hangzhou Lianluo. Hangzhou Lianluo is a PRC company with shares listed on
Shenzhen Stock Exchange. Mr. He is the Chairman and Chief Executive Officer of Hangzhou Lianluo. Hangzhou Lianluo is also the
largest shareholder of the Company and Newegg, and Mr. He was the former Chairman and the former Chief Executive Officer of the
Company and will be appointed as the chairman of the board of the Company upon completion of the merger. Hangzhou Lianluo announced
this investigation on August 7, 2020 and stated that it will fully cooperate with CSRC in the investigation. As the investigation
is still at a relatively early stage, the Company is currently unable to assess the likely outcomes of such proceedings. On October
19, 2020, Hangzhou Lianluo announced that it has received a notice of administrative punishment from Zhejiang Regulatory Bureau
of CSRC, which provides, among others, that (i) Hangzhou Lianluo is receiving a warning and required to correct its unlawful acts
and pay a fine of RMB 300,000, and (ii) Mr. Zhitao He is receiving a warning and required to pay a fine of RMB 400,000. The unfavorable
ultimate outcome regarding this investigation could cause reputational harm to us. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Legal proceedings, inquiries and regulatory investigations
are often unpredictable, and it is possible that the ultimate resolution of any such matters, if unfavorable, may be material
to the our results of operations in any future period, depending, in part, upon the size of the loss or liability imposed and
the operating results for the period, and could have a material adverse effect on the our business. In addition, regardless of
the ultimate outcome of any such legal proceeding, inquiry or investigation, any such matter could cause us to incur additional
expenses, which could be significant, and possibly material, to our results of operations in any future period. Any of these factors
may result in large and sudden changes in the volume and price at which our common shares will trade.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In the past, shareholders of a public company often brought
securities class action suits against the company following periods of instability in the market price of that company&rsquo;s
securities. If we were involved in a class action suit, it could divert a significant amount of our management&rsquo;s attention
and other resources from our business and operations, which could harm our results of operations and require us to incur significant
expenses to defend the suit. Any such class action suit, whether or not successful, could harm our reputation and restrict our
ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant
damages, which could have a material adverse effect on our financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I><U>Risks Relating to Doing Business in China</U></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Adverse changes in economic and political policies of
the PRC government could have a material adverse effect on the overall economic growth of China, which could adversely affect
our business.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Substantially all of our business operations are conducted
in China. Accordingly, our results of operations, financial condition and prospects are subject to economic, political and legal
developments in China. China&rsquo;s economy differs from the economies of most developed countries in many respects, with respect
to the amount of government involvement, level of development, growth rate, control of foreign exchange, and allocation of resources.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">While the PRC economy has grown more rapidly in the past 30
years than the world economy as a whole, growth has been uneven across different regions and among various economic sectors of
China. The PRC government has implemented various measures to encourage economic development and guide the allocation of resources.
Some of these measures benefit the overall PRC economy, but may also have a negative effect on us. For example, our financial
condition and results of operations may be adversely affected by government control over capital investments or changes in tax
regulations that are applicable to us. Stimulus measures designed to boost the Chinese economy may contribute to higher inflation,
which could adversely affect our results of operations and financial condition. In addition, since 2012, growth of the Chinese
economy has slowed down. We cannot assure you that Chinese economy will continue to grow, or that if there is growth, such growth
will be steady and uniform, or that if there is a slowdown, such slowdown will not have a negative effect on our business and
results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We do not have business interruption, litigation or natural
disaster insurance.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The insurance industry in China is still at an early stage
of development. In particular, PRC insurance companies offer limited insurance products. As a result, we do not have any business
liability or disruption insurance coverage for our operations in China. Any business interruption, litigation or natural disaster
may result in our business incurring substantial costs and the diversion of resources.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Currently, there are no specific laws or regulations
applicable to wearable medical products in China, which are instead subject to general laws applicable to medical products. If
there are applicable government regulations in the future, it may create risks and challenges with respect to our compliance efforts
and our business strategies.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The health care industry is highly regulated and is subject
to changing political, legislative, regulatory, and other influences. Existing and new laws and regulations affecting the health
care industry could create unexpected liabilities for us, cause us to incur additional costs, and restrict our operations. Many
health care laws are complex, and their application to specific services and relationships may not be clear. In particular, many
existing health care laws and regulations, when enacted, did not anticipate the wearable medical products and services that we
provide, and these laws and regulations may be applied to our business in ways that we do not anticipate. Our failure to accurately
anticipate the application of these laws and regulations, or our other failure to comply, could create liability for us, result
in adverse publicity, and negatively affect our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Restrictions on currency exchange may limit our ability
to receive and use our income effectively.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Lianluo Connection, our directly wholly-owned PRC subsidiary,
is a foreign invested enterprise, or FIE, under PRC laws, and substantially all of our sales are settled in RMB. Any future restrictions
on currency exchanges may limit our ability to use revenue generated in RMB to fund any future business activities outside of
China or to make dividend or other payments in U.S. dollars. Although the conversion of RMB into foreign currency for current
account transactions, such as interest payments, profit distributions, and trade or service related transactions, can be made
without prior governmental approval, significant restrictions still remain, including primarily the restriction that FIEs may
only buy, sell, or remit foreign currencies after providing valid commercial documents to certain banks in China authorized to
conduct foreign exchange business. In addition, conversion of RMB for capital account items, including direct investment and loans,
are subject to governmental approval in China, and requires companies to open and maintain separate foreign exchange accounts
for capital account items. We cannot be certain that the Chinese regulatory authorities will not impose more stringent restrictions
on the convertibility of the RMB.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Uncertainties with respect to the PRC legal system could
limit the legal protections available to you and us.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We conduct substantially all of our business through our operating
subsidiaries in the PRC. Our operating subsidiaries are generally subject to laws and regulations applicable to foreign investments
in China and, in particular, laws applicable to FIEs. The PRC legal system is based on written statutes, and prior court decisions
may be cited for reference but have limited precedential value. Since 1979, a series of new PRC laws and regulations have significantly
enhanced the protections afforded to various forms of foreign investments in China. However, since the PRC legal system continues
to evolve rapidly, the interpretations of many laws, regulations, and rules are not always uniform, and enforcement of these laws,
regulations, and rules involve uncertainties, which may limit legal protections available to you and us. In addition, any litigation
in China may be protracted and result in substantial costs and diversion of resources and management attention. Furthermore, all
of our executive officers and most of our directors are residents of China and not of the United States, and substantially all
the assets of these persons are located outside the United States. As a result, it could be difficult for investors to effect
service of process in the United States or to enforce a judgment obtained in the United States against our Chinese operations
and subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>You may have difficulty enforcing judgments against us.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Most of our assets are located outside of the United States
and most of our current operations are conducted in the PRC. In addition, most of our directors and officers are nationals and
residents of countries other than the United States. A substantial portion of the assets of these persons is located outside the
United States. As a result, it may be difficult for you to effect service of process within the United States upon these persons.
It may also be difficult for you to enforce U.S. courts&rsquo; judgments entered pursuant to the civil liability provisions of
the U.S. federal securities laws against us, or our officers and directors most of whom are not residents of the United States
and the substantial majority of whose assets are located outside of the United States. In addition, there is uncertainty as to
whether the courts of the PRC would recognize or enforce judgments of U.S. courts. The recognition and enforcement of foreign
judgments are provided for in the PRC Civil Procedures Law. Courts in China may recognize and enforce foreign judgments in accordance
with the requirements of the PRC Civil Procedures Law based on treaties between China and the country where the judgment is made
or on reciprocity between jurisdictions. China does not have any treaties or other arrangements with the United States or the
BVI that provide for the reciprocal recognition and enforcement of judgments. In addition, according to the PRC Civil Procedures
Law, courts in the PRC will not enforce a foreign judgment, if they decide that the judgment violates basic principles of PRC
law, sovereignty, national security, or public interest. It is uncertain whether a PRC court would enforce a judgment rendered
by a court in the United States against us or our officers and directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The PRC government exerts substantial influence over
the manner in which business activities are conducted.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The PRC government has exercised and continues to exercise
substantial control over virtually every sector of the Chinese economy through regulations and state ownership. Our ability to
operate in China may be harmed by changes in Chinese laws and regulations, including those relating to taxation, product liability,
healthcare, labor, property, privacy and other matters. We believe that our operations in China comply with, in material aspects,
with all applicable legal and regulatory requirements. However, the central or local governments of China 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Fluctuations in exchange rates could adversely affect
our business and the value of our securities.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The value of our common shares will be indirectly affected
by the foreign exchange rate between the U.S. dollar and RMB. Appreciation or depreciation in the value of RMB relative to the
U.S. dollar would affect our financial results reported in U.S. dollar without giving effect to any underlying change in our business
or results of operations. Fluctuations in the exchange rate will also affect the relative value of any dividend we issue that
will be exchanged into U.S. dollars, as well as earnings from any U.S. dollar-denominated investments we make in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Since July 2005, the RMB has no longer been pegged to the U.S.
dollar. Although the People&rsquo;s Bank of China regularly intervenes in the foreign exchange market to prevent significant short-term
fluctuations in the exchange rate, RMB may appreciate or depreciate significantly in value against the U.S. dollar in the medium
to long term. Moreover, it is possible that in the future PRC authorities may lift restrictions on fluctuations in the RMB exchange
rate and lessen intervention in the foreign exchange market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Very limited hedging transactions are available in China to
reduce our exposure to the exchange rate fluctuations. To date, we have not entered into any hedging transactions. While we may
enter into hedging transactions in the future, the availability and effectiveness of these transactions may be limited. We may
not be able to successfully hedge our exposure at all. In addition, our foreign currency exchange losses may be magnified by PRC
exchange control regulations that restrict our ability to convert RMB into foreign currencies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Restrictions under PRC law on our PRC subsidiary&rsquo;s
ability to make dividends and other distributions could materially and adversely affect our ability to grow, make investments
or acquisitions that could benefit our business, pay dividends to you, and otherwise fund and conduct our business.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Substantially all of our revenues are earned by our PRC subsidiary.
However, PRC regulations restrict the ability of our PRC subsidiary to make dividends and other payments to its offshore parent
companies. PRC legal restrictions permit payments of dividends by our PRC subsidiary only out of its accumulated after-tax profits,
if any, determined in accordance with PRC accounting standards and regulations. Our PRC subsidiary is also required under PRC
laws and regulations to allocate at least 10% of its annual after-tax profits determined in accordance with PRC GAAP to a statutory
general reserve fund until the amounts in said reserve fund reach 50% of the company&rsquo;s registered capital. Allocations to
these statutory reserve funds can only be used for specific purposes and are not transferable to us in the form of loans, advances,
or cash dividends. Any limitations on the ability of our PRC subsidiary to transfer funds to us could materially and adversely
limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends and otherwise
fund and conduct our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>PRC regulations relating to investments in offshore companies
by PRC residents may subject our PRC-resident beneficial owners or our PRC subsidiary to liability or penalties, limit our ability
to inject capital into our PRC subsidiary or limit our PRC subsidiary&rsquo;s ability to increase its registered capital or distribute
profits.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The State Administration of Foreign Exchange, or SAFE, promulgated
the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents&rsquo; Offshore Investment and Financing
and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular&nbsp;37, on July&nbsp;4, 2014, which replaced the
former circular commonly known as &ldquo;SAFE Circular&nbsp;75&rdquo; promulgated by SAFE on October&nbsp;21, 2005. SAFE Circular&nbsp;37
requires PRC residents to register with local branches of the SAFE in connection with their direct establishment or indirect control
of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents&rsquo; legally owned assets
or equity interests in domestic enterprises or offshore assets or interests, referred to in SAFE Circular&nbsp;37 as a &ldquo;special
purpose vehicle.&rdquo; SAFE Circular&nbsp;37 further requires amendment to the registration in the event of any significant changes
with respect to the special purpose vehicle, such as increase or decrease of capital contributed by PRC individuals, share transfer
or exchange, merger, division or other material event. In the event that a PRC shareholder holding interests in a special purpose
vehicle fails to fulfill the required SAFE registration, the PRC subsidiaries of that special purpose vehicle may be prohibited
from making profit distributions to the offshore parent and from carrying out subsequent cross-border foreign exchange activities,
and the special purpose vehicle may be restricted in its ability to contribute additional capital into its PRC subsidiaries. Moreover,
failure to comply with the various SAFE registration requirements described above could result in liability under PRC law for
evasion of foreign exchange controls. According to the Notice on Further Simplifying and Improving Policies for the Foreign Exchange
Administration of Direct Investment released on February&nbsp;13, 2015 by SAFE, local banks will examine and handle foreign exchange
registration for overseas direct investment, including the initial foreign exchange registration and amendment registration, under
SAFE Circular&nbsp;37 from June&nbsp;1,&nbsp;2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">According to SAFE Circular 37, our shareholders or beneficial
owners, who are PRC residents, are subject to SAFE Circular 37 or other foreign exchange administrative regulations in respect
of their investment in the Company. We have notified substantial beneficial owners of our common shares who we know are PRC residents
of their filing obligations. Nevertheless, we may not be aware of the identities of all of our beneficial owners who are PRC residents.
We do not have control over our beneficial owners and there can be no assurance that all of our PRC-resident beneficial owners
will comply with SAFE Circular&nbsp;37 and&nbsp;subsequent implementation rules, and there is no assurance that the registration
under SAFE Circular&nbsp;37 and&nbsp;any amendment will be completed in a timely manner, or will be completed at all. The failure
of our beneficial owners who are PRC residents to register or amend their foreign exchange registrations in a timely manner pursuant
to SAFE Circular&nbsp;37 and&nbsp;subsequent implementation rules, or the failure of future beneficial owners of the Company who
are PRC residents to comply with the registration procedures set forth in SAFE Circular&nbsp;37 and&nbsp;subsequent implementation
rules, may subject such beneficial owners or our PRC subsidiary to fines and legal sanctions. Such failure to register or comply
with relevant requirements may also limit our ability to contribute additional capital to our PRC subsidiary and limit our PRC
subsidiary&rsquo;s ability to distribute dividends to us. These risks may have a material adverse effect on our business, financial
condition and results of&nbsp;operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Furthermore, it is uncertain how SAFE Circular 37, and any
future regulation concerning offshore or cross-border transactions, will be interpreted, amended and implemented by the relevant
PRC government authorities, and we cannot predict how these regulations will affect our business operations or future strategy.
Failure to register or comply with relevant requirements may also limit our ability to contribute additional capital to our PRC
subsidiary and limit our PRC subsidiary&rsquo;s ability to distribute dividends to us. These risks could in the future have a
material adverse effect on our business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We may be unable to complete a business combination transaction
efficiently or on favorable terms due to complicated merger and acquisition regulations which first became effective on September
8, 2006.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On August 9, 2006, six PRC regulatory agencies, including the
China Securities Regulatory Commission, promulgated the Regulation on mergers and Acquisitions of Domestic Companies by Foreign
Investors, which became effective on September 8, 2006, and was subsequently amended in 2009. This regulation, among other regulations
and rules, governs the approval process of a PRC company&rsquo;s participation in an acquisition of assets or equity interests.
Depending on the structure of the transaction, the regulation requires the PRC parties to make a series of applications and supplemental
applications to the government agencies for approval of acquisition of assets or equity interests of another entity. In some instances,
the application process may require a presentation of economic data concerning the transaction, including appraisals of the target
business and evaluations of the acquirer, which are designed to allow the government to assess viability of the transaction. Government
approvals will have expiration dates, by which a transaction must be completed and reported to the government agencies. Compliance
with the regulation is likely to be more time consuming and expensive than it was in the past, and provides the government more
controls over business combination of two enterprises.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The regulation also prohibits a transaction with an acquisition
price obviously lower than the appraised value of the PRC business or assets and in certain transaction structures, and requires
consideration be paid within a defined period, generally not in excess of a year. The regulation also limits our ability to negotiate
various terms of the acquisition, including the initial consideration, contingent consideration, holdback provisions, indemnification
provisions, and provisions related to the assumption and allocation of assets and liabilities. Transaction structures involving
trusts, nominees and similar entities are prohibited. Therefore, such regulation may impede our ability to negotiate and complete
a business combination transaction on financial terms that satisfy our investors and protect our shareholders&rsquo; economic
interests.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>PRC regulation of loans to, and direct investment in,
PRC entities by offshore holding companies and governmental control of currency conversion may restrict or prevent us from using
the proceeds of our future financings to make loans to our PRC subsidiary, or to make additional capital contributions to our
PRC subsidiary.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We, as an offshore holding company, are permitted under PRC
laws and regulations to provide funding to our PRC subsidiary, which is treated as foreign-invested enterprises under PRC laws,
through loans or capital contributions. However, loans by us to our PRC subsidiary to finance its activities cannot exceed statutory
limits and must be registered with the local counterpart of SAFE 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&nbsp;China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">SAFE promulgated the Notice of the State Administration of
Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested Enterprise, or
Circular&nbsp;19, effective on June&nbsp;1, 2015, in replacement of the Circular on the Relevant Operating Issues Concerning the
Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, the
Notice from the State Administration of Foreign Exchange on Relevant Issues Concerning Strengthening the Administration of Foreign
Exchange Businesses, and the Circular on Further Clarification and Regulation of the Issues Concerning the Administration of Certain
Capital Account Foreign Exchange Businesses. According to Circular&nbsp;19, the flow and use of the RMB capital converted from
foreign currency-denominated registered capital of a foreign-invested company is regulated such that RMB capital may not be used
for the issuance of RMB entrusted loans, the repayment of inter-enterprise loans or the repayment of bank loans that have been
transferred to a third party. Although Circular&nbsp;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 SAFE will permit such capital to be used for equity investments
in the PRC in actual practice. 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 Circular&nbsp;16, effective on June&nbsp;9, 2016, which
reiterates some of the rules set forth in Circular&nbsp;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&nbsp;19 and Circular&nbsp;16 could
result in administrative penalties. Circular&nbsp;19 and Circular&nbsp;16 may significantly limit our ability to transfer any
foreign currency we hold, including the net proceeds from our future financings, to our PRC subsidiary, which may adversely affect
our liquidity and our ability to fund and expand our business in the&nbsp;PRC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">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 obtain the necessary government approvals on a timely basis, if at all, with
respect to future loans or future capital contributions to our PRC subsidiary. As a result, uncertainties exist as to our ability
to provide prompt financial support to our PRC subsidiary when needed. If we fail to complete such registrations or obtain such
approvals, our ability to use foreign currency, including the proceeds we received from our future financings, 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&nbsp;business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Any failure to comply with PRC regulations regarding
employee share incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have established a series of share incentive programs under
which we issued share options to our PRC employees. In 2014, we created the 2014 Share Incentive Plan, which provides that the
maximum number of shares authorized for issuance under this plan shall not exceed ten percent of the number of issued and outstanding
shares of company stock as of December 31 of the immediately preceding fiscal year, and an additional number of shares may be
added automatically annually to the shares issuable under the Plan on and after January 1 of each year, from January 1, 2015 through
January 1, 2024. The 2014 Share Incentive Plan shall terminate on the tenth anniversary of its effective date on July 28, 2014
when the plan was approved by the shareholders of the Company. Pursuant to SAFE Circular 37, PRC residents who participate in
share incentive plans in overseas non-publicly-listed companies may submit applications to SAFE or its local branches for the
foreign exchange registration with respect to offshore special purpose companies. In the meantime, directors, executive officers
and other employees who are PRC citizens or who are non-PRC residents residing in the PRC for a continuous period of not less
than one year, subject to limited exceptions, and who have been granted restricted shares, options or restricted share units,
may follow the Notice on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock
Incentive Plan of Overseas Publicly Listed Company, issued by SAFE in February 2012, to apply for the foreign exchange registration.
According to those regulations, employees, directors and other management members participating in any stock incentive plan of
an overseas publicly listed company who are PRC citizens or who are non-PRC citizens residing in China for a continuous period
of not less than one year, subject to limited exceptions, are required to register with SAFE through a domestic qualified agent,
which may be a PRC subsidiary of the overseas listed company, and complete certain other procedures. Failure to complete the SAFE
registrations may subject them to fines and legal sanctions and may also limit their ability to make payment under the relevant
equity incentive plans or receive dividends or sales proceeds related thereto in foreign currencies, or our ability to contribute
additional capital into our subsidiaries in China and limit our PRC subsidiary&rsquo;s ability to distribute dividends to us.
We also face regulatory uncertainties under PRC law that could restrict our ability to adopt additional equity incentive plans
for our directors, officers and employees who are PRC citizens or who are non-PRC residents residing in the PRC for a continuous
period of not less than one year, subject to limited exceptions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, the State Administration of Taxation has issued
circulars concerning employee share options, restricted shares restricted share units. Under these circulars, employees working
in the PRC who exercise share options, or whose restricted shares or restricted share units vest, will be subject to PRC individual
income tax. The PRC subsidiaries of an overseas listed company have obligations to file documents related to employee share options
or restricted shares with relevant tax authorities and to withhold individual income taxes of those employees related to their
share options, restricted shares or restricted share units. Although we currently withhold income tax from our PRC employees in
connection with their exercise of options and the vesting of their restricted shares and restricted share units, if the employees
fail to pay, or the PRC subsidiary fails to withhold, their income taxes according to relevant laws, rules and regulations, the
PRC subsidiary may face sanctions imposed by the tax authorities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The Security Review Rules may make it more difficult
for us to make future acquisitions or dispositions of our business operations or assets in China.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Security Review Rules, effective as of September 1, 2011,
provides that when deciding whether a specific merger or acquisition of a domestic enterprise by foreign investors is subject
to the national security review by Ministry of Commerce, the principle of substance-over-form should be applied and foreign investors
are prohibited from circumventing the national security review requirement by structuring transactions through proxies, trusts,
indirect investments, leases, loans, control through contractual arrangements or offshore transactions. If the business of any
target company that we plan to acquire falls within the scope subject to national security review, we may not be able to successfully
acquire such company by equity or asset acquisition, capital increase or even through any contractual arrangement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Under the Enterprise Income Tax Law, we may be classified
as a &ldquo;resident enterprise&rdquo; of China. Such classification will likely result in unfavorable tax consequences to us
and our non-PRC shareholders.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On March 16, 2007, the National People&rsquo;s Congress of
China passed a new Enterprise Income Tax Law, or the EIT Law. On November 28, 2007, the State Council of China passed its implementing
rules, which took effect on January 1, 2008. Under the EIT Law, an enterprise established outside of China with &ldquo;de facto
management bodies&rdquo; within China is considered a &ldquo;resident enterprise,&rdquo; meaning that it can be treated in a manner
similar to a Chinese enterprise for enterprise income tax purposes. The implementing rules of the EIT Law define de facto management
as &ldquo;substantial and overall management and control over the production and operations, personnel, accounting, and properties&rdquo;
of the enterprise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On April 22, 2009, the State Administration of Taxation issued
the Notice Concerning Relevant Issues Regarding Cognizance of Chinese Investment Controlled Enterprises Incorporated Offshore
as Resident Enterprises, also referred to as SAT Circular 82 (which has been revised by the Decision of the State Administration
of Taxation on Issuing the Lists of Invalid and Abolished Tax Departmental Rules and Taxation Normative Documents on December
29, 2017 and by the Decision of the State Council on Cancellation and Delegation of a Batch of Administrative Examination and
Approval Items on November 8, 2013). The notice further interprets the application of the EIT Law and its implementation rules
to Chinese enterprise or group controlled offshore entities. Pursuant to the notice, an enterprise incorporated in an offshore
jurisdiction and controlled by a Chinese enterprise or group will be classified as a &ldquo;non-domestically incorporated resident
enterprise&rdquo; if (i) its senior management in charge of daily operations reside or perform their duties mainly in China; (ii)
its financial or personnel decisions are made or approved by bodies or persons in China; (iii) its substantial assets and properties,
accounting books, corporate chops, board and shareholder minutes are kept in China; and (iv) at least half of its directors with
voting rights or senior management habitually reside in China. In addition, the State Administration of Taxation issued the Announcement
of the State Administration of Taxation on Issues concerning the Determination of Resident Enterprises Based on the Standards
of De Facto Management Bodies in January 2014 to provide more guidance on the implementation of Circular 82. This bulletin further
provides that, among other things, an entity that is classified as a &ldquo;resident enterprise&rdquo; in accordance with the
circular shall file the application for classifying its status of residential enterprise with the local tax authorities where
its main domestic investors are registered. From the year in which the entity is determined to be a &ldquo;resident enterprise,&rdquo;
any dividend, profit and other equity investment gain shall be taxed in accordance with the enterprise income tax law and its
implementing rules. A resident enterprise would be subject to an enterprise income tax rate of 25% on its worldwide income and
must pay a withholding tax at a rate of 10%, when paying dividends to its non-PRC shareholders. However, it remains unclear as
to whether the Notice is applicable to an offshore enterprise controlled by Chinese natural persons. It is unclear how tax authorities
will determine tax residency based on the facts of each case.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may be deemed to be a resident enterprise by Chinese tax
authorities. If the PRC tax authorities determine that we are a &ldquo;resident enterprise&rdquo; for the PRC enterprise income
tax purposes, a number of unfavorable PRC tax consequences could follow. First, we may be subject to the enterprise income tax
at a rate of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting obligations, which would materially
reduce our net income. Second, a 10% withholding tax may be imposed on dividends we pay to our shareholders that are non-resident
enterprises and with respect to gains derived by said shareholders from transferring our shares. Finally, if we are deemed a PRC
resident enterprise, dividends paid to our non-PRC individual shareholders and any gain realized on the transfer of our shares
by such shareholders may be subject to PRC tax at a rate of 20%, if such income is deemed to be from PRC sources.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If we were treated as a &ldquo;resident enterprise&rdquo; by
the PRC tax authorities, we would be subject to taxation in both the U.S. and China, and we may not be able to claim our PRC tax
as a credit to reduce our U.S. tax.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We and our shareholders face uncertainties with respect
to indirect transfers of equity interests in PRC resident enterprises or other assets attributed to a Chinese establishment of
a non-Chinese company, or immovable properties located in China owned by non-Chinese companies.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In October&nbsp;2017, the State Administration of Taxation
issued the Bulletin on Issues Concerning the Withholding of Non-PRC Resident Enterprise Income Tax at Source, or Bulletin 37,
which replaced the Notice on Strengthening Administration of Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprises
issued by the State Administration of Taxation on December&nbsp;10, 2009, and partially replaced and supplemented rules under
the Bulletin on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC Resident Enterprises, or Bulletin 7,
issued by the State Administration of Taxation on February&nbsp;3, 2015. Pursuant to Bulletin 7, an &ldquo;indirect transfer&rdquo;
of PRC assets, including a transfer of equity interests in an unlisted non-PRC holding company of a PRC resident enterprise, by
non-PRC resident enterprises may be re-characterized and treated as a direct transfer of the underlying PRC assets, if such arrangement
does not have a reasonable commercial purpose and was established for the purpose of avoiding payment of PRC enterprise income
tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax. According to Bulletin
7, &ldquo;PRC taxable assets&rdquo; include assets attributed to an establishment in China, immoveable properties located in China,
and equity investments in PRC resident enterprises and any gains from the transfer of such asset by a direct holder, who is a
non-PRC resident enterprise, would be subject to PRC enterprise income taxes. When determining whether there is a &ldquo;reasonable
commercial purpose&rdquo; of the transaction arrangement, factors to be taken into consideration include: whether the main value
of the equity interest of the relevant offshore enterprise derives from PRC taxable assets; whether the assets of the relevant
offshore enterprise mainly consists of direct or indirect investment in China or if its income mainly derives from China; whether
the offshore enterprise and its subsidiaries directly or indirectly holding PRC taxable assets have real commercial nature which
is evidenced by their actual function and risk exposure; the duration of existence of the business model and organizational structure;
the replicability of the transaction by direct transfer of PRC taxable assets; and the tax situation of such indirect transfer
and applicable tax treaties or similar arrangements. In the case of an indirect offshore transfer of assets of a PRC establishment,
the resulting gain is to be included with the enterprise income tax filing of the PRC establishment or place of business being
transferred, and may consequently be subject to PRC enterprise income tax at a rate of 25%. Where the underlying transfer relates
to immoveable properties located in China or to equity investments in a PRC resident enterprise, which is not related to a PRC
establishment or place of business of a non-resident enterprise, a PRC enterprise income tax of 10% would apply, subject to available
preferential tax treatment under applicable tax treaties or similar arrangements, and the party who is obligated to make the transfer
payments has the withholding obligation. Pursuant to Bulletin 37, the withholding agent shall declare and pay the withheld tax
to the competent tax authority in the place where such withholding agent is located within 7&nbsp;days from the date of occurrence
of the withholding obligation, while the transferor is required to declare and pay such tax to the competent tax authority within
the statutory time limit according to Bulletin 7. Late payment of applicable tax will subject the transferor to default interest
charges. Both Bulletin 37 and Bulletin&nbsp;7&nbsp;do not apply to transactions of sale of shares by investors through a public
stock exchange where such shares were acquired from a transaction through a public stock&nbsp;exchange.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">There is uncertainty as to the application of Bulletin 37 or
previous rules under Bulletin 7. We face uncertainties as to the reporting and other implications of certain past and future transactions
where PRC taxable assets are involved, such as offshore restructuring, sale of the shares in our offshore subsidiaries or investments.
We may be subject to filing obligations or taxes if the Company is transferor in such transactions, and may be subject to withholding
obligations if the Company is transferee in such transactions, under Bulletin 37 and Bulletin 7. For transfer of shares in the
Company by investors that are non-PRC resident enterprises, our PRC subsidiary may be requested to assist in the filing under
Bulletin 37 and Bulletin 7. As a result, we may be required to expend valuable resources to comply with Bulletin 37 and Bulletin
7 or to request the relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish
that the Company should not be taxed under these circulars, which may have a material adverse effect on our financial condition
and results of&nbsp;operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We may be exposed to liabilities under the Foreign Corrupt
Practices Act and Chinese anti-corruption laws, and any determination that we violated these laws could have a material adverse
effect on our business.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We are subject to the Foreign Corrupt Practice Act, or the
FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political
parties by U.S. persons and issuers as defined by the statute, for the purpose of obtaining or retaining business. We have operations,
agreements with third parties such as distributors, and make almost all of our sales in China. The PRC also strictly prohibits
bribery of government officials. Our activities in China create the risk of unauthorized payments or offers of payments by our
employees, consultants, sales agents, or distributors to government officials or political parties, even though they may not always
be subject to our control. It is our policy to implement safeguards to discourage these practices by our employees. However, our
existing safeguards and any future improvements may prove to be less than effective, and our employees, consultants, sales agents,
or distributors may engage in conduct for which we might be held responsible. Violations of the FCPA or Chinese anti-corruption
laws may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect
our business, operating results and financial condition. In addition, the U.S. government may seek to hold the Company liable
for FCPA violations committed by companies in which we invest or that we acquire.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Since substantially all of our operations are located
in China, information about our operations is not readily available from independent third-party sources.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Since Lianluo Connection is based in China, our shareholders
outside China may have greater difficulty in obtaining information about them on a timely basis than local shareholders of a U.S.-based
company. Lianluo Connection&rsquo;s operations will continue to be conducted in China and shareholders may have difficulty in
obtaining information about them from sources other than Lianluo Connection itself. Information available from newspapers, trade
journals, or local, regional or national regulatory agencies may not be readily available to shareholders and, where available,
will likely be available only in Chinese. Shareholders may have to be dependent upon management for reports of our PRC subsidiary&rsquo;s
progress, development, activities and expenditure of proceeds.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our auditors, like other independent registered public
accounting firms operating in China and to the extent their audit clients have operations in China, are not permitted to be inspected
by the U.S. Public Company Accounting Oversight Board and, as such, you may be deprived of the benefits of such inspection.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our independent registered public accounting firms issue the
audit reports included in this proxy statement/prospectus filed with the SEC. As auditors of companies that are traded publicly
in the U.S., our public accounting firms are registered with the U.S. Public Company Accounting Oversight Board (United States),
or the PCAOB. They are required by U.S. laws to be regularly inspected by the PCAOB to assess their compliance with the U.S. laws
and professional standards.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our operations, however, are mainly located in the PRC, a jurisdiction
where PCAOB is currently not able to conduct inspections without the approval of PRC authorities. Our auditors, like other independent
registered public accounting firms operating in China, are currently not subject to inspection by the PCAOB. In May 2013, PCAOB
announced that it had entered into a Memorandum of Understanding on Enforcement Cooperation with the CSRC, and the PRC Ministry
of Finance, which establishes a cooperative framework between the parties for the production and exchange of audit documents relevant
to investigations undertaken by PCAOB, the CSRC or the PRC Ministry of Finance in the United States and the PRC, respectively.
PCAOB continues to be in discussions with the CSRC and the PRC Ministry of Finance to permit joint inspections in the PRC of audit
firms that are registered with the PCAOB and audit Chinese companies that trade on U.S. exchanges.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Inspections of some other firms that the PCAOB has conducted
outside China have identified deficiencies in those firms&rsquo; audit procedures and quality control procedures. Certain deficiencies
revealed in the inspection process can be addressed to improve future audit quality. The inability of the PCAOB to conduct inspections
of auditors operating in China makes it difficult to evaluate our auditor&rsquo;s audit procedures and quality control procedures.
As a result, our investors may not receive the benefits of the PCAOB inspections.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On November 18, 2016, the PCAOB issued its 2016 to 2020 Strategic
Plan on improving the quality of the audit for the protection and benefits of investors, which revised the plan to update initiatives
relating to the PCAOB&rsquo;s new standard-setting process, planning for and adopting a permanent broker-dealer inspection program,
inspecting firms located in China, audit quality indicators, monitoring and developing reports related to independence and the
business model of the firms, and business continuity. This may eventually improve PCAOB&rsquo;s ability to conduct inspections
of independent registered public accounting firms operating in China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If we become directly subject to the scrutiny, criticism,
and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and
resolve the matter, which could harm our business operations, stock price, and reputation. It could result in a loss of your investment
in our stock, especially if such matter cannot be addressed and resolved favorably.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In the past few years, U.S. publicly traded companies that
have substantially all of their operations in China, particularly companies like us have been the subject of intense scrutiny,
criticism, and negative publicity by investors, financial commentators, and regulatory agencies, such as the SEC. Much of the
scrutiny, criticism, and negative publicity has centered around financial and accounting irregularities and mistakes, lack of
effective internal controls over financial accounting, inadequate corporate governance policies or lack of adherence thereto and,
in many cases, allegations of fraud. As a result of the scrutiny, criticism, and negative publicity, the publicly traded stocks
of many U.S. listed Chinese companies have sharply decreased in value and, in some cases, have become virtually worthless. Many
of these companies are now subject to shareholder lawsuits and SEC enforcement actions, and are conducting internal and external
investigations into the allegations. It is not clear the effect of this sector-wide scrutiny, criticism, and negative publicity
will have on the Company, our business, and our stock price. If we become the subject of any unfavorable allegations, whether
such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations
defending the Company. This situation will be costly, time consuming, and distract our management from growing the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>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. Accordingly,
our public disclosure should be reviewed in light of the fact that no governmental agency that is located in China where substantially
all of our operations and business are located has conducted any due diligence on our operations, or reviewed or passed upon the
accuracy and completeness of any of our disclosures.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Since we are regulated by the SEC, our reports and other filings
with the SEC are subject to SEC&rsquo;s review in accordance with the rules and regulations promulgated by the SEC under the Securities
Act and the Exchange Act. Unlike publicly traded companies whose operations are located primarily in the United States, substantially
all of our operations are located in China. Since substantially all of our operations and business take place in China, it may
be more difficult for the SEC staff to overcome the geographic and cultural obstacles, when they review our disclosures. Such
obstacles are not present for similar companies whose operations and business take place entirely or primarily in the United States.
Furthermore, our SEC reports and other disclosures and public announcements are not subject to the review or scrutiny of any PRC
regulatory authority. For example, the disclosures in our SEC reports and other filings are not subject to the review of the CSRC,
a PRC regulator that is tasked with oversight of the capital markets in China. Accordingly, you should review our SEC reports,
filings, and other public announcements with the understanding that no local regulator has done any due diligence on the Company
and that none of our SEC reports, other filings, or any of our other public announcements has been reviewed or otherwise been
scrutinized by any local regulator.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_036"></A>Risks Related to the Business of
Newegg</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The impact of COVID-19 may adversely affect Newegg&rsquo;s
business and financial results.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The spread of COVID-19, which was declared a pandemic by the
World Health Organization in March 2020, has caused different countries and cities to mandate curfews, including &ldquo;shelter-in-place&rdquo;
and closures of most non-essential businesses as well as other measures to mitigate the spread of the virus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s online business and warehouse operations have
remained active to serve its customers during the COVID-19 outbreak, and to-date Newegg has seen increased demand for its products
and services during the outbreak. By contrast, some of Newegg&rsquo;s brick-and-mortar competitors have been forced to close down
at least some of their retail locations temporarily, while some competitors have de-emphasized certain lines of business, such
as computers and electronics, which represent Newegg&rsquo;s core business. Both of these industry trends have contributed to
increased sales and market share for Newegg. However, the course of the outbreak remains uncertain, and a prolonged global economic
slowdown and increased unemployment could have a material adverse impact on economic conditions, which in turn could lead to a
reduced demand for Newegg&rsquo;s products and services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As a consequence of the COVID-19 outbreak, Newegg has experienced
occasional supply constraints, primarily in the form of delays in shipment of inventory. Newegg has also experienced some increases
in the cost of certain products, as well as a drop in promotions by some manufacturers. While Newegg considers such events to
be relatively minor and temporary, continued supply chain disruptions could lead to delayed receipt of, or shortages in, inventory
and higher costs, and negatively impact sales in fiscal year 2020 and beyond.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">COVID-19 impacted the supply chain of Newegg&rsquo;s brand
partners and Marketplace sellers, and its ability to timely fulfill orders and deliver such orders to its customers, particularly
as a result of mandatory shutdowns in different countries and cities to mitigate the spread of the virus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Although Newegg cannot estimate the length or gravity of the
impact of the COVID-19 outbreak at this time, if the pandemic continues, it may have an adverse effect on Newegg&rsquo;s results
of future operations. The potential negative impact of COVID-19 on its operations remains uncertain and potentially wide-spread,
including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Newegg&rsquo;s
                                         ability to successfully forecast sales and execute its long-term growth strategy during
                                         these uncertain times;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                         build-up of excess inventory as a result of lower consumer demand;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">supply
                                         chain disruptions experienced by brand partners and Marketplace sellers, resulting from
                                         closed factories, reduced workforces, scarcity of raw materials, and scrutiny or embargoing
                                         of goods produced in infected areas, along with increased freight costs for Newegg;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Newegg&rsquo;s
                                         ability to access capital sources and maintain compliance with its credit facilities,
                                         as well as the ability of its key customers, suppliers, and vendors to do the same in
                                         regard to their own obligations;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Newegg&rsquo;s
                                         ability to collect outstanding receivables from its customers;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Newegg&rsquo;s
                                         ability to attend and participate in industry and trade shows; and</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">diversion
                                         of management and employee attention and resources from key business activities and risk
                                         management outside of COVID-19 response efforts, including cybersecurity and maintenance
                                         of internal controls, with resulting potential loss of employee productivity.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The COVID-19 pandemic remains highly volatile and continues
to evolve on a daily basis and therefore, there can be no assurance that these potential negative impacts will not materialize,
and these and other impacts of COVID-19 may adversely affect Newegg&rsquo;s future business, financial condition, cash flow, liquidity
and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Newegg faces risks related to system interruption, including
failures caused or experienced by third-party service providers, and lack of redundancy and timely upgrades.</I></B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s success depends on its ability to successfully
receive and fulfill orders and to promptly deliver such orders to its customers. It could lose existing customers or fail to attract
new customers, potentially resulting in a decline in net sales, if its online platforms are inaccessible or if its transaction
processing systems, order fulfillment processes or network infrastructure are not operational or performing to its customers&rsquo;
satisfaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Any internet network interruptions, latency or problems with
its online platforms&rsquo; availability could prevent customers from accessing, browsing and placing orders on its online platforms,
and impact its ability to fulfill orders or bill customers, which may cause customer dissatisfaction and damage its reputation
and brand. Newegg has experienced brief computer system interruptions in the past, and it believes that others will occur from
time to time in the future. Its systems and operations potentially are vulnerable to damage or interruption from a number of sources,
including the following:</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>natural disaster or other catastrophic event such as
                                         earthquake, fire, power loss or interruption, telecommunications failure, hurricane,
                                         volcanic eruption, flood or terrorist attack. For example, its headquarters and the majority
                                         of its infrastructure, including some of its servers, are located in Southern California,
                                         a seismically active region. In addition, California has in the past experienced power
                                         outages as a result of limited electric power supply;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>diseases or pandemics (including COVID-19) that have
                                         affected and may continue to affect supply chain of its brand partners and Marketplace
                                         sellers, and its logistics in the future due to inconsistent and unanticipated order
                                         patterns, other diseases or pandemics or unforeseen natural disasters;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>computer malware, physical or electronic break-ins and
                                         similar disruptions;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>security breaches and hacking attacks;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>failure by
                                         third-party vendors, including data center and bandwidth providers, to provide steady
                                         and high-speed access to its online platforms and systems, any disruption in its network
                                         access or co-location services, which are the services that house some of its servers
                                         and provide internet access to them, provided by these third-party providers or any failure
                                         of these third-party vendors to handle existing or higher volumes of use could significantly
                                         harm its business, or any financial or other difficulties these vendors face could also
                                         adversely affect its business; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>incidents of fraud.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg has not yet created sufficient redundancy for its information
technology systems and data, and it does not presently maintain backup copies of all of its data. Newegg has a limited disaster
recovery plan in effect and may not have sufficient insurance for losses that may occur from natural disasters, catastrophic events
or the resulting business interruption. Newegg is generally self-insured outside the United States. Any substantial damage to,
or disruption of, its technology infrastructure could cause interruptions or delays, loss of data, or reduced system availability,
which could have a material adverse effect on its business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg may be unable to accurately project the rate or timing
of traffic flow, including any traffic increases, or successfully and cost-effectively upgrade its systems and infrastructure
in a timely manner to accommodate higher traffic levels on its online platforms. If the volume of traffic on its online platforms
or the number of purchases made by its customers increases substantially, it may experience unanticipated system disruptions,
slower response times, reduced levels of customer service and impaired quality and delays in reporting accurate financial information.
For example, it experiences surges in online traffic and orders associated with promotional activities and holiday seasons, especially
during the Christmas season, which can put additional demands on its technology platform at specific times.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Additionally, Newegg must continue to upgrade and improve its
technology and infrastructure to support its business growth, and failure to do so could impede its growth. However, Newegg cannot
assure you that it will be successful in executing these system upgrades and improvement strategies. Any such upgrades to its
systems and infrastructure could require substantial investments. In particular, its systems may experience interruptions during
upgrades, and the new technologies or infrastructures may not be fully integrated with the existing systems on a timely basis,
or at all. If its existing or future technology and infrastructure do not function properly, it could cause system disruptions
and slow response times, affecting data transmission, which in turn could materially and adversely affect its business, financial
condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Newegg&rsquo;s business faces intense domestic and international
competition.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The e-commerce market is intensely competitive with limited
barriers to entry. Newegg&rsquo;s current and potential competitors include retailers, manufacturers and distributors that offer
a wide range of similar product categories and companies that provide D2C platform services, fulfillment and logistics services
and other e-commerce related services. It is expected that the competition in this market will intensify in the future as companies
develop new business models and enhanced technologies, new competitors enter the market, competitors forge new business combinations
or alliances, and established companies in other market segments expand to become competitive with the business of Newegg.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Many of Newegg&rsquo;s current and potential online and brick-and-mortar
competitors have larger bases of customers and Marketplace sellers, better brand recognition and greater financial, marketing,
technical, management and other resources than it does. In addition, some of its competitors have used and may continue to use
aggressive pricing or promotional strategies, may have stronger supplier relationships with more favorable terms and inventory
allocation and may devote substantially greater resources to their online platforms and system development than it does. Increased
competition may result in reduced operating margins, reduced profitability, loss of market share and diminished brand recognition
for Newegg.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg competes with online retailers such as Amazon and traditional retailers like Best Buy and Walmart, who sell through brick-and mortar stores and their
online websites. In addition, Newegg also faces competition in the international markets it participates in or may enter in the
future. Certain other competitors in countries where it operates are subsidiaries of e-commerce competitors in the United States
with established local operations and brands and with greater experience and resources than Newegg has. In other countries that
Newegg may enter, there may be incumbent online and multi-channel online or brick-and-mortar competitors presently selling IT
and  CE products. These incumbents may have advantages that could impede Newegg&rsquo;s expansion and
growth in these markets.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg could also experience significant competitive pressure
if any of its manufacturers or distributors were to initiate or expand their own online retail operations. Because Newegg&rsquo;s
manufacturers and distributors have access to merchandise at a lower cost than it, they could sell products at lower prices and
maintain a higher gross margin on their product sales than Newegg can, and they may have the ability to directly connect with
buyers at relatively low cost. This could result in Newegg&rsquo;s current and potential buyers deciding to purchase directly
from these manufacturers and distributors instead of from Newegg. Increased competition from any manufacturer or distributor capable
of maintaining high sales volumes and acquiring products at lower prices than Newegg could significantly reduce Newegg&rsquo;s
market share and adversely impact Newegg&rsquo;s operating results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">There is no assurance that Newegg will be able to compete successfully
against current and future competitors. Competitive pressures may materially and adversely affect Newegg&rsquo;s business, financial
condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>A decline in demand for IT and CE products could adversely
affect Newegg&rsquo;s operating results.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg and its Marketplace sellers primarily sell IT and CE
products that are often discretionary purchases rather than necessities for consumers. Consequently, Newegg&rsquo;s results of
operations tend to be sensitive to changes in macroeconomic conditions and their impact on consumer spending. Factors including
customer confidence, employment levels, conditions in the residential real estate and mortgage markets, access to credit, interest
rates, tax rates, customer debt levels and fuel and energy costs could reduce customer spending or change customer purchasing
habits in ways that materially and adversely affect demand for the products that Newegg and its Marketplace sellers offer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">There could be declines in the sales of the products offered
by Newegg and its Marketplace sellers due to several factors, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>decreased demand for IT or CE products, particularly
                                         computer components and parts that have historically generated a significant portion
                                         of Newegg&rsquo;s net sales;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>poor economic conditions and any related decline in customers&rsquo;
                                         demand for the products Newegg and its Marketplace sellers offer;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>increased price competition from Newegg&rsquo;s competitors;
                                         or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>technological obsolescence of the products that Newegg
                                         and its Marketplace sellers offer.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Additionally, it is expected that some of Newegg&rsquo;s future
growth should be driven by product releases or upgrades that may occur in the near future. If such product releases do not occur
or do not drive sales of IT products to the extent expected, Newegg&rsquo;s future sales may be less than predicted, negatively
impacting Newegg&rsquo;s net sales and net income.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The loss of key employees or the failure to attract qualified
personnel could have a material adverse effect on Newegg&rsquo;s ability to run its business.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The loss of any of Newegg&rsquo;s current executives, key
employees or key advisors, or the failure to attract, integrate, motivate and retain additional key employees, could have a
material adverse effect on Newegg&rsquo;s business. Although Newegg has employment agreements with its executive officers,
all of its executive officers are employed &ldquo;at-will&rdquo; and could terminate their employment at any time. If Newegg
loses one or more of its executive officers or other key employees, its ability to implement its business strategy
successfully could be seriously harmed. Furthermore, replacing executive officers or other key employees with other highly
skilled and qualified candidates may be difficult and may take an extended period of time. Recruiting skilled personnel is
highly competitive. Although to date Newegg has been successful in recruiting and retaining qualified personnel, there can be
no assurance that it will continue to attract and retain the personnel needed for its business. The failure to attract or
retain qualified personnel could have a material adverse effect on Newegg&rsquo;s business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If Newegg is unable to provide a satisfactory customer
experience, its reputation would be harmed and it could lose customers.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The success of Newegg&rsquo;s business depends largely on its
ability to provide a superior customer experience to maintain and grow its customer base and keep its customers highly engaged
on its online platforms, which in turn depends on a variety of factors. These include Newegg&rsquo;s ability to continue to maintain
a wide range of product offerings with attractive pricing, provide timely and reliable order fulfillment and provide high-quality
customer support and service. If Newegg&rsquo;s customers are not satisfied with its platforms, products or services, or its online
platforms are severely interrupted or otherwise fail to meet its customers&rsquo; requests, Newegg&rsquo;s reputation could be
adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As an e-commerce company, Newegg has limited ability to allow
buyers to touch, test and feel products, personally interact with sales and customer service representatives, and receive or return
products without waiting or paying for the products to be shipped, like brick-and-mortar retailers or online retailers that have
brick-and-mortar operations do. Therefore, it is important that Newegg continues to improve its online platforms, including efforts
to encourage the creation of more high-quality and useful user-generated content, such as reviews and commentary, on the products
Newegg and its Marketplace sellers offer. If Newegg does not continue to make investments in the development of its online platforms
and customer service operations and, as a result, or due to other reasons, fails to provide a high-quality customer experience,
Newegg may lose customers, which could adversely impact its operating results.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg currently operates customer service centers in
California and Texas and has customer service representatives working remotely in Indiana, Nevada and New Jersey, focusing on serving North
American buyers. To enhance its service capabilities and maintain increased access, Newegg operates an Asia-based
multilingual customer service center that is available 24 hours a day, seven days a week via e-mail and instant messaging.
Any material disruption or slowdown in its customer support services resulting from telephone or internet failures, power or
service outages, natural disasters, labor disputes or other events could make it difficult or impossible for Newegg to
provide adequate customer support. In addition, the future volume of customer complaints and inquiries may exceed
Newegg&rsquo;s present system capacities. If this occurs, Newegg could experience delays in responding to customer inquiries
and addressing customer complaints and concerns. Newegg&rsquo;s current level of customer support may also fail to meet the
expectations of customers. Failure to provide satisfactory levels of customer service may harm Newegg&rsquo;s reputation,
causing potential loss of existing customers and difficulty in acquiring new customers.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Newegg may not succeed in promoting and strengthening
its Newegg brand, which may materially and adversely affect its business and results of operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Brand recognition is a primary competitive factor in the e-commerce
market and will be a key factor in maintaining and expanding Newegg&rsquo;s customer base, market position and bargaining power
with vendors. Any loss of trust in Newegg&rsquo;s brand could harm its reputation and result in consumers, sellers, brands, vendors
and other participants reducing their activity level in Newegg&rsquo;s business, which could materially reduce its profitability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If Newegg does not, or is unable to continue to, promote and
strengthen the Newegg brand, or if the brand fails to continue to be viewed favorably, Newegg may not be successful in attracting
new customers and Marketplace sellers, which could have a material adverse effect on its financial condition and results of operations.
Additionally, Newegg competes not only for customers and Marketplace sellers, but also for favorable product allocations and cooperative
advertising support from its vendors. If Newegg fails to maintain favorable recognition of its brand, it may not be successful
in maintaining and strengthening its relationships with vendors in existing and new product categories or in maintaining existing
offerings and sourcing new products at competitive prices and with adequate levels of inventory.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Adverse publicity about Newegg may arise from time to time.
Negative comments about its online platforms, the products and services offered by it and its Marketplace sellers or its management
may appear in internet postings and other media sources from time to time, and there is no assurance that other types of negative
publicity of a more serious nature will not arise in the future. For example, if Newegg&rsquo;s customer service representatives
fail to satisfy the individual needs of the customers, the customers may become disgruntled and disseminate negative comments
about Newegg&rsquo;s customer service. In addition, Newegg&rsquo;s Marketplace sellers and brand partners may also be subject
to negative publicity for various reasons, such as customers&rsquo; complaints about the quality of their products and related
services or other public relations incidents, which may adversely affect the sales of their products through Newegg and indirectly
affect Newegg&rsquo;s reputation. Moreover, negative publicity about other online retailers or the e-commerce industry in general
may arise from time to time and cause customers to lose confidence in the products and services Newegg offers. Any such negative
publicity, regardless of veracity, may have a material adverse effect on its business, reputation and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Newegg is, or may become, subject to risks associated
with its international operations, principally in Canada, which may harm its business.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg began operations on its Canadian retail website, <I>www.newegg.ca</I>,
in October 2008. Newegg also has a physical presence in China, Taiwan and the UK. While Newegg is investing in building its business
in other markets, it may not be able to successfully manage the challenges associated with its current and future international
operations due to risks, such as:</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>international economic and political conditions;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>changes in, or impositions of, legislative or regulatory
                                         requirements on e-commerce businesses and companies, such as U.S. sanctions laws and
                                         regulations, and limitations on its ability to directly own or control key assets, such
                                         as overseas warehouses;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the legal and regulatory environment in foreign jurisdictions,
                                         including with respect to consumer privacy and data protection laws, tax, law enforcement,
                                         network security, trade compliance and intellectual property matters, as well as consumer
                                         litigation;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>tax laws, regulations and treaties, including U.S. taxes
                                         on foreign operations and repatriation of funds;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>difficulties in identifying, attracting, hiring, training
                                         and retaining qualified personnel, and overseeing international operations, including
                                         the efficient management of its international operations;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>delays or additional costs resulting from import/export
                                         controls, duties, tariffs or other barriers to trade; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>currency exchange controls or changes in exchange rates,
                                         which could make its pricing less competitive or reduce its profit margins.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Any one of the foregoing factors could cause Newegg&rsquo;s
business, financial condition and results of operations to suffer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Newegg&rsquo;s expansion into new product categories,
services, technologies and geographic regions subjects it to additional business, legal, financial and competitive risks.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">An important element of Newegg&rsquo;s business strategy is
to expand into new product categories, services, technologies and regions, such as its expansion into Canada and other countries,
and its plans to offer various D2C platform services for third parties. In directing its focus into these new areas, Newegg faces
numerous risks and challenges, including alienating its core customer base, facing new competitors, having the increased need
to develop new strategic relationships and straining its management, personnel, operations, systems, technical performance, financial
resources, and internal financial control and reporting functions. There is no assurance that Newegg&rsquo;s strategy will result
in increased net sales or net income. Furthermore, growth into new business areas may require changes to its existing business
model and cost structure, modifications to its infrastructure, and exposure to new regulatory and legal risks related to operating
in new jurisdictions, any of which may require expertise in areas in which it has little or no experience. These risks may pose
a material adverse risk to Newegg&rsquo;s business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Any interruption in Newegg&rsquo;s fulfillment operations
may have an adverse impact on its business.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s ability to process and fulfill orders accurately
and provide high-quality customer service depends on the smooth operation of its fulfillment infrastructure, including its warehouses
and order processing centers. If it does not optimize and operate its fulfillment infrastructure successfully and efficiently,
it could result in excess or insufficient fulfillment capacity, an increase in costs or impairment charges and a reduction in
its gross profit margin, or harm its business in other ways. If Newegg does not have sufficient fulfillment capacity or experiences
a problem fulfilling orders in a timely manner or if certain products are out of stock, its customers may experience delays in
receiving their orders, which could harm its reputation and its relationship with its customers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s fulfillment infrastructure may be vulnerable
to damage caused by fire, floods, power outages, telecommunications failures, break-ins, earthquakes, human error and other events.
For example, its warehouse located in Indianapolis experienced a significant fire in January 2019, causing damage to its inventory.
Its fulfillment infrastructure and processes may also contain undetected errors or design flaws that may cause its fulfillment
operations to fail and materially impact its business and results of operations. If, for example, any of its warehouses were rendered
incapable of operations, Newegg may be unable to fulfill any orders in areas that rely on that warehouse. The occurrence of any
of the foregoing risks could have a material adverse effect on Newegg&rsquo;s business, prospects, financial condition and results
of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Newegg depends on its vendors to source sufficient quantities
of merchandise on favorable terms. If Newegg fails to maintain strong vendor relationships or if its vendors are otherwise unable
to supply products that meet its standards in a timely manner, its net sales and net income could suffer.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s contracts or arrangements with vendors generally
do not guarantee the availability of merchandise or provide for the continuation of particular pricing or other practices. Newegg&rsquo;s
vendors may not continue to sell their inventory to it on current terms or at all, and, if the terms are changed, Newegg may not
be able to establish new supply relationships on similar or better terms. In most cases, Newegg&rsquo;s relationships with its
vendors do not restrict them from selling their products through its competitors. Newegg competes with other retailers for favorable
product allocations and vendor incentives from product manufacturers and distributors, including marketing dollars and volume-based
sales incentive programs. Some of Newegg&rsquo;s competitors could enter into exclusive or favorable distribution arrangements
for certain products with its vendors, which would deny Newegg complete or partial access to those products and marketing and
promotional resources. In addition, some vendors whose products are offered on Newegg&rsquo;s online platforms also sell their
products directly to customers. If Newegg is unable to develop and maintain relationships with vendors that permit it to obtain
sufficient quantities of desirable merchandise on favorable terms, Newegg&rsquo;s business, financial condition and results of
operations could be adversely impacted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s relationship with any particular vendor is dependent
on its sales of products manufactured or distributed by that vendor. For certain products, Newegg does not currently, and in the
future may not be able to, meet the sales volumes or other requirements necessary to receive favorable treatment from the manufacturer
of that product. As a result, Newegg may not receive favorable pricing, vendor incentives or other considerations from those vendors.
During times of short supply for highly desirable products, Newegg may not receive adequate, or any, allocation of a popular product,
leading to lost sales and customer dissatisfaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Certain products help create and maintain customer loyalty
to the Newegg brand. Failing to maintain an adequate supply of these products could damage its ability to retain customers. Newegg
currently does not carry the full product portfolio of, and in some cases does not carry any products of, certain well-known brands.
As a result, consumers who are searching for those brands may not be able to purchase products from Newegg or purchase them at
the most favorable prices, leading to potentially reduced net sales and net income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Certain vendors provide a significant portion of Newegg&rsquo;s
merchandise. In the United States and Canada, for the six months ended June 30, 2020, ASI Corporation, an IT and CE product distributor,
and Newegg&rsquo;s 10 largest suppliers (including ASI Corporation) accounted for approximately 12.4% and 70.9% of the merchandise
Newegg purchased, respectively. Failure to maintain a positive relationship with these key suppliers could impact Newegg&rsquo;s
ability to sell to customers the products they want.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s vendors&rsquo; financial performance, liquidity
and access to capital may be materially adversely affected by many factors, including but not limited to general economic factors,
such as a continued slowdown in the U.S. or global economy or an uncertain economic outlook; political or financial instability;
merchandise quality issues; product safety concerns; trade restrictions; work stoppages; tariffs; international trade war; foreign
currency exchange rates; transportation capacity and costs; inflation; or outbreak of pandemics. These and other issues may affect
their ability to maintain their inventories, production levels and/or product quality and could cause them to raise prices, lower
production levels or cease their operations, all of which may in turn materially adversely affect Newegg&rsquo;s net sales and
net income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If Newegg fails to attract, retain and engage appropriately
skilled personnel, including senior management and technology and fulfillment professionals, Newegg&rsquo;s business may be harmed.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s future success depends on its retention of executives.
Competition for well-qualified and skilled employees is intense globally, and Newegg&rsquo;s future success also depends on its
continuing ability to attract, develop, motivate and retain highly qualified and skilled employees, including, in particular,
software engineers, data scientists and technology and fulfillment professionals. Newegg&rsquo;s continued ability to compete
effectively depends on its ability to attract new employees and to retain and motivate existing employees. All of its senior management
and key personnel are employees at will and, as a result, any of these employees could leave with little or no prior notice. If
any member of its senior management team or other key employees leave Newegg, its ability to successfully operate its business
and execute its business strategy could be adversely affected. Newegg may also have to incur significant costs in identifying,
hiring, training and retaining replacements of departing employees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Newegg&rsquo;s international sales and operations require
access to international markets and are subject to applicable laws relating to trade, export and import controls and economic
sanctions, the violation of which could adversely affect its operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg must comply with all applicable U.S. export and import
laws and regulations. Such laws and regulations include, but are not limited to, the Export Administration Act and the Export
Administration Regulations. Newegg must also comply with U.S. sanctions laws and regulations, which are primarily administered
by the U.S. Department of Treasury&rsquo;s Office of Foreign Assets Control, as well as other U.S. government agencies. U.S. sanctions
generally prohibit transactions by U.S. persons, including Newegg, involving sanctioned countries, entities and persons, without
U.S. government authorization (which will rarely be granted). Non-U.S. subsidiaries of U.S. companies are required to comply with
U.S. sanctions against Cuba and Iran.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Violations of U.S. laws and regulations relating to trade,
export and import controls and economic sanctions could result in significant civil and/or criminal penalties on Newegg or on
its foreign subsidiaries, including fines, prohibitions on exporting and importing, prohibitions on receiving government contracts
or other government assistance and other trade-related restrictions. U.S. enforcement of such laws and regulations continues to
increase.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg must also comply with applicable foreign laws relating
to trade, export and import controls and economic sanctions. Newegg may not be aware of all of such laws applicable in the markets
in which it does business, which subjects it to the risk of potential violations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Newegg conducts marketing activities to help attract
visitors to its online platforms, and if it is unable to attract these visitors or convert them into customers in a cost-effective
manner, Newegg&rsquo;s business and results of operations could be harmed.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s success depends on its ability to attract
visitors to its online platforms and convert them into customers in a cost-effective manner. Newegg relies on search engines,
social media, shopping comparison sites and other affiliate networks to provide content, advertising banners and other links
that direct visitors to its online platforms. As of June 30, 2020, approximately 36% of its website and mobile app visitors
were referred to it through paid and unpaid search engine listings, shopping comparison sites and other affiliate networks
that provide links to its online platforms. In particular, Newegg relies on search engines, such as Google, Microsoft Bing
and Yahoo!, as important marketing channels. If search engines change their search engine algorithms periodically or penalize
Newegg for non-compliance with their guidelines while using their algorithms, terms of service, or display and featuring of
search results, or if competition increases for advertisements, Newegg may be unable to cost-effectively drive visitors to
its websites and mobile apps. Newegg also sometimes pays these third parties to include or highlight its websites in their
search results. If such third parties modify or terminate their relationship with Newegg or increase the price they charge to
Newegg, if Newegg&rsquo;s competitors offer them greater fees for traffic, or if any free third-party platforms on which
Newegg relies begin charging fees for listing or placement, Newegg&rsquo;s expenses could rise and traffic to its websites
could decrease, resulting in harm to its operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s success also depends on its ability to convert
its visitors to its websites and mobile apps into paying customers, a process which is partially reliant upon its ability to identify
and purchase relevant keyword search terms, provide relevant content on its online platforms and effectively target its other
marketing programs, such as internet portal referrals, e-mail campaigns and affiliate programs. If Newegg is unable to attract
visitors to its websites and mobile apps and convert them into customers cost-effectively, its business and financial results
may be harmed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Newegg is partially dependent on third parties to perform
a number of its e-commerce functions. If such third parties are unwilling or unable to continue providing these services, Newegg&rsquo;s
business could be harmed.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of June 30, 2020, approximately 29.3% of Newegg&rsquo;s
gross merchandise value, or GMV,&nbsp;were generated by the sale of products fulfilled through third parties. These third parties
provide various services on Newegg&rsquo;s behalf, including inventory maintenance and order processing. Newegg has no effective
means to ensure that these third parties will continue to perform these services to its satisfaction, in a manner satisfactory
to its customers or on commercially reasonable terms. Newegg&rsquo;s customers may become dissatisfied and cancel their orders
or decline to make future purchases if these third parties fail to deliver products on a timely basis. If Newegg&rsquo;s customers
become dissatisfied with the services provided by these third parties, Newegg&rsquo;s reputation and brand could suffer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If Newegg fails to manage its inventory effectively,
its financial condition, results of operations and liquidity may be materially and adversely affected.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s scale and business model require it to manage
a large volume of inventory effectively. As Newegg may continue expanding its product offerings, Newegg expects to include more
SKUs in its inventory, which could make it more challenging for Newegg to manage its inventory effectively and put more pressure
on its warehousing system.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg purchases most of the merchandise that it sells directly
to customers on its online platforms from manufacturers or distributors. Newegg assumes inventory damage, theft, obsolescence
and price erosion risks for its inventory. These risks are especially significant as most of the merchandise sold on its online
platforms is characterized by rapid technological change, obsolescence and price erosion. For the six months ended June 30, 2020,
Newegg recorded inventory write-offs or write-downs totaling $1.5 million, or 0.2% of its cost of goods sold. Newegg may sell
obsolete or dated merchandise at a discount or loss. If there were unforeseen product developments or if vendors were to change
their terms and conditions, Newegg&rsquo;s inventory risks could increase. Newegg also periodically takes advantage of cost savings
associated with certain opportunistic bulk inventory purchases offered by its vendors. These bulk purchases increase Newegg&rsquo;s
exposure to inventory obsolescence. Newegg&rsquo;s success depends on its ability to sell its inventory rapidly, purchase inventory
at attractive prices relative to its resale value and manage customer returns and the shrinkage resulting from theft, loss and
misrecording of inventory. If Newegg is unsuccessful in any of these areas, it may be forced to write down or write off substantial
amounts of inventory, or sell it at a discount or loss, which could materially and adversely impact Newegg&rsquo;s business, financial
condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg depends on its demand forecasts for various kinds of
products to make purchase decisions and to manage its inventory. Newegg is exposed to inventory risks as a result of seasonality,
new product launches, rapid changes in product cycles and pricing, defective merchandise, changes in consumer demand, tastes and
spending patterns, and other factors. While Newegg endeavors to accurately predict these trends and avoid overstocking or understocking
products it sells, the demand for products can change significantly between the time inventory is ordered and the date of sale,
and Newegg may be unable to sell products in sufficient quantities as it expects. Furthermore, Newegg may in the future open additional
warehouses and duplicate part of the inventory for its direct sales business that is stored at its current warehouses to increase
its overall fulfillment efficiency as it grows its business, which will also increase the inventory risks its direct sales business
faces. Failure to effectively manage its inventory risk could have a material adverse effect on Newegg&rsquo;s business, financial
condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Newegg has incurred net loss in the past and may continue
to experience losses in the future.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg incurred a net loss of $17.0 million and $33.6 million
in 2019 and 2018, respectively. We cannot assure you that Newegg will be able to generate net profits or positive cash flow from
operating activities in the future. Newegg&rsquo;s ability to achieve and maintain profitability will depend in large part on
its ability to, among other things, source and sell more high margin products, grow and diversify its supplier base, and optimize
its cost structure. Newegg may not be able to achieve any of the above. As Newegg continues to grow and expand its business, its
operating expenses may increase further. As a result of the foregoing, Newegg may incur net losses for in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If Newegg fails to adopt new technologies or adapt its
websites, mobile apps and systems to changing customer requirements or emerging industry standards, its business may be materially
and adversely affected.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To remain competitive, Newegg must continue to enhance and
improve the responsiveness, functionality and features of its online platforms, including its websites and mobile apps. The internet
and the e-commerce industry are characterized by rapid technological evolution, frequent introductions of new products and services
embodying new technologies and the emergence of new industry standards and practices, and changes in customer requirements and
preferences, any of which could render Newegg&rsquo;s existing technologies and systems obsolete. Newegg may be required to devote
substantial resources to developing proprietary technologies or license technologies, enhancing its existing websites and mobile
apps, developing new services and technology that address the increasingly sophisticated and varied needs of its current and prospective
customers and adapting to technological advances and emerging industry and regulatory standards and practices in a cost-effective
and timely manner. The development of proprietary technology entails significant technical and business risks. There can be no
assurance that Newegg&rsquo;s efforts to develop proprietary technologies will succeed or that any technology licenses will be
available on commercially reasonable terms. Substantial investments will be required to remain technologically competitive, and
Newegg&rsquo;s failure to do so may harm its business and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The seasonality of Newegg&rsquo;s business places increased
strain on its operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg historically experiences higher sales in the fourth
quarter due to the holiday season. If Newegg does not stock or restock popular products in sufficient amounts such that it fails
to meet customer demand, it could significantly affect its revenue and future growth. If Newegg overstocks products, Newegg may
be required to take significant inventory markdowns or write-offs and incur commitment costs, which could reduce profitability.
Newegg may experience an increase in its net shipping cost due to complimentary upgrades, split-shipments and additional long-zone
shipments necessary to ensure timely delivery for the holiday season. If too many customers access its online platforms within
a short period of time due to increased holiday demand, Newegg may experience system interruptions that make its online platforms
unavailable or prevent it from efficiently fulfilling orders, which may reduce the volume of goods sold through its online platforms
and the attractiveness of its products and services. In addition, Newegg may be unable to adequately staff its fulfillment and
customer service capability during these peak periods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As Newegg tends to experience higher sales in the fourth quarter,
Newegg experiences an increase in its cash position at year-end, as compared to the first, second and third quarters when sales
are lower. As of December 31 of each year, Newegg&rsquo;s cash, cash equivalents, and marketable securities balances typically
reach their highest level (other than as a result of cash flows provided by or used in investing and financing activities). In
anticipation of higher sales during the holiday season, Newegg typically begins building up inventory levels in the later part
of the third quarter. As a result of this inventory build-up and faster inventory turnover during the fourth quarter, Newegg&rsquo;s
accounts payable are typically at their highest levels at year-end. As sales begin to slow in the first and second quarters, inventory
levels decrease, inventory turnover lengthens, and accounts payable and cash balances decrease as Newegg pays its vendors. The
COVID-19 pandemic has resulted in increased cash and accounts payable balances at June 30, 2020 due to an increased demand for
Newegg&rsquo;s products. Inventory levels increased and turned faster than normal as a result of increased sales.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The successful operation of Newegg&rsquo;s business depends
upon the performance, reliability and security of the internet infrastructure in the countries where it operates.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s business depends on the performance, reliability
and security of the telecommunications and internet infrastructure in the countries where it operates. Newegg has several servers
located in China providing development, testing and quality control services. Almost all access to the internet in China is maintained
through state-owned telecommunication operators under the administrative control and regulatory supervision of the Ministry of
Industry and Information Technology of the People&rsquo;s Republic of China. In addition, the national networks in China are connected
to the internet through state-owned international gateways, which are the only channels through which a domestic user can connect
to the internet outside China. Newegg may face similar or other limitations in other countries in which it operates. Newegg may
not have access to alternative networks in the event of disruptions, failures or other problems with the internet infrastructure
in China or elsewhere. In addition, the internet infrastructure in the countries in which it operates may not support the demands
associated with continued growth in internet usage.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The failure of telecommunications network operators to provide
Newegg with the requisite bandwidth could also interfere with the speed and availability of Newegg&rsquo;s websites and mobile
apps. If the prices that Newegg pays for telecommunications and internet services rise significantly, Newegg&rsquo;s gross margins
could be adversely affected. In addition, if internet access fees or other charges to internet users increase, Newegg&rsquo;s
user traffic may decrease, which in turn may significantly decrease its revenues.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If Newegg is unable to manage its growth or execute its
strategies effectively, Newegg&rsquo;s business and prospects may be materially and adversely affected.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s success depends upon its ability to manage the
growth of its operations effectively. Newegg anticipates expanding further as it pursues its growth strategies. Newegg&rsquo;s
expansion increases the complexity of its business and places a significant strain on its management, operations, technical systems,
financial resources and internal control over financial reporting functions. Newegg&rsquo;s current and planned personnel, systems,
procedures and controls may not be adequate to support and effectively manage its future operations, especially as it employs
personnel in several geographic locations. In addition, Newegg&rsquo;s growth will require it to improve its operational and financial
systems, procedures and controls, successfully manage international operations and hire additional personnel. These efforts may
not be successful, and Newegg may be unable to improve its systems, procedures and controls in a timely manner.&nbsp;Delays or
problems associated with any of these initiatives could harm its business and operating results. These initiatives will also cause
its operating expenses to increase. If Newegg fails to accurately estimate and assess its growth or fails to increase net sales
to match its increased operating expenses, Newegg&rsquo;s financial condition and results of operations could suffer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>An adverse change in the vendor payment terms and conditions
may have a material adverse effect on Newegg&rsquo;s business, financial condition and results of operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg purchases its inventory from vendors on trade accounts
typically requiring payment between 15 and 45 days after the date the inventory is shipped to Newegg. As of June 30, 2020, its
accounts payable balance was approximately $221.9 million with 55 days of payables outstanding. Newegg&rsquo;s accounts payable
balances as of June 30, 2020 represented 46.3% of its liabilities, temporary equity and stockholders&rsquo; equity. An adverse
change in its vendors&rsquo; payment terms and conditions would significantly increase its working capital requirements and have
a material adverse effect on Newegg&rsquo;s business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Because many of the products that Newegg sells are manufactured
abroad, Newegg may face delays, increased cost or quality control deficiencies in the importation of these products, which could
reduce its net sales and profitability.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Many of the products that Newegg purchases for direct sale
on its online platforms are manufactured in countries outside the United States. These imported products subject Newegg to the
risk of changes in import duties or quotas, new restrictions on imports, work stoppages, delays in shipment, freight cost increases,
product cost increases due to foreign currency fluctuations or revaluations and economic uncertainties (including the imposition
of antidumping or countervailing duty orders, safeguards, remedies or compensation and retaliation due to illegal foreign trade
practices) and instability in the political and economic environments of the countries in which the manufacturers of these products
operate. If any of these or other factors were to cause a disruption of trade from these countries, Newegg may be unable to obtain
sufficient quantities of these imported products to satisfy its requirements or its cost of obtaining such products may increase.
Historically, instability in the political and economic environments of the countries in which Newegg&rsquo;s suppliers operate
has not had a material adverse effect on its operations. However, the effect that future changes in economic or political conditions
in the foreign countries where Newegg&rsquo;s supplying manufacturers are located may have on its operations cannot be predicted.
Potential disruptions or delays in supply due to economic or political conditions in foreign countries could adversely affect
Newegg&rsquo;s results of operations unless and until alternative supply arrangements are made.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Newegg may not be able to adequately protect its intellectual
property rights.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg relies on trademark and copyright law, trade secret
protection and confidentiality or licensing agreements with employees, buyers, third-party sellers, brand partners and others
to protect its proprietary rights. These steps may be inadequate, agreements may be violated or there may be inadequate remedies
for a violation of such agreements. Newegg&rsquo;s competitors may independently develop equivalent proprietary information and
rights or may otherwise gain access to Newegg&rsquo;s trade secrets or proprietary information, which could affect Newegg&rsquo;s
ability to compete in the market. There is no assurance that the steps that Newegg has taken will adequately protect its proprietary
rights, especially in countries where the laws or enforcement of the laws may not protect its rights to the same extent or in
the same way as in the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, third parties may infringe or misappropriate Newegg&rsquo;s
proprietary rights, and Newegg could be required to enforce its intellectual property rights, which could require expenditure
of significant financial and managerial resources. Newegg has registered and common law trademark rights in the United States
and certain foreign jurisdictions, as well as pending trademark applications for a number of marks and associated domain names.
Even if it obtains approval for such pending applications, the resulting registrations may not adequately cover its trademarks
or protect it against infringement or dilution by others. Effective trademark, service mark, copyright, patent and trade secret
protection may not be available in every country or jurisdiction in which Newegg&rsquo;s products may be made available online,
which may cause Newegg&rsquo;s business and operating results to suffer. In addition, Newegg may be unable to acquire or protect
relevant domain names in the United States and in other countries. If Newegg is not able to acquire or protect its trademarks,
domain names or other intellectual property, it may experience difficulties in achieving and maintaining brand recognition and
customer loyalty.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Assertions, claims and allegations, even if not true,
that Newegg has infringed or violated intellectual property rights could harm Newegg&rsquo;s business and reputation.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Third parties have, and likely will in the future, assert allegations
and claims of intellectual property infringement against Newegg on the items or their descriptions listed on Newegg&rsquo;s websites
and mobile apps. Any such claims, disputes or litigation, even if resolved in Newegg&rsquo;s favor or not true, could be time-consuming
and costly to defend, and could divert its management&rsquo;s efforts from growing its business. Newegg has intellectual property
complaint and take-down procedures in place to address communications alleging that items listed on online platforms, including
the Newegg Marketplace, infringe third-party copyrights, trademarks or other intellectual property rights. Newegg follows these
procedures to review complaints and relevant facts to determine the appropriate action, which may include removal of the item
from its online platforms and, in certain cases, discontinuing its relationship with a Marketplace seller or brand partner who
violates Newegg&rsquo;s policies. However, these rules and procedures may not effectively reduce or eliminate Newegg&rsquo;s liability.
In particular, Newegg may be subject to civil or criminal liability for activities carried out, including products listed, by
sellers or brands on its online platforms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If any third parties prevail in their intellectual property
rights claims against Newegg, Newegg may be required to pay significant licensing fees, damages and attorney&rsquo;s fees, and
may even be liable for punitive damages if Newegg is found to have willfully infringed third parties&rsquo; proprietary rights.
Newegg may have to stop using certain technology or solutions and need to develop or acquire alternative, non-infringing technology
or solutions, which could require significant time and resources. Newegg could even be required to obtain a license to use certain
technologies, although such licenses may not be available on reasonable terms or at all, which may result in substantial payments
and royalties and significantly increase its operating expenses. If Newegg cannot develop non-infringing technology or license
the appropriate technology at commercially reasonable rates, an intellectual property claim successfully asserted against it could
cause significant business interruptions in Newegg&rsquo;s operations, which could restrict Newegg&rsquo;s ability to compete
effectively and have a material adverse effect on its financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Newegg may be subject to product liability claims, which
could be costly and time-consuming to defend.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The majority of the products sold on Newegg&rsquo;s online
platforms are manufactured by third parties, and some of them may be defectively designed or manufactured. If any product Newegg
sells were to cause physical injury or injury to property, an injured party could bring claims against Newegg as the retailer
of the product. Furthermore, Newegg also offers IT components and peripherals under its private labels on its platforms or through
other e-commerce platforms, such as eBay, which could potentially create more exposure for Newegg with respect to product liability
than if Newegg simply acted as a retailer of third-party products. Newegg&rsquo;s insurance coverage may not be adequate against
such product liability claims. If a successful claim were brought against Newegg in excess of its insurance coverage, it could
adversely affect Newegg&rsquo;s financial condition and results of operations. Even unsuccessful claims could result in the expenditure
of significant funds and management time in defending them and could have a negative impact on Newegg&rsquo;s reputation and business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Some of Newegg&rsquo;s software and systems contain open
source software, which may pose particular risks to Newegg&rsquo;s proprietary software and solutions.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg has incorporated open source software code into some
of its internal software and systems and expects to continue to use this open source software in the future. The licenses applicable
to open source software typically require that the source code subject to the license be made available to the public and that
any modifications or derivative works to open source software continue to be licensed under open source licenses. From time to
time, Newegg may face intellectual property infringement claims from third parties, demands for the release or license of the
open source software or derivative works that Newegg developed using such software (which could include Newegg&rsquo;s proprietary
source code) or claims that otherwise seek to enforce the terms of the applicable open source license. These claims could result
in litigation and could require Newegg to purchase a costly license, publicly release the affected portions of Newegg&rsquo;s
source code, be limited in the licensing of Newegg&rsquo;s technologies or cease offering the implicated solutions unless and
until Newegg can re-engineer them to avoid infringement or change the use of the implicated open source software. In addition
to risks related to license requirements, use of certain open source software can lead to greater risks than use of third-party
commercial software, as open source licensors generally do not provide warranties, indemnities or other contractual protections
with respect to the software (for example, non-infringement or functionality). Newegg&rsquo;s use of open source software may
also present additional security risks because the source code for open source software is publicly available, which may make
it easier for hackers and other third parties to determine how to breach Newegg&rsquo;s websites, mobile apps and systems that
rely on open source software. Any of these risks could be difficult to eliminate or manage and, if not addressed, could have a
material adverse effect on Newegg&rsquo;s business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Newegg and its Marketplace sellers&rsquo; pricing strategy
may not meet customers&rsquo; price expectations or result in net income.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Demand for Newegg&rsquo;s products is generally highly sensitive
to price. Its pricing strategies have had, and may continue to have, a significant impact on its net sales and net income. Newegg
often offers discounted prices, free or discounted shipping or bundled products as a means of attracting customers and encouraging
repeat purchases. Such offers and discounts may reduce its margins. Moreover, Newegg&rsquo;s competitors&rsquo; pricing and marketing
strategies are beyond its control and can significantly impact the results of its pricing strategies. If Newegg fails to meet
its customers&rsquo; price expectations in any given period, or if its competitors decide to engage in aggressive pricing strategies,
its business and results of operations would suffer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, under applicable federal and state unfair competition
laws, including the California Consumer Legal Remedies Act, and U.S. Federal Trade Commission regulations, Newegg is required
to accurately identify product offerings, not make misleading claims on its platforms, and use qualifying disclosures where and
when appropriate. Newegg is particularly subject to the risks associated with its discounting pricing practices as a result of
the aggressive judicial interpretations of deceptive pricing laws, particularly in California, which has led to numerous class
action settlements by online and brick-mortar retailers over the past few years. For example, Newegg was named as the defendant
in a putative class action accusing it of violating the False Advertising Law, the Unfair Competition Law and the Consumer Legal
Remedies Act by using allegedly deceptive list prices with allegedly overstated discounts for its electronic products. While the
trial court had sustained without leave to amend Newegg&rsquo;s demurrer to such lawsuit, in July 2018, a California appellate
panel reversed the trial court&rsquo;s judgment and reinstated the action against Newegg. This matter is still pending as of the
date of this proxy statement/prospectus. There can be no assurance that Newegg will be able to prevail in the foregoing action
or that it will be able to settle the dispute on terms favorable to it. Any adverse outcome of the foregoing class action or other
lawsuits challenging deceptive pricing against Newegg could have a material adverse effect on its reputation, business and financial
condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg does not control the pricing strategies of its Marketplace
sellers, which could affect its net income and its ability to effectively compete on price with other e-commerce retailers and
brick-and-mortar stores. Its Marketplace sellers may determine that they can more competitively price their products through other
distribution channels and may choose such other channels instead of listing products on its Marketplace, which could adversely
affect its business, financial condition, results of operations and prospects. Additionally, retailers and brands often employ
different pricing based on the geographical location of consumers, which is accomplished online through geo-blocking that blocks
a consumer&rsquo;s ability to access certain websites based on geography. Legislation in the European Union removed certain types
of geo-blocking in the European Union. This could allow Newegg&rsquo;s consumers registered in the European Union to access and
make purchases through its Marketplace at the prices listed in different European geographies irrespective of their country of
residence in Europe. This could adversely affect Newegg&rsquo;s business, financial condition, results of operations and prospects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Newegg may incur additional costs due to tax assessments
resulting from ongoing and future audits by tax authorities.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In the ordinary course of business, Newegg is subject to
tax examinations by various governmental tax authorities. The global and diverse nature of Newegg&rsquo;s business means that
there could be additional examinations by governmental tax authorities and the resolution of ongoing and other probable
audits which could impose a future risk to the results of Newegg&rsquo;s business. For example, in February 2018, Newegg
received from the Commonwealth of Massachusetts Department of Revenue a notice of intent to assess sales and use taxes
relating to a prior tax period, which subsequently resulted in an assessment of $295,910.68, including penalties and
interest. In May 2020, Newegg received from the Commonwealth of Massachusetts Department of Revenue another notice of
assessment for sales and use taxes for additional prior tax periods in the amount of a total assessment of $2,721,369.77,
including penalties and interest. Newegg has appealed these assessments and Newegg intends to vigorously protest the
assessments. The outcome of the matter or the timing of such payment, if any, cannot be predicted at this time. However, the
ultimate results, if unfavorable, could have a material impact on Newegg&rsquo;s consolidated financial position, cash flows,
and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Significant developments stemming from recent U.S. government
actions and proposals concerning tariffs and other economic proposals could have a material adverse effect on Newegg.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of June 30, 2020, approximately 59% of Newegg&rsquo;s products
that were sold through its platforms were manufactured in China. Recent U.S. government actions are imposing greater restrictions
and economic disincentives on international trade impacting imports and exports. The U.S. government has adopted changes, and
intends to adopt further changes, to trade policy and in some cases, to renegotiate, or potentially terminate, certain existing
bilateral or multi-lateral trade agreements. It has initiated the imposition of additional tariffs on certain foreign goods, including
steel and aluminum, semiconductor manufacturing equipment and spare parts thereof. The government has amended export regulations
regarding sales to companies on the U.S. Entity List. These changes prevent sales of foreign produced direct product of the US
that is manufactured using controlled U.S.-origin equipment, technology, and software located outside the United States to companies
on the U.S. Entity List.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Examples of recent actions are tariffs on steel and aluminum
product imports announced by the U.S. Department of Commerce in March 2018, the scope of which increased on February 8, 2020,
and a 25% tariff on certain products that originate in China announced by the United States Trade Representative, or USTR, in
June 2018. The USTR also announced in June and July 2018 two additional supplemental lists of products that are subject to tariffs
if the goods imported into the United States originate in China, which would increase the cost of imported products. These supplemental
lists issued by the USTR added an additional 25% tariff on certain semiconductor equipment and parts originating in China that
are sold by Newegg or used in its business in the United States. In August 2018, the second list was made effective with a 25%
tariff and in September 2018 the third list was made effective with a 10% tariff, increasing to 25% in May 2019. A fourth list
was proposed by USTR in May 2019 for all remaining items originating in China. A portion of the fourth list, was made effective
September 1, 2019, with an additional tariff of 15%, reduced to 7.5% on February 14, 2020. The remainder of the fourth list was
scheduled to have an additional tariff of 15% go into effect on December 15, 2019; however on December 13, 2019, the tariffs for
the fourth list were suspended after the U.S. announced it would enter into a trade agreement with China (which we refer to as
the Phase 1 Agreement). Although the Phase 1 Agreement was signed January 15, 2020, implementation has been delayed due to COVID-19;
however, Phase 1 will have no impact on the tariffs imposed on Newegg&rsquo;s products. A Phase 2 Agreement could be announced
after the U.S. elections in November of 2020. Any increase in the cost of importing such goods and parts could decrease Newegg&rsquo;s
margins, reduce the competitiveness of its products, or inhibit its ability to sell products or purchase necessary parts, which
could have a material adverse effect on its business results, results of operations, or financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On April 28, 2020 the U.S. Department of Commerce issued new
rules that (1) expand the definition of military end use and (2) eliminate the applicability of certain license exceptions for
exports to countries on Country Group D of Supplement No. 1 to part 740 of the Export Administration Regulations. These changes
expand export license requirements for U.S. companies to sell certain items to companies in China that have operations that could
support military end uses, even if the items sold by the U.S. companies are for civilian end use and they reduce the applicability
of license exceptions for exports to those countries listed on Country Group D, including China. Additionally, amendments to General
Prohibition Three (Foreign-Produced Direct Product Rule) and the Entity List were effective May 15, 2020. These amendments expand
the restrictions on the sale of foreign-made goods that are based on U.S. technology, and software located outside the United
States to companies on the U.S. Entity List, and regulate the use of U.S. origin semiconductor manufacturing equipment that produces
semiconductor devices for companies on the U.S. Entity List. The rule changes for export controls may reduce or impair customers&rsquo;
ability to sell products internationally, which could in turn decrease the demand for Newegg&rsquo;s products and have a material
adverse effect on its revenues and profitability. At this time, the additional proposed rule changes are not anticipated to impact
Newegg&rsquo;s sales of non-U.S. products; however, any unpredicted rule changes could adversely affect its business results,
operations, or financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Changes in U.S. trade policy could result in one or more U.S.
trading partners adopting responsive trade policy making it more difficult or costly for Newegg s to export its products to those
countries. As indicated above, these measures could also result in increased costs for goods imported into the U.S. This in turn
could require Newegg to increase prices to customers which may reduce demand, or, if it is unable to increase prices, result in
lowering its margin on goods and services sold. To the extent that trade tariffs and other restrictions imposed by the U.S. increase
the price of semiconductor equipment and related parts imported into the U.S., the cost of materials may be adversely affected
and the demand from customers for products and services may be diminished, which could adversely affect Newegg&rsquo;s revenues
and profitability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg cannot predict future trade policy, the terms of any
renegotiated trade agreements or additional imposed tariffs and their impact on Newegg&rsquo;s business. The adoption and expansion
of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs or trade agreements or policies
has the potential to adversely impact demand for Newegg&rsquo;s products, its costs, its customers, its suppliers, and the U.S.
economy, which in turn could adversely impact its business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Changes in U.S. social, political, regulatory and economic
conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries
where it currently develops and sells products, and any negative sentiments towards the United States as a result of such changes,
could adversely affect Newegg&rsquo;s business. In addition, negative sentiments towards the United States among non-U.S. customers
and among non-U.S. employees or prospective employees could adversely affect sales or hiring and retention, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Employment laws in some of the countries in which Newegg
operates are relatively stringent.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of June 30, 2020, Newegg had 1,508 full-time employees,
of whom approximately 52% were located in the United States, 38% in China, 8% in Taiwan, 2% in Canada and 0% in other countries
and regions. In some of the countries in which it operates, employment laws may grant significant job protection to employees,
including rights on termination of employment and setting maximum number of hours and days per week that a particular employee
is permitted to work. In addition, in certain countries in which it operates, Newegg is or may be required to consult and seek
the advice of employee representatives and/or unions. These laws, coupled with the requirement to consult with any relevant employee
representatives and unions, could impact Newegg&rsquo;s ability to react to market changes and the needs of its business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Newegg and certain of its subsidiaries are parties to
a revolving credit agreement, which contains a number of covenants that may restrict Newegg&rsquo;s current and future operations
and could adversely affect Newegg&rsquo;s ability to execute business needs.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg and certain of its subsidiaries have entered into a
credit agreement with financial institutions which contain a number of covenants that limit its ability and its subsidiaries&rsquo;
ability to, among other things, incur indebtedness, create liens, make investments, merge with other companies, dispose of its
assets, prepay other indebtedness and make dividends and other distributions. The obligations under the credit agreements are
also guaranteed by assets of Newegg or those of Newegg&rsquo;s subsidiaries. The terms of the credit agreements may restrict Newegg&rsquo;s
current and future operations and could adversely affect Newegg&rsquo;s ability to finance its future operations or capital needs
or to execute business strategies in the means or manner desired. In addition, complying with these covenants may make it more
difficult for it to successfully execute its business strategy, invest in its growth strategy and compete against companies who
are not subject to such restrictions. The credit agreements also contain financial covenants that require Newegg to maintain certain
minimum financial ratios and maintain an operating banking relationship with the financial institutions. Although Newegg has been
in compliance with the financial covenants, it cannot guarantee that it will continue to be able to generate sufficient cash flow
or sales to meet the financial covenants or pay the principal or interest under the credit agreements.</P>

<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If Newegg is unable to comply with its payment requirements,
the financial institutions may accelerate Newegg&rsquo;s obligations under the credit agreement and foreclose upon the collateral,
or it may be forced to sell assets, restructure its indebtedness or seek additional equity capital, which would dilute shareholders&rsquo;
interests. If Newegg fails to comply with any covenant it could result in an event of default under the agreement and the lenders
could make the entire debt immediately due and payable. If this occurs, Newegg might not be able to repay the debt or borrow sufficient
funds to refinance it. Even if new financing is available, it may not be on terms that are acceptable to Newegg.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_037"></A>Risks Related to Ownership of our
Common Shares</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>If we fail to maintain compliance with NASDAQ Listing
Rules, we may be delisted from the NASDAQ Capital Market, which would result in a limited public market for trading our shares
and make obtaining future debt or equity financing more difficult for us.</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Our Class A common shares are traded and listed on the NASDAQ
Capital Market under the symbol of &ldquo;LLIT.&rdquo; On September 11, 2019, we received a notification letter from the NASDAQ
Listing Qualifications Staff of NASDAQ notifying us that the minimum bid price per share for our Class A common shares had been
below $1.00 for a period of 30 consecutive business days and we therefore no longer met the minimum bid price requirements set
forth in NASDAQ Listing Rule 5550(a)(2). We were granted a compliance period of 180 days, or until March 9, 2020 to regain the
compliance. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> On January 2, 2020, we received another notification letter
from the NASDAQ Listing Qualifications Staff notifying us that we no longer complied with the minimum of $2.5 million in stockholders&rsquo;
equity for continued listing on the NASDAQ Capital Market under NASDAQ&rsquo;s Listing Rule 5550(b)(1) and that we also did not
comply with either of the two alternative standards of Listing Rule 5550(b), the market value standard and the net income standard.
We thereafter submitted a plan to regain compliance with NASDAQ&rsquo;s applicable listing standards. On March 10, 2020, in consideration
of our recent three financings, from which we received gross proceeds of approximately $8.08 million, the NASDAQ Listing Qualifications
Staff determined that we comply with the stockholders&rsquo; equity requirement set forth in Listing Rule 5550(b)(1). On the same
date, given that except the minimum bid price requirement, we met all other applicable requirements for initial listing on the
NASDAQ Capital Market, the NASDAQ Listing Qualifications Staff recognized our intention of curing the bid price deficiency by
effecting a reverse stock split, and granted a second compliance period of 180 days, or until September 8, 2020, to regain compliance.
The second compliance period was thereafter extended to November 20, 2020 by NASDAQ per SR-NASDAQ-2020-021. On October 21, 2020,
we effectuated a share combination of our common shares at a ratio of one-for-eight in order to increase the per share trading
price of our Class A common shares to satisfy the $1.00 minimum bid price requirement. We regained  compliance with the minimum
bid price rule on November 10, 2020. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> However, there is no assurance that we will be able to continue
to maintain our compliance with the NASDAQ continued listing requirements. If we fail to do so, our Class A common shares may
lose their status on NASDAQ Capital Market and they would likely be traded on the over-the-counter markets, including the Pink
Sheets market. As a result, selling our common shares could be more difficult because smaller quantities of shares would likely
be bought and sold, transactions could be delayed, and security analysts&rsquo; coverage of us may be reduced. In addition, in
the event our common shares are delisted, broker dealers would bear certain regulatory burdens which may discourage broker dealers
from effecting transactions in our common shares and further limit the liquidity of our shares. These factors could result in
lower prices and larger spreads in the bid and ask prices for our common shares. Such delisting from NASDAQ and continued or further
declines in our common share price could also greatly impair our ability to raise additional necessary capital through equity
or debt financing and could significantly increase the ownership dilution to shareholders caused by our issuing equity in financing
or other transactions. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>An active trading market for our common shares may not
develop and the trading price for the common shares may fluctuate significantly.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">It is a closing condition to merger that our common shares
continue to list on NASDAQ. The post-merger entity will be required to meet the initial listing standards of NASDAQ. We may not
be able to meet those initial listing requirements. Even if our common shares are approved for listing on NASDAQ upon completion
of the merger, we cannot assure you that a liquid public market for our common shares will develop. If an active public market
for our common shares does not develop, the market price and liquidity of our common shares may be materially and adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The trading price of the common shares is likely to be
volatile and could fluctuate widely due to multiple factors, some of which are beyond our control.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The market price of our common shares is volatile, and this
volatility may continue. This may happen because of broad market and industry factors. In addition to market and industry factors,
the price and trading volume for the common shares may be highly volatile due to other factors, including the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>variations in our revenues, operating costs and expenses,
                                         earnings, and cash flow;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>announcements of new investments, acquisitions, strategic
                                         partnerships or joint ventures by us or our competitors;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>announcements about our earnings that are not in line
                                         with analysts&rsquo; expectations;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>announcements of new products and services by us or our
                                         competitors;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>changes in financial estimates by securities analysts;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>detrimental adverse publicity about us, our shareholders,
                                         affiliates, directors, officers or employees, our product offerings, our business model,
                                         or our industry;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>announcements of new regulations, rules or policies relevant
                                         for our business;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>additions or departures of key personnel;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>release of lock-up or other transfer restrictions on
                                         our outstanding equity securities or sales of additional equity securities; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>potential litigation or regulatory investigations.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Any of these factors may result in large and sudden changes
in the volume and price at which the common shares will trade.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In the past, shareholders of a public company often brought
securities class action suits against the company following periods of instability in the market price of that company&rsquo;s
securities. If we were involved in a class action suit, it could divert a significant amount of our management&rsquo;s attention
and other resources from our business and operations, which could harm our results of operations and require us to incur significant
expenses to defend the suit. Any such class action suit, whether or not successful, could harm our reputation and restrict our
ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant
damages, which could have a material adverse effect on our financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If we were delisted from NASDAQ, we may become subject
to the trading complications experienced by &ldquo;Penny Stocks&rdquo; in the over-the-counter market.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Delisting from NASDAQ may cause our common shares to become
subject to the SEC&rsquo;s &ldquo;penny stock&rdquo; rules. The SEC generally defines a penny stock as an equity security that
has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions.
One such exemption is to be listed on NASDAQ. The market price of our common shares is currently below $5.00 per share. Therefore,
if we were to be delisted from NASDAQ, our common shares will become subject to the SEC&rsquo;s &ldquo;penny stock&rdquo; rules.
These rules require, among other things, that any broker engaging in a purchase or sale of our securities provide its customers
with: (i) a risk disclosure document, (ii) disclosure of market quotations, if any, (iii) disclosure of the compensation of the
broker and its salespersons in the transaction, and (iv) monthly account statements showing the market values of our securities
held in the customer&rsquo;s accounts. A broker would be required to provide the bid and offer quotations and compensation information
before effecting the transaction. This information must be contained on the customer&rsquo;s confirmation. Generally, brokers
are less willing to effect transactions in penny stocks due to these additional delivery requirements. These requirements may
make it more difficult for shareholders to purchase or sell our common shares. Since the broker, not us, prepares this information,
we would not be able to assure that such information is accurate, complete or current.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We will be a &ldquo;controlled company&rdquo; within
the meaning of the NASDAQ rules and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance
requirements. You will not have the same protections afforded to shareholders of companies that are subject to such requirements.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> After completion of the merger, our principal shareholders
will continue to control a majority of the voting power of our outstanding common shares. As a result, we will be a &ldquo;controlled
company&rdquo; within the meaning of NASDAQ&rsquo;s corporate governance standards. Under these rules, a company of which more
than 50% of the voting power is held by an individual, group or another company is a &ldquo;controlled company.&rdquo; For so
long as we remain a controlled company under this definition, we are permitted to elect to rely on certain exemptions from corporate
governance rules, including: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>an exemption from the rule that a majority of our board
                                         of directors must be independent directors;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>an exemption from the rule that the compensation of our
                                         chief executive officer must be determined or recommended solely by independent directors;
                                         and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>an exemption from the rule that our director nominees
                                         must be selected or recommended solely by independent directors.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As a result, you will not have the same protection afforded
to shareholders of companies that are subject to these corporate governance requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If securities or industry analysts do not publish research
or reports about our business, or if they adversely change their recommendations regarding our A common shares, the market price
for our common shares and trading volume could decline.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The trading market for our common shares will be influenced
by research or reports that industry or securities analysts publish about our business. If one or more analysts who cover us downgrade
our common shares, the market price for our common shares would likely decline. If one or more of these analysts cease to cover
us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the
market price or trading volume for our common shares to decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Techniques employed by short sellers may drive down the
market price of our common shares.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Short selling is the practice of selling securities that the
seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later
date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale
of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase
than it received in the sale. As it is in the short seller&rsquo;s interest for the price of the security to decline, many short
sellers publish, or arrange for the publication of, negative opinions and allegations regarding the relevant issuer and its business
prospects in order to create negative market momentum and generate profits for themselves after selling a security short. These
short attacks have, in the past, led to selling of shares in the market. If we were to become the subject of any unfavorable allegations,
whether such allegations are proven to be true or untrue, we could have to expend a significant amount of resources to investigate
such allegations and/or defend ourselves. While we would strongly defend against any such short seller attacks, we may be constrained
in the manner in which we can proceed against the relevant short seller by principles of freedom of speech, applicable state law
or issues of commercial confidentiality.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Because we do not expect to pay dividends in the foreseeable
future, you must rely on a price appreciation of our common shares for a return on your investment.</I></B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We currently intend to retain most, if not all, of our funds
and any future earnings to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends
in the foreseeable future. Therefore, you should not rely on an investment in our common shares as a source for any future dividend
income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our board of directors has complete discretion as to whether
to distribute dividends, subject to our amended and restated memorandum and articles of association and certain requirements of
BVI law. Under BVI law, a BVI company may pay a dividend provided the directors are satisfied that immediately following the dividend
the value of the company&rsquo;s assets will exceed its liabilities and the company will be able to pay its debts as they fall
due. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if
any, will depend on our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions,
if any, received by us from our subsidiaries, our financial condition, contractual restrictions, and other factors deemed relevant
by our board of directors. Accordingly, the return on your investment in our common shares will likely depend entirely upon any
future price appreciation of our common shares. There is no guarantee that our common shares will appreciate in value or even
maintain the price at which you purchased our common shares. You may not realize a return on your investment in our common shares
and you may even lose your entire investment in our common shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Investors may have difficulty enforcing judgments against
us, our directors and management.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We are incorporated under the laws of the BVI and many of our
directors and officers reside outside the United States. Moreover, many of these persons do not have significant assets in the
United States. As a result, it may be difficult or impossible to effect service of process within the United States upon these
persons, or to recover against us or them on judgments of U.S. courts, including judgments predicated upon the civil liability
provisions of the U.S. federal securities laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The courts of the BVI would not automatically enforce judgments
of U.S. courts obtained in actions against us or our directors and officers, or some of the experts named herein, predicated upon
the civil liability provisions of the U.S. federal securities laws, or entertain actions brought in the BVI against us or such
persons predicated solely upon U.S. federal securities laws. Further, there is no treaty in effect between the United States and
the BVI providing for the enforcement of judgments of U.S. courts in civil and commercial matters, and there are grounds upon
which BVI courts may decline to enforce the judgments of U.S. courts. Some remedies available under the laws of U.S. jurisdictions,
including remedies available under the U.S. federal securities laws, may not be allowed in the BVI courts if contrary to public
policy in the BVI. Because judgments of U.S. courts are not automatically enforceable in the BVI, it may be difficult for you
to recover against us or our directors and officers based upon such judgments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>Certain types of class or derivative actions generally
available under U.S. law may not be available as a result of the fact that we are incorporated in the BVI. As a result, the rights
of shareholders may be limited.</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Shareholders of BVI companies may not have standing to initiate
a shareholder derivative action in a court of the United States. The BVI courts are also unlikely to recognize or enforce against
us judgments of courts in the United States based on certain liability provisions of U.S. securities law or to impose liabilities
against us, in original actions brought in the BVI, based on certain liability provisions of U.S. securities laws that are penal
in nature.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>You may have more difficulty protecting your interests
than you would as a shareholder of a U.S. corporation.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our corporate affairs will be governed by the provisions of
our amended and restated memorandum and articles of association, as amended and restated from time to time, and by the provisions
of applicable BVI law. The rights of shareholders and the fiduciary responsibilities of our directors and officers under BVI law
are not as clearly established as they would be under statutes or judicial precedents in some jurisdictions in the United States,
and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">These rights and responsibilities are to a large extent governed
by the British Virgin Island Business Companies Act, 2004 as amended from time to time, or the BVI Act, and the common law of
the BVI. The common law of the BVI is derived in part from judicial precedent in the BVI as well as from English common law, which
has persuasive, but not binding, authority on a court in the BVI. In addition, BVI law does not make a distinction between public
and private companies and some of the protections and safeguards (such as statutory&nbsp;pre-emption&nbsp;rights, save to the
extent expressly provided for in the memorandum and articles of association) that investors may expect to find in relation to
a public company are not provided for under BVI law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">There may be less publicly available information about us than
is regularly published by or about U.S. issuers. Also, the BVI regulations governing the securities of BVI companies may not be
as extensive as those in effect in the United States, and the BVI law and regulations regarding corporate governance matters may
not be as protective of minority shareholders as state corporation laws in the United States. Therefore, you may have more difficulty
protecting your interests in connection with actions taken by our directors and officers or our principal shareholders than you
would as a shareholder of a corporation incorporated in the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The laws of BVI provide limited protections for minority
shareholders, so minority shareholders will not have the same options as to recourse in comparison to the United States if the
shareholders are dissatisfied with the conduct of our affairs.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Under the laws of the BVI there is limited statutory protection
of minority shareholders other than the provisions of the BVI Act dealing with shareholder remedies. The principal protections
under BVI statutory law are derivative actions, actions brought by one or more shareholders for relief from unfair prejudice,
oppression and unfair discrimination and/or to enforce the BVI Act or the memorandum and articles of association. Shareholders
are entitled to have the affairs of the company conducted in accordance with the BVI Act and the memorandum and articles of association,
and are entitled to payment of the fair value of their respective shares upon dissenting from certain enumerated corporate transactions.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">There are common law rights for the protection of shareholders
that may be invoked, largely dependent on English company law, since the common law of the BVI is limited. Under the general rule
pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse to interfere with the management
of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company&rsquo;s
affairs by the majority or the board of directors. However, every shareholder is entitled to seek to have the affairs of the company
conducted properly according to law and the constitutional documents of the company. As such, if those who control the company
have persistently disregarded the requirements of company law or the provisions of the company&rsquo;s memorandum and articles
of association, then the courts may grant relief. Generally, the areas in which the courts will intervene are the following: (i)
a company is acting or proposing to act illegally or beyond the scope of its authority; (ii) the act complained of, although not
beyond the scope of the authority, could only be effected if duly authorized by more than the number of votes which have actually
been obtained; (iii) the individual rights of the plaintiff shareholder have been infringed or are about to be infringed; or (iv)
those who control the company are perpetrating a &ldquo;fraud on the minority.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">These rights may be more limited than the rights afforded to
minority shareholders under the laws of states in the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Other than as set forth in the BVI Act, shareholders of BVI
companies like us have no general rights under BVI law to inspect corporate records or to obtain copies of lists of shareholders
of these companies. Our directors have discretion to determine whether or not, and under what conditions, our corporate records
may be inspected by our shareholders, but are not obliged to make them available to our shareholders, other than as set forth
in the BVI Act. This may make it more difficult for you to obtain the information needed to establish any facts necessary for
a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As a result of all of the above, our public shareholders may
have more difficulty in protecting their interests in the face of actions taken by our management, members of the board of directors
or controlling shareholders than they would as public shareholders of a company incorporated in the United States.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>As a company incorporated in the BVI, we are permitted
to adopt certain home country practices in relation to corporate governance matters that differ significantly from NASDAQ corporate
governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied
fully with NASDAQ&rsquo;s corporate governance listing standards.</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> As a BVI company listed on the NASDAQ Capital Market, we
are subject to NASDAQ&rsquo;s corporate governance listing standards. However, NASDAQ rules permit a foreign private issuer like
us to follow the corporate governance practices of its home country. Certain corporate governance practices in the BVI, which
is our home country, may differ significantly from the NASDAQ corporate governance listing standards. We intend to follow BVI
corporate governance practices in lieu of the corporate governance requirements of NASDAQ that listed companies must have for
as long as we qualify as a foreign private issuer </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">For instance, we are not required to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>have a majority of the board be independent (although
                                         all of the members of the audit committee must be independent under the Exchange Act);</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>have a compensation committee and a nominating committee
                                         to be comprised solely of independent directors; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>hold an annual meeting of shareholders no later than
                                         one year after the end of the Company&rsquo;s fiscal year-end.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To the extent we choose to follow home country practice in
the future, our shareholders may be afforded less protection than they otherwise would enjoy under NASDAQ&rsquo;s corporate governance
listing standards applicable to U.S. domestic issuers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>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 applicable to U.S. domestic public companies.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Because we qualify as a foreign private issuer under the Exchange
Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to
U.S. domestic issuers, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the rules under the Exchange Act requiring the filing
                                         with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the sections of the Exchange Act regulating the solicitation
                                         of proxies, consents or authorizations in respect of a security registered under the
                                         Exchange Act;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the sections of the Exchange Act requiring insiders to
                                         file public reports of their share ownership and trading activities and liability for
                                         insiders who profit from trades made in a short period of time; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the rules under Regulation FD governing selective disclosure
                                         rules of material nonpublic information.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We will be required to file an annual report on Form 20-F within
four months of the end of each fiscal year. In addition, we intend to publish our results on a quarterly basis as press releases,
distributed pursuant to the rules and regulations of NASDAQ. Press releases relating to financial results and material events
will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will
be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you
may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic
issuer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="al_038"></A>THE COMPANIES</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_039"></A>Lianluo Smart Limited</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company, through its wholly owned Chinese subsidiaries,
has been engaged in the medical device business, currently focusing on the development, production and marketing of sleep respiratory
analysis system and cardiopulmonary resuscitation devices in China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company has developed and distributed medical devices,
with a focus on sleep respiratory solutions for OSAS, since 2010. The Company provides users with medical grade detection and
monitoring, long-distance treatment and integration solutions of professional rehabilitation. Since 2018, the Company has been
providing examination services to hospitals and medical centers through its proprietary medical wearable devices, and doctors
are able to refer to examination results provided by such devices in making diagnoses regarding OSAS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company was incorporated pursuant to the laws of the BVI
on July 22, 2003 under the name &ldquo;De-Haier Medical Systems Limited.&rdquo; It changed its name to &ldquo;Lianluo Smart Limited&rdquo;
on November 21, 2016. As a holding company, the Company does not conduct business in China and instead relies on Lianluo Connection,
and prior to August 2020, Beijing Dehaier, to operate in China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company&rsquo;s Class A common shares are listed on the
NASDAQ Capital Market under the symbol &ldquo;LLIT.&rdquo; The Company&rsquo;s principal executive offices are located at Room
611, 6th Floor, BeiKong Technology Building, No. 10 Baifuquan Road, Changping District, Beijing 102200,&nbsp;People&rsquo;s Republic
of China, and its telephone number is +86-10-89788107.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On October 21, 2020, we completed a share combination of our
common shares at a ratio of one-for-eight, which decreased our outstanding Class A common shares from 17,685,475 shares to 2,210,683
shares and our outstanding Class B common shares from 11,111,111 shares to 1,388,888 shares. This share combination also decreased
our authorized shares to 6,250,000 common shares of par value of $0.021848 each, of which 4,736,111 are designated as Class
A common shares and 1,513,889 are designated as Class B common shares. Accordingly, except as otherwise indicated, all share and
per share information contained in this proxy statement/prospectus has been restated to retroactively show the effect of this
share combination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">See &ldquo;Information about the Company&rdquo; and &ldquo;Management
Discussion and Analysis of Financial Condition and Results of Operations for the Company&rdquo; for important business and financial
information regarding the Company.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_040"></A>Lightning Delaware Sub, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Merger Sub was formed in the State of Delaware on September
23, 2020 and is a wholly owned subsidiary of the Company. Merger Sub was formed solely for the purpose of completing the merger.
Merger Sub has not carried on any activities to date, except for activities incidental to its formation and activities undertaken
in connection with the merger agreement and the merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Merger Sub is a privately-held corporation and its securities
do not trade on any marketplace. The principal executive offices of Merger Sub are located at c/o the Company, Room 611, 6th Floor,
BeiKong Technology Building, No. 10 Baifuquan Road, Changping District, Beijing 102200,&nbsp;People&rsquo;s Republic of China,
and its telephone number is +86-10-89788107.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_041"></A>Newegg Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg is a tech-focused e-commerce company in North
America, and ranked second after Best Buy as the global top electronics online marketplace according to Web Retailer&rsquo;s report, as measured by 32.4 million
visits per month in 2019. Through newegg.com and other online platforms, Newegg operates a direct sales and marketplace
models for IT computer components, consumer electronics, entertainment, smart home and gaming products and provides certain
third party logistics services globally.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg is a privately-held corporation and its securities do
not trade on any marketplace. The principal executive offices of Newegg are located at 17560 Rowland Street, City of Industry,
CA 91748, and its telephone number is 626-271-9700. Newegg maintains a website at www.newegg.com. Information on Newegg&rsquo;s
website is not incorporated by reference into or otherwise part of this proxy statement/prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">See &ldquo;Information about Newegg&rdquo; and &ldquo;Management
Discussion and Analysis of Financial Condition and Results of Operations for Newegg&rdquo; for important business and financial
information regarding Newegg.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="al_042"></A>SPECIAL MEETING
OF SHAREHOLDERS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>We are providing this proxy statement/prospectus to our
shareholders in connection with the solicitation of proxies to be voted at the special meeting (or any adjournment or postponement
of the special meeting). </B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_043"></A>Date, Time and Location</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Together with this proxy statement/prospectus, we are also
sending shareholders a notice of the special meeting and a form of proxy card that is solicited by our board of directors for
use at the special meeting to be held on [&nbsp;&nbsp; ], 2020 at 10:00 a.m., local time, at our offices located at Room 611,
6th Floor, BeiKong Technology Building, No. 10 Baifuquan Road, Changping District, Beijing, 102200, People&rsquo;s Republic of
China, and any adjournments or postponements of the special meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Only shareholders or their proxy holders may attend the special
meeting.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_044"></A>Purpose</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">At the special meeting, shareholders will be asked to consider
and vote on the following proposals:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>to adopt the merger agreement (we refer to this proposal
                                         as the merger proposal);</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>to adopt the disposition agreement (we refer to this
                                         proposal as the disposition proposal);</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to approve the redesignation of all issued and
                                                                                                                                                      unissued Class A common shares of par value of $0.021848 each and Class B common shares of par value of $0.021848 each into
                                                                                                                                                      common shares of par value of $0.021848 each on a one to one basis, thus eliminating the Company&rsquo;s dual class structure
                                                                                                                                                      (we refer to this proposal as the redesignation proposal);</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>to approve a share combination of our issued and outstanding
                                         common shares by a ratio of not less than one-for-two and not more than one-for-fifty
                                         at any time no later than June 30, 2021, with the exact ratio to be set at a whole number
                                         within this range, as determined by our board of directors in its sole discretion (we
                                         refer to this proposal as the share combination proposal);</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         approve an increase of the number of common shares that the Company is authorized to
                                         an unlimited number of common shares (we refer to this proposal as the share increase
                                         proposal);</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>to approve a change of the name of the Company to &ldquo;Newegg
                                         Commerce, Inc.&rdquo; (we refer to this proposal as the name change proposal);</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         approve an amendment and restatement of our current amended and restated memorandum and
                                         articles of association to effect the redesignation proposal, the share combination
                                         proposal, the share increase proposal and the name change proposal, as well as certain
                                         other amendments described in this proxy statement/prospectus (we refer to this proposal
                                         as the charter amendment proposal); and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         approve the adjournment of the special meeting if necessary to solicit additional proxies
                                         if there are not sufficient votes to approve the merger proposal, the disposition proposal,
                                         the redesignation proposal, the share combination proposal, the share increase proposal,
                                         the name change proposal or the charter amendment proposal at the time of the special
                                         meeting, or any adjournment or postponement thereof (we refer to this proposal as the
                                         adjournment proposal).</FONT></TD></TR></TABLE>





<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Under our memorandum and articles of association, the business
to be conducted at the special meeting will be limited to the proposals set forth in the notice to shareholders provided with
this proxy statement/prospectus.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_045"></A>Recommendations of Board of Directors</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Each of the special committee and our board of directors unanimously
determined that the merger agreement and the transactions contemplated thereby, including the issuance of common shares in connection
with the merger, the disposition agreement and the transactions contemplated thereby, as well as the other proposals set forth
above, are advisable and fair to and in the best interests of the Company and its shareholders. Each of the special committee
and our board of directors unanimously recommends that shareholders vote &ldquo;FOR&rdquo; the merger proposal, &ldquo;FOR&rdquo;
the disposition proposal, &ldquo;FOR&rdquo; the redesignation proposal, &ldquo;FOR&rdquo; the share combination proposal, &ldquo;FOR&rdquo;
the share increase proposal, &ldquo;FOR&rdquo; the name change proposal, &ldquo;FOR&rdquo; the charter amendment proposal and
&ldquo;FOR&rdquo; the adjournment proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_046"></A>Record Date; Outstanding Shares;
Shareholders Entitled to Vote</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our board of directors has fixed the close of business on [&nbsp;&nbsp;],
2020 as the record date for determination of the shareholders entitled to vote at the special meeting, or any adjournment or postponement
thereof. Only shareholders of record at the record date are entitled to receive notice of, and to vote at, the special meeting,
or any adjournment or postponement thereof. As of the close of business on the record date, there were [&nbsp;&nbsp; ] Class A
common shares and [&nbsp;&nbsp; ] Class B common shares outstanding and entitled to vote at the special meeting. Each Class A
common share is entitled to one vote per share and each Class B common share is entitled to ten votes per share.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_047"></A>Quorum</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The presence at the commencement of the special meeting, in
person or by proxy, of not less than 50% of the votes of the common shares issued and outstanding and entitled to vote constitutes
a quorum for the special meeting. Abstentions will be deemed present at the special meeting for the purpose of determining the
presence of a quorum. Shares held in &ldquo;street name&rdquo; with respect to which the beneficial owner fails to give voting
instructions to the broker, bank or other nominee holder of record will not be deemed present at the special meeting for the purpose
of determining the presence of a quorum.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Shares held in &ldquo;street name&rdquo; with respect to which
the beneficial owner fails to give voting instructions to the broker, bank or other nominee holder of record on any of the proposals
to be voted on at the special meeting, and shares with respect to which the beneficial owner otherwise fails to vote, will not
be deemed present at the special meeting for the purpose of determining the presence of a quorum. Accordingly, we encourage you
to provide voting instructions to your broker, whether or not you plan to attend the special meeting.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_048"></A>Required Vote</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Assuming that a quorum is present, approval of the merger
proposal, the disposition proposal, the redesignation proposal, the share combination proposal, the share increase proposal,
the name change proposal and the charter amendment proposal each requires the affirmative vote of both (i) a majority of the
votes cast at the special meeting and (ii) a majority of the votes cast at the special meeting which are not beneficially
owned by Hangzhou Lianluo. In addition, assuming that a quorum is present, approval of the redesignation proposal also
requires the affirmative vote of a majority of the issued and outstanding Class B common shares entitled to vote and voting
on that proposal at the special meeting. The affirmative vote of a majority of the votes cast at the special meeting is
required to approve the adjournment proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_049"></A>Share Ownership of and Voting by
Directors and Executive Officers</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">At the record date for the special meeting (the close of business
on [&nbsp;&nbsp; ], 2020), our directors and executive officers and their affiliates beneficially owned and had the right to vote
in the aggregate [&nbsp;&nbsp; ] common shares, which represents approximately [&nbsp;&nbsp; ]% of the common shares entitled
to vote as of that date. It is expected that our directors and executive officers and their affiliates will vote their shares
for each of the proposals at the time of the special meeting.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_050"></A>Voting of Shares</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Via the Internet or by Telephone</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If you hold shares directly in your name as a shareholder of
record, you may vote via the Internet or by telephone in accordance with the instructions on your proxy card. In order to submit
a proxy to vote via the Internet or by telephone, you will need the control number on your proxy card (which is unique to each
shareholder to ensure all voting instructions are genuine and to prevent duplicate voting). Votes may be submitted via the Internet
or by telephone 24 hours a day, seven days a week, and must be received by 11:59 p.m. (Eastern Time) on [&nbsp;&nbsp; ], 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If you hold shares in &ldquo;street name,&rdquo; meaning through
a broker, bank or other nominee holder of record, you may vote via the Internet only if Internet voting is made available by your
broker, bank or other nominee holder of record. Please follow the voting instructions provided by your broker, bank or other nominee
holder of record with these materials.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>By Mail </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If you hold shares directly in your name as a shareholder of
record, you may submit a proxy card to vote your shares by mail. You will need to complete, sign and date your proxy card and
return it using the postage-paid return envelope provided. Your proxy card must be received no later than the close of business
on [&nbsp;&nbsp; ], 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If you hold shares in &ldquo;street name,&rdquo; meaning through
a broker, bank or other nominee holder of record, in order to provide voting instructions by mail, you will need to complete,
sign and date the voting instruction form provided by your broker, bank or other nominee holder of record with these materials
and return it in the postage-paid return envelope provided. Your broker, bank or other nominee holder of record must receive your
voting instruction form in sufficient time to vote your shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>In Person </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If you hold shares directly in your name as a shareholder of
record, you may vote in person at the special meeting. Shareholders of record also may be represented by another person at the
special meeting by executing a proper proxy designating that person and having that proper proxy be presented to the judge of
election with the applicable ballot at the special meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">When a shareholder of record submits a proxy via the Internet
or by telephone, his or her proxy is recorded immediately. You are encouraged to register your vote via the Internet or by telephone
whenever possible. If you submit a proxy via the Internet or by telephone, please do not return your proxy card by mail. If you
attend the meeting, you may also vote in person. Any votes that you previously submitted&mdash;whether via the Internet or by
telephone&mdash;will be revoked and superseded by any vote that you cast at the special meeting. Your attendance at the special
meeting alone will not revoke any proxy previously given.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If you hold shares in &ldquo;street name&rdquo; through a broker,
bank or other nominee holder of record, you must obtain a proxy, executed in your favor, from the bank or broker to be able to
vote in person at the special meeting. To request a proxy, please contact your broker, bank or other nominee holder of record.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Whether you vote via the Internet, by telephone or mail, or
in person, if your shares are held in an account at a broker, bank or other nominee holder of record (i.e., in &ldquo;street name&rdquo;),
you must instruct the broker, bank or other nominee holder of record on how to vote your shares. Your broker, bank or other nominee
holder of record will vote your shares only if you provide instructions on how to vote by filling out the voting instruction form
sent to you by your broker, bank or other nominee holder of record with this proxy statement/prospectus. Brokers, banks and other
nominee holders of record who hold shares in &ldquo;street name&rdquo; typically have the authority to vote in their discretion
on &ldquo;routine&rdquo; proposals when they have not received instructions on how to vote from the beneficial owner. However,
brokers, banks and other nominee holders of record typically are not allowed to exercise their voting discretion on matters that
are &ldquo;non-routine&rdquo; without specific instructions on how to vote from the beneficial owner. Under the current rules
of the NYSE, all proposals to be considered at the special meeting as described in this proxy statement/prospectus are considered
non-routine. Therefore brokers, banks and other nominee holders of record do not have discretionary authority to vote on these
proposals.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">All shares represented by each properly completed and valid
proxy received before or at the special meeting will be voted in accordance with the instructions given in the proxy. If a shareholder
signs a proxy card and returns it without giving instructions for the voting on any proposal, the shares represented by that proxy
card will be voted &ldquo;FOR&rdquo; each proposal at the time of the special meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Your vote is very important, regardless of the number of
shares you own. Whether or not you expect to attend the special meeting in person, please vote or otherwise submit a proxy to
vote your shares as promptly as possible so that your shares may be represented and voted at the special meeting. If your shares
are held in the name of a bank, broker or other nominee holder of record, please follow the instructions on the voting instruction
form furnished to you by such record holder. </B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_051"></A>Revocability of Proxies; Changing
Your Vote</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">You may revoke your proxy or change your vote at any time before
the closing of the polls at the special meeting. If you are a shareholder of record at the record date (the close of business
on [&nbsp;&nbsp; ], 2020), you can revoke your proxy or change your vote by:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>sending a signed notice stating that you revoke your
                                         proxy to [&nbsp;&nbsp; ] that bears a date later than the date of the proxy you want
                                         to revoke and is received prior to the special meeting;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0"></P>

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<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>submitting a valid, later-dated proxy via the Internet
                                         or by telephone before 11:59 p.m. (Eastern Time) on [&nbsp;&nbsp; ], 2020, or by mail
                                         that is received prior to the special meeting; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>attending the special meeting (or, if the special meeting
                                         is adjourned or postponed, attending the adjourned or postponed meeting) and voting in
                                         person, which automatically will cancel any proxy previously given, or revoking your
                                         proxy in person, but your attendance alone will not revoke any proxy previously given.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If you hold your shares in &ldquo;street name&rdquo; through
a broker, bank or other nominee holder of record, you must contact your brokerage firm, bank or other nominee holder of record
to change your vote or obtain a written legal proxy to vote your shares if you wish to cast your vote in person at the special
meeting.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_052"></A>Solicitation of Proxies; Expenses
of Solicitation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This proxy statement/prospectus is being provided to holders
of our common shares in connection with the solicitation of proxies by our board of directors to be voted at the special meeting
and at any adjournments or postponements of the special meeting. We will bear all costs and expenses in connection with the solicitation
of proxies, including the costs of filing, printing and mailing this proxy statement/prospectus for the special meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition to solicitation by mail, directors, officers and
employees of the Company or its subsidiaries may solicit proxies from shareholders by telephone, email, personal interview or
other means. We currently do not expect to incur any costs beyond those customarily expended for a solicitation of proxies. Our
directors, officers and employees will not receive additional compensation for their solicitation activities but may be reimbursed
for reasonable out-of-pocket expenses incurred by them in connection with the solicitation. Brokers, dealers, commercial banks,
trust companies, fiduciaries, custodians and other nominees have been requested to forward proxy solicitation materials to their
customers, and such nominees will be reimbursed for their reasonable out-of-pocket expenses.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_053"></A>Householding</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Unless we have received contrary instructions, we may send
a single copy of this proxy statement/prospectus and notice to any household at which two or more shareholders reside if we believe
the shareholders are members of the same family. Each shareholder in the household will continue to receive a separate proxy card.
This process, known as &ldquo;householding,&rdquo; reduces the volume of duplicate information received at your household and
helps to reduce our expenses.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_054"></A>Adjournment</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Shareholders are being asked to approve a proposal that
will give our board of directors authority to adjourn the special meeting one or more times for the purpose of soliciting
additional proxies in favor of the merger proposal, the disposition proposal, the redesignation proposal, the share
combination proposal, the share increase proposal, the name change proposal, or the charter amendment proposal if there are
not sufficient votes at the time of the special meeting to approve such proposals. If the adjournment proposal is approved,
the special meeting could be adjourned to any date. In addition, our board of directors, with or without shareholder
approval, could postpone the meeting before it commences, whether for the purpose of soliciting additional proxies or for
other reasons. If the special meeting is adjourned for the purpose of soliciting additional proxies, shareholders who have
already submitted their proxies will be able to revoke them at any time prior to their use.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_055"></A>Other Information</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The matters to be considered at the special meeting are of
great importance to our shareholders. Accordingly, you are urged to read and carefully consider the information contained in this
proxy statement/prospectus and submit your proxy via the Internet or by telephone or complete, date, sign and promptly return
the enclosed proxy card in the enclosed postage-paid envelope. <B>If you submit your proxy via the Internet or by telephone, you
do not need to return the enclosed proxy card. </B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_056"></A>Assistance</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If you need assistance in completing your proxy card or have
questions regarding the special meeting, please contact:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Lianluo Smart Limited</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Room 611, 6th Floor, BeiKong Technology
Building</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">No. 10 Baifuquan Road, Changping District</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Beijing 102200</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">People&rsquo;s Republic of China</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Attention: Corporate Secretary</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Telephone: 86-10-89788107</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><A NAME="al_057"></A>PROPOSAL
I: THE MERGER</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_058"></A>General</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This proxy statement/prospectus is being provided to shareholders
in connection with the solicitation of proxies by our board of directors to be voted at the special meeting and at any adjournments
or postponements of the special meeting. At the special meeting, we will ask shareholders to, among other things, adopt the merger
agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The merger agreement provides for the merger of Merger Sub
with and into Newegg, with Newegg continuing as the surviving corporation and a wholly owned subsidiary of the Company. <B>The
merger will not be completed unless shareholders adopt the merger agreement and approve the other matters to be considered at
the special meeting.</B> A copy of the merger agreement is attached as Annex A to this proxy statement/prospectus. You are urged
to read the merger agreement in its entirety because it is the legal document that governs the merger. For additional information
about the merger agreement, see &ldquo;The merger Agreement.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If the&nbsp;merger&nbsp;is completed, each share of the capital
stock of Newegg that was issued and outstanding immediately prior to the effective time of the&nbsp;merger will be converted into
the right to receive 5.8417 common shares of the Company (which we refer to as the exchange ratio), plus the right, if any, to receive
cash in lieu of fractional shares of the Company (which we collectively refer to as the merger consideration); provided that the
exchange ratio shall be appropriately adjusted to reflect the effect of any share split, split-up, reverse share split, share
dividend or distribution of securities convertible into the Company&rsquo;s common shares or Newegg&rsquo;s capital stock or any
reorganization, recapitalization, reclassification or other like change with respect to Company&rsquo;s common shares or Newegg&rsquo;s
capital stock having a record date occurring on or after the date of the merger agreement and prior to the completion of the merger.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_059"></A>Background of the Merger</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Around November 2019, management informally discussed the
Company&rsquo;s financial position and the challenges facing the Company&rsquo;s medical device business, including continued
decrease in revenue and the difficulties in meeting NASDAQ&rsquo;s continued listing standards (e.g., minimum bid price, stockholders&rsquo;
equity, market value and net income standards). Our management determined that our current medical device business was unlikely
to operate in a profitable manner and began to consider the proposal put forward by Mr. Zhitao He, our then Chairman, that we
acquire Newegg, a Delaware corporation controlled by Mr. He. Our management considered Newegg a favorable acquisition target,
based on a number of factors, including Newegg&rsquo;s business outlook, competitive position, potential for revenue growth, earnings
increase and cash flow generation and experience of its management.&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company commenced discussions regarding the merger around
late March 2020, after which time due diligence review and negotiations began.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> In consultation with legal counsel, we entered into a non-binding
letter of intent with Newegg on May 11, 2020. The material terms of this non-binding letter of intent are summarized as follows: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The Company would issue its shares to all
Newegg&rsquo;s shareholders in exchange for their equity interests in Newegg based on the proposed valuation of Newegg
ranging from $750 million to $950 million or an amount as otherwise agreed by both parties. The Company and Newegg proposed
that the consummation of the proposed transaction would be subject to approval by special committee of the board of directors
of Company and the board of directors of Newegg, completion of an audit of Newegg&rsquo;s financial statements of the last
two fiscal years, receipt of all governmental, regulatory and third party requisite approvals and consents, satisfactory
legal, financing and accounting due diligence by each party, receipt of a fairness opinion by a qualified independent firm
opining on the fairness of the consideration, simultaneous consummation of certain disposition of the existing medical device
and related business of the Company, simultaneous consummation of certain public offering conducted by the post-closing
entity, completion of a reverse split by the post-closing entity to satisfy the minimum bid price NASDAQ&rsquo;s approvals of
the initial listing application for the post-closing issuer and of the Listing of Additional Shares for the shares issued in
this transaction, increase of the Company&rsquo;s authorized amount of common shares to the extent sufficient to consummate
the transaction and other customary closing conditions.&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The Company and Newegg agreed to an exclusivity period from
the execution date of the letter of intent to the earlier of (i) 60 days from the execution, (ii) the time either party indicated
in writing that it no longer desired to pursue the transaction, or (iii) execution of a definitive agreement. The parties also
agreed on certain other terms, including confidentiality, governing law and jurisdiction, transaction costs and termination. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> On May 11, 2020, the Company&rsquo;s board resolved to form
a special committee consisting of our three independent directors, Richard Zhiqiang Chang, Bin Pan and Fuya Zheng, with Mr. Fuya
Zheng acting as the chairman, to consider, review, and evaluate the transaction, negotiate and structure the transaction under
the letter of intent, reject the proposed transaction, or as permitted by the letter of intent, consider any unsolicited acquisition
proposal that may be a superior proposal to that contemplated by the letter of intent as the special committee deemed to be in
the best interests of the Company and its shareholders. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> On or around May 11, 2020, the special committee retained
Benchmark as its financial advisor to render an opinion as to the fairness to the Company&rsquo;s shareholders of the consideration
to be paid by the Company for the acquisition of Newegg from a financial point of view.&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> In August 2020, Newegg provided the first draft of audited
financial statements for the fiscal years ended December 31, 2019, 2018 and 2017. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> On or around August 11, 2020, Mr. Zhitao He, then CEO of
LLIT, proposed that the exchange ratio should be the Newegg valuation of $880 million divided by a denominator equal to the volume-weighted
average trading price of LLIT Class A common shares for the consecutive twenty trading days immediately preceding the date of
the merger agreement multiplied by the number of LLIT Class A common shares and Class B common shares then issued and outstanding.
Both LLIT and Newegg considered the gross merchandise value and net sales of Newegg in their determination of the Newegg valuation. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0"> On or around August 26, 2020, following receipt of the Newegg draft
audited financial statements and draft of the financial projections, Benchmark provided a preliminary draft of its analysis
that indicated the estimated equity value of Newegg ranges from $687 million to $1.28 billion. </P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0"> On or around August 31, 2020, Newegg provided LLIT with updated
projections for the fiscal year ending December 31, 2020 to 2022. </P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0"> On or around September 1, 2020, Newegg counter
offered that the exchange ratio should take into consideration of the full exercise of LLIT&rsquo;s outstanding warrants exercisable
for an aggregate of 1,373,750 shares of LLIT Class A common shares issued to certain institutional investors in February and March
2020 (which we refer to as the 2020 warrants). </P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> On or around September 5, 2020, Mr. He accepted the
counteroffer. Both parties agreed that assuming LLIT reached an agreement with the holders of the 2020 warrants and the
warrant holders exercised all of these warrants, the exchange ratio should be the Newegg valuation of $880 million divided by
a denominator equal to the volume-weighted average trading price of LLIT Class A common shares for the consecutive twenty
trading days immediately preceding to the date of the merger agreement multiplied by the number of LLIT Class A common shares
and Class B common shares then issued and outstanding. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> On September 9, 2020, counsel for Newegg delivered an initial
draft of the merger agreement to the Company for review and from that date until execution of the merger agreement, the parties
negotiated the terms and conditions of the merger agreement and conducted their respective due diligence. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> On September 25, 2020, the Company delivered an initial
draft of the proxy statement/prospectus to Newegg for review and from that date until October 23, 2020, the parties reviewed drafts
of this proxy statement/prospectus and conducted their due diligence with respect to such drafts. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> On September 30, 2020, the special committee convened to
discuss a draft fairness opinion supporting financial analysis delivered by Benchmark. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> On or about September 30, 2020, the counsel to the special
committee of Newegg circulated a revised draft of the merger agreement which indicated that the exchange ratio would be equal
the Newegg per share value divided by the Company per share value. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Between the end of September 2020 and early October, LLIT
and Newegg agreed that since it might take a significant amount of time for LLIT to reach an agreement with the warrant holders
to settle the 2020 warrants and thus delay the process of the merger transaction, the exchange ratio should be revised so that
the estimated Black-Scholes value of the 2020 warrants would be deducted from LLIT&rsquo;s market capitalization. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> On October 23, 2020, Benchmark provided the fairness
opinion to the special committee indicating that, as of such date and based upon and subject to the assumptions, matters and
limitations set forth in its written opinion, the merger consideration to be paid by the Company was fair to the
Company&rsquo;s shareholders from a financial point of view. In addition, Benchmark also provided an updated supporting
financial analysis indicating the estimated equity value of Newegg ranged from as low as $978 million to as high as $1.93
billion based on the updated projections and latest financial information provided by Newegg and the latest pertinent market prices and data. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> On October 23, 2020, the Company&rsquo;s special committee
reviewed the fairness opinion delivered by Benchmark and recommended that the board to approve the merger agreement. Based on
the special committee&rsquo;s recommendation, on the same date, the board approved the execution of the merger agreement and the
submission of the merger agreement to shareholders for a vote. On October 23, 2020, the special committee of Newegg also recommended
Newegg&rsquo;s board to approve the merger agreement. Newegg&rsquo;s board, based on Newegg&rsquo;s special committee&rsquo;s
recommendation, approved the execution of the merger agreement on the same date. </P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On October 23, 2020, the merger agreement was executed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_060"></A>Reasons for the Merger</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The special committee, by a unanimous vote on October 23,
2020, determined that the merger agreement and the proposed merger contemplated thereby are advisable and fair to, and in the
best interests of, the Company. At this meeting, the special committee recommended that the board approve, authorize and
adopt the merger agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In evaluating the merger, the special committee, in consultation
with the Company&rsquo;s management, outside legal counsel and financial advisor, considered numerous positive factors relating
to the merger, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>challenges facing the Company&rsquo;s current medical
                                         device business, including a history of significant operating losses and negative operating
                                         cash flows;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>challenges facing the Company in maintaining its competitive
                                         position in the highly competitive medical device market in China;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>challenges facing the Company regarding compliance with
                                         NASDAQ Listing Rules, including the minimum bid price and stockholders&rsquo; equity
                                         requirements;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the belief that other strategic alternatives available
                                         to the Company, such as continuing to develop its business through internal growth, were
                                         less advisable than the proposed merger under current circumstances;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the terms and conditions of the merger agreement and
                                         related transaction documents;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the positive financial condition, operating results and
                                         business outlook of Newegg as of the date of this proxy statement/prospectus; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the fact that the special committee received and reviewed
                                         a fairness opinion from Benchmark affirming that the merger consideration to be paid
                                         by the Company was fair to the Company&rsquo;s shareholders from a financial point of
                                         view.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The special committee also considered the risks and potentially
negative factors relating to the proposed merger, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the possibility that the consummation of the merger may
                                         be delayed or not occur at all, and the adverse impact of such event would have on the
                                         Company and its business;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the significant costs involved in connection with completing
                                         the proposed merger, the substantial management time and effort required to complete
                                         the proposed merger and the related disruption to operations of the Company;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the potential liabilities that the Company may inherit
                                         from Newegg as a result of the proposed merger that would not be covered by the indemnities
                                         in the merger agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the risk that the anticipated benefits of the proposed
                                         merger may not be realized; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>other risks described under the section &ldquo;Risk Factors&rdquo;
                                         above.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The special committee believed that, overall, the potential
benefits of the merger to the Company&rsquo;s shareholders outweighed the risks and uncertainties of the merger. The foregoing
discussion of factors considered by the special committee is not intended to be exhaustive and is not provided in any specific
order or ranking, but includes material factors considered by the special committee. In reaching its decision regarding the proposed
merger, the special committee did not quantify or otherwise assign relative weights to the specific factors. Moreover, each member
of the special committee applied his own personal business judgment and may have given different weights to different factors.
The special committee did not undertake to make any specific determination as to whether any factor, or any particular aspect
of any factor, supported or did not support its ultimate determination. The special committee based its recommendation on the
totality of the information presented.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_061"></A>Reports, Opinions and Appraisals</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The Company engaged Benchmark to render an opinion as to
whether the merger consideration&nbsp;to be paid by the Company is fair to the Company&rsquo;s shareholders from a financial point
of view. Benchmark is an investment bank that regularly evaluates businesses and their securities in connection with acquisitions,
corporate restructuring and financings. On August 13, 2020, Lianluo Connection entered into a share transfer agreement with China
Mine United Investment Group Co., Ltd., or China Mine, pursuant to which Lianluo Connection transferred its 100% equity interests
in its then wholly-owned PRC subsidiary, Beijing Dehaier Medical Technology Company Limited, or Beijing Dehaier, to China Mine
for cash consideration of RMB 0. Benchmark, acting as the independent financial advisor to our board, provided a written opinion
that the consideration to be received by the Company in the sale of Beijing Dehaier is fair to the Company&rsquo;s shareholders
from a financial point of view. We paid a cash fee of $25,000 to Benchmark for the opinion. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The special committee engaged Benchmark as its
financial advisor in connection with the merger as the Company determined that Benchmark has substantial experience in
similar matters. Benchmark rendered its written opinion to the special committee on October 23, 2020 that merger
consideration to be paid by the Company was fair to the Company&rsquo;s shareholders from a financial point of
view.&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman,serif; margin: 0 0 10pt">The Company paid an aggregate cash fee of $165,000 to Benchmark for
its opinion. The Company provided to Benchmark a financial model of Newegg with projected income statement data for the fiscal
years 2020-2022. The Company has obtained consent from Benchmark for the use of its fairness opinions in this proxy statement/prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Benchmark&rsquo;s opinion was provided to the special committee
and the board for their assessment of the merger and only addressed the fairness to the Company&rsquo;s shareholders, from a financial
point of view, of the merger consideration to be paid by the Company pursuant to the merger agreement as of the date of the opinion
and did not address any other aspects or implications of the merger.&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>The summary of Benchmark&rsquo;s opinion below is qualified
in its entirety by reference to the full text of the written opinion, which is included as Annex D to this proxy statement/prospectus.
This summary also describes the procedures, assumptions, qualifications and limitations, and other matters considered by Benchmark
in preparing its opinion. However, neither Benchmark&rsquo;s written opinion nor the summary of its opinion set forth in this
proxy statement/prospectus purports to be, or constitutes advice or recommendations to, any shareholder as to how such shareholder
should act or vote with respect to the merger proposal.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In arriving at its opinion, Benchmark reviewed and considered
such financial and other matters as it deemed relevant, including, among other things:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the latest draft of the merger agreement provided to
                                         it on October 22<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">,
                                         </FONT>2020;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>certain information relating to the historical, current and future operations, financial condition and prospects of Newegg,
made available to it by the Company, including financial statements that included the actual income statements for the year ending
December 31, 2019 and the nine months ending September 30, 2020, a balance sheet as of September 30, 2020, and a financial model
with projected income statements for the calendar years 2020-2022;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>discussions with certain members of the management of
                                         the Company and certain of its advisors and representatives regarding the business, operations,
                                         financial condition and prospects of the Company, the Transaction and related matters;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>a certificate addressed to us from senior management
                                         of the Company which contains, among other things, representations regarding the accuracy
                                         of the information, data and other materials (financial or otherwise) provided to, or
                                         discussed with, us by or on behalf of the Company;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the current and historical market prices for certain
                                         of the Company&rsquo;s publicly traded securities, and the current and historical market
                                         prices, trading characteristics and financial performance of the publicly traded securities
                                         of certain other companies that we deemed to be relevant;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the publicly available financial terms of certain transactions
                                         that we deemed to be relevant; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>such other information, economic and market criteria
                                         and data, financial studies, analyses and investigations and such other factors as Benchmark
                                         deemed relevant.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Benchmark has relied upon and assumed, without independent
verification, the accuracy and completeness of all data, material and other information furnished, or otherwise made available,
to it, discussed with or reviewed by it, or publicly available, and do not assume any responsibility with respect to such data,
material and other information. In addition, management of the Company has advised Benchmark, and Benchmark has assumed, that
the financial projections reviewed by it have been reasonably prepared in good faith on bases reflecting the best currently available
estimates and judgments of such management as to the future financial results and condition of the Company or Newegg and Benchmark
expresses no opinion with respect to such projections or the assumptions on which they are based. Benchmark has relied upon and
assumed, without independent verification, that there has been no change in the business, assets, liabilities, financial condition,
results of operations, cash flows or prospects of the Company or Newegg since the respective dates of the most recent financial
statements and other information, financial or otherwise, provided to it that would be material to its analyses or the opinion,
and that there is no information or any facts that would make any of the information reviewed by Benchmark incomplete or misleading.
Benchmark has further relied upon the assurance of the management of the Company that they are unaware of any facts that would
make the information provided to Benchmark incomplete or misleading in any material respect. In connection with its review and
arriving at its opinion, Benchmark did not assume any responsibility for the independent verification of any of the foregoing
information and relied on the completeness and accuracy as represented by the Company. In addition, Benchmark has relied upon
and assumed, without independent verification, that the final form of the merger agreement will not differ in any material respect
from the latest draft of the merger agreement provided to it as identified above. In addition, Benchmark did not make any independent
evaluation or appraisal of the assets or liabilities of the Company or Newegg nor was Benchmark furnished with any such independent
evaluations or appraisals. The opinion is necessarily based upon financial, economic, market and other conditions as they existed
on, and should be evaluated as of, the date thereof. Although subsequent developments might affect the opinion, Benchmark does
not have any obligation to update, revise or reaffirm its opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Benchmark has assumed that the merger will be consummated on
terms substantially similar to those set forth in the merger agreement identified above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Benchmark has not been requested to opine as to, and the opinion
does not express an opinion as to or otherwise address, among other things: (1) the underlying business decision of the board,
the Company, its security holders or any other party to proceed with or effect the merger, (ii) the terms of any arrangements,
understandings, agreements or documents related to, or the form, structure or any other portion or aspect of, the merger or otherwise
(other than the consideration to the extent expressly specified herein), (iii) the fairness of any portion or aspect of the merger
to the holders of any class of securities, creditors or other constituencies of the Company, or to any other party, except if
and only to the extent expressly set forth in the last sentence of this opinion, (iv) the relative merits of the merger as compared
to any alternative business strategies or transactions that might be available for the Company, Newegg or any other party, (v)
the fairness of any portion or aspect of the merger to any one class or group of the Company&rsquo;s or any other party&rsquo;s
security holders or other constituents vis-&agrave;-vis any other class or group of the Company&rsquo;s or such other party&rsquo;s
security holders or other constituents (including, without limitation, the allocation of any consideration amongst or within such
classes or groups of security holders or other constituents), (vi) the solvency, creditworthiness or fair value of Newegg, the
Company or any other participant in the merger, or any of their respective assets, under any applicable laws relating to bankruptcy,
insolvency, fraudulent conveyance or similar matters, or (vii) the fairness, financial or otherwise, of the amount, nature or
any other aspect of any compensation to or consideration payable to or received by any officers, directors or employees of any
party to the merger, any class of such persons or any other party, relative to the consideration or otherwise. Furthermore, no
opinion, counsel or interpretation is intended in matters that require legal, regulatory, accounting, insurance, tax or other
similar professional advice. It is assumed that such opinions, counsel or interpretations have been or will be obtained from the
appropriate professional sources. Furthermore, we have relied, with the consent of the board, on the assessments by the board,
the Company and its advisors, as to all legal, regulatory, accounting, insurance and tax matters with respect to Newegg, the Company,
the merger or otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In the ordinary course of its business, Benchmark may have
actively traded the equity or debt securities of the Company and may continue to actively trade such equity or debt securities.
In addition, certain individuals who are employees of, or are affiliated with, Benchmark may have in the past and may currently
be shareholders of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Summary of Financial Analysis</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following is a summary of the analyses performed by Benchmark
in connection with its opinion. The analyses and factors described below must be considered as a whole; considering any portion
of such analyses or factors, without considering all analyses and factors, could create a misleading or incomplete view of the
process underlying Benchmark&rsquo;s opinion. Some of the summaries of the financial analyses include information presented in
tabular format. The tables are not intended to stand alone, and in order to more fully understand the financial analyses used
by Benchmark, the tables must be read together with the full text of each summary. Considering the data set forth below without
considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the
analyses, could create a misleading or incomplete view of Benchmark&rsquo;s financial analyses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Benchmark completed a series of financial analyses to derive
a range of potential equity values for Newegg and calculated the value of the implied post-merger stake of the Company&rsquo;s
shareholders. Benchmark&rsquo;s financial analysis employed three methodologies, with no particular weight given to any:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font-size: 10pt; vertical-align: top">
<TD STYLE="font-size: 10pt; width: 0.25in"></TD><TD STYLE="font-size: 10pt; width: 0.25in">&#9679;</TD><TD STYLE="font-size: 10pt">selected public company analysis;</TD></TR></TABLE>

<P STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font-size: 10pt; vertical-align: top">
<TD STYLE="font-size: 10pt; width: 0.25in"></TD><TD STYLE="font-size: 10pt; width: 0.25in">&#9679;</TD><TD STYLE="font-size: 10pt">precedent transaction analysis; and</TD></TR></TABLE>

<P STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font-size: 10pt; vertical-align: top">
<TD STYLE="font-size: 10pt; width: 0.25in"></TD><TD STYLE="font-size: 10pt; width: 0.25in">&#9679;</TD><TD STYLE="font-size: 10pt">discounted cash flow analysis.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I><U>Valuation Summary</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Based on its analysis, the estimated equity value of Newegg
ranges from as low as $978 million to as high as $1.93 billion. This range is based on the following, among other factors:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font-size: 10pt; vertical-align: top">
<TD STYLE="font-size: 10pt; width: 0.25in"></TD><TD STYLE="font-size: 10pt; width: 0.25in">&#9679;</TD><TD STYLE="font-size: 10pt">The comparative values of tech-focused e-commerce and
                                         retail companies</TD></TR></TABLE>

<P STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font-size: 10pt; vertical-align: top">
<TD STYLE="font-size: 10pt; width: 0.25in"></TD><TD STYLE="font-size: 10pt; width: 0.25in">&#9679;</TD><TD STYLE="font-size: 10pt">The comparative values of recent e-commerce M&amp;A transactions</TD></TR></TABLE>

<P STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font-size: 10pt; vertical-align: top">
<TD STYLE="font-size: 10pt; width: 0.25in"></TD><TD STYLE="font-size: 10pt; width: 0.25in">&#9679;</TD><TD STYLE="font-size: 10pt">Newegg&rsquo;s net sales of approximately $2.04 billion in 2020 and $2.25 billion forecast in 2021</TD></TR></TABLE>

<P STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font-size: 10pt; vertical-align: top">
<TD STYLE="font-size: 10pt; width: 0.25in"></TD><TD STYLE="font-size: 10pt; width: 0.25in">&#9679;</TD><TD STYLE="font-size: 10pt">The results of the Selected Public Company Analysis,
                                         Precedent Transaction Analysis, and Discounted Cash Flow Analysis</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Estimated Value of Newegg Equity</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; border-bottom: Black 1.5pt solid">Valuation Methodology</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Range</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Selected Public Company Analysis</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,806,572,150</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,928,729,510</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Precedent Transaction Analysis</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,625,558,893</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,897,533,830</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Discounted Cash Flow Analysis</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">978,343,709</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,673,769,939</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Range</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">978,343,709</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,928,729,510</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The current value of the Company shareholders&rsquo; equity
stake is $12.2 million based on the Company 20-day VWAP. After adjusting for the escrow amount, this is expected to result in Company
shareholders maintaining a post-merger ownership stake of approximately 0.98% of the combined entity.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">The implied
value of a 0.98 stake is estimated to be between $8.8 million and $18.1 million based on Newegg&rsquo;s valuation range</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: justify"></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="11" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Range</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: justify">Company Shareholders Equity Stake Pre- and Post- Merger</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">30-day Low</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">20-day VWAP (10/16/20)</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">30-day High</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: justify">Pre-Merger</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: justify">Company Shares Outstanding (Class A and Class B)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">3,599,573</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">3,599,573</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">3,599,573</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Stock Price (9/23/20 - 10/22/20)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.3500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.4243</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.5200</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Stock Price (Split-adjusted Equivalent)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.8000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3.3944</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4.1600</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Company Total Equity Value Pre-Combination</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">10,078,804</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">12,218,391</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">14,974,224</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify">Post-Merger</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Escrow Amount</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3,500,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Company Equity Value</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">8,718,391</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Company Per Share Value</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.4221</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Newegg Equity Value for Share Exchange</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">880,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Newegg Shares Outstanding</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">62,195,173</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Newegg Per Share Value</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">14.1490</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Company Conversion Ratio</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.8417</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Merger Consideration to Newegg (Company Shares)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">363,325,542</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Company Shareholders Post-Merger Stake (%)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.98</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Company Shareholders Implied Value of Post-Merger Stake</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: justify">At High End of Newegg Valuation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">18,921,034</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: justify">At Low End of Newegg Valuation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">9,597,652</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Transaction-related Expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">800,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Company Shareholders Implied Net Equity Value Post-Merger</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: justify">Net Value at High End of Newegg Valuation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">18,121,034</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: justify">Net Value at Low End of Newegg Valuation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">8,797,652</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Selected Public Company Analysis</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Benchmark analyzed the valuation of publicly-listed tech-focused
e-commerce and retail companies. Its analysis of Newegg&rsquo;s valuation included the following four companies, none of which
is identical to Newegg: Best Buy, CDW, Dell and HP.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 2020 </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 2021 </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left"> Selected Public Companies&rsquo; Average EV/Revenue </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; text-align: right"> 0.84 </TD><TD STYLE="width: 1%; text-align: left"> x </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; text-align: right"> 0.82 </TD><TD STYLE="width: 1%; text-align: left"> x </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Newegg Revenue </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 2,037,261,787 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 2,249,715,499 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left"> Enterprise Value </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 1,713,801,150 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 1,835,958,510 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-style: italic; text-align: left"> Plus </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Net Cash/(Debt), Other Adjustments </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 92,771,000 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 92,771,000 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt"> Equity Value </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> 1,806,572,150 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> 1,928,729,510 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>Source: FactSet; the Company</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The individual EV/Revenue calculations
for each of the selected public companies are as follows: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: justify"> Company Name </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"> EV/Revenue<BR>
    (2020) </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"> EV/Revenue<BR>
    (2021) </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: justify"> Best Buy </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; text-align: right"> 0.65 </TD><TD STYLE="width: 1%; text-align: left"> x </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.66</FONT> </TD><TD STYLE="width: 1%; text-align: left"> xx </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> CDW </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.20 </TD><TD STYLE="text-align: left"> x </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.14</FONT> </TD><TD STYLE="text-align: left"> xx </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> Dell Technologies Corp. </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.99 </TD><TD STYLE="text-align: left"> x </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.92</FONT> </TD><TD STYLE="text-align: left"> xx </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> HP </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.51 </TD><TD STYLE="text-align: left"> x </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0.55</FONT> </TD><TD STYLE="text-align: left"> xx </TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Precedent Transaction Analysis</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Benchmark analyzed the valuation of M&amp;A transactions completed
over the last five years involving e-commerce marketplace companies. Benchmark&rsquo;s analysis included the following four precedent
transactions, none of which is identical to Newegg: HSN, Inc.; Millennial Media, Inc.; RetailMeNot, Inc.; The Bon-Ton Stores,
Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 2020 </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 2021 </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left"> Precedent Transactions&rsquo; Average and Median EV/Revenue </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; text-align: right"> 0.75 </TD><TD STYLE="width: 1%; text-align: left"> x </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; text-align: right"> 0.80 </TD><TD STYLE="width: 1%; text-align: left"> x </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Newegg Revenue </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 2,037,261,787 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 2,249,715,499 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left"> Enterprise Value </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 1,532,787,893 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 1,804,762,830 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-style: italic; text-align: left"> Plus </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Net Cash/(Debt), Other Adjustments </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 92,771,000 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 92,771,000 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt"> Equity Value </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> 1,625,558,893 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> 1,897,533,830 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>Source: FactSet; the Company</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The individual EV/Revenue calculations
for each of the selected precedent transactions are as follows: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: justify"> Company Name </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> EV/Revenue </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%; text-align: justify"> HSN, Inc. </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; text-align: right"> 0.73 </TD><TD STYLE="width: 1%; text-align: left"> x </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> Millennial Media, Inc. </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> </TD><TD STYLE="text-align: right"> 0.77 </TD><TD STYLE="text-align: left"> x </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> RetailMeNot, Inc. </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> </TD><TD STYLE="text-align: right"> 1.34 </TD><TD STYLE="text-align: left"> x </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> The Bon-Ton Stores, Inc. </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.37 </TD><TD STYLE="text-align: left"> x </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Generally, the enterprise value is
calculated based on the value as of a specified date of the relevant company&rsquo;s outstanding equity securities, plus the amount
of its net debt (the amount of its outstanding indebtedness, non-convertible preferred stock, capital lease obligations and non-controlling
interests less the amount of cash and cash equivalents on its balance sheet). </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Discounted Cash Flow Analysis</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Benchmark used a 3-year forecast model for Newegg (2020-2022)
to estimate a range of equity values based on a discounted cash flow analysis of free cash flows projections as provided by the
Company and Newegg. The key assumptions in its analysis include the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>Newegg net sales growing from $2.0 billion in 2020, $2.2 billion in 2021 and $2.5 billion in 2022;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>Discount rates (WACC or Weighted-Average Cost of Capital) ranging from 17.4% to 21.4%</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>Terminal value multiplies of 0.52x to 0.88x net revenue</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B>Projected income statements of Newegg for the periods
indicated below: </B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1.5pt solid"> Income Statement Projections (Newegg) </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> Q4 2020 </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 12/31/2021 </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 12/31/2022 </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-weight: bold; text-align: left"> Net Sales </TD><TD STYLE="width: 1%; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left"> $ </TD><TD STYLE="width: 9%; font-weight: bold; text-align: right"> 715,823,814 </TD><TD STYLE="width: 1%; font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left"> $ </TD><TD STYLE="width: 9%; font-weight: bold; text-align: right"> 2,249,715,499 </TD><TD STYLE="width: 1%; font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left"> $ </TD><TD STYLE="width: 9%; font-weight: bold; text-align: right"> 2,489,003,013 </TD><TD STYLE="width: 1%; font-weight: bold; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> COGS </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 640,113,345 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 1,950,700,005 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 2,147,465,955 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left"> Gross Margin </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> $ </TD><TD STYLE="font-weight: bold; text-align: right"> 75,710,469 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> $ </TD><TD STYLE="font-weight: bold; text-align: right"> 299,015,494 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> $ </TD><TD STYLE="font-weight: bold; text-align: right"> 341,537,058 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> SG&amp;A </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 70,323,322 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 260,908,584 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 298,025,144 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left"> Operating Profit </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> $ </TD><TD STYLE="font-weight: bold; text-align: right"> 5,387,147 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> $ </TD><TD STYLE="font-weight: bold; text-align: right"> 38,106,910 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> $ </TD><TD STYLE="font-weight: bold; text-align: right"> 43,511,914 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Non-operating Income (Expenses) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold"> EBITDA </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> $ </TD><TD STYLE="font-weight: bold; text-align: right"> 5,387,147 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> $ </TD><TD STYLE="font-weight: bold; text-align: right"> 38,106,910 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> $ </TD><TD STYLE="font-weight: bold; text-align: right"> 43,511,914 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Depreciation and Amortization </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 1,956,117 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 8,462,541 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 8,208,665 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Interest Expense (Income) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 22,241 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> (104,459 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> (75,733 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Stock Comp </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 186,349 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 450,968 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 428,420 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Provision for Income Taxes </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> (64,274 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 2,486,115 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 2,838,741 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left"> Net Income </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> $ </TD><TD STYLE="font-weight: bold; text-align: right"> 3,286,713 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> $ </TD><TD STYLE="font-weight: bold; text-align: right"> 26,811,745 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> $ </TD><TD STYLE="font-weight: bold; text-align: right"> 32,111,822 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The above projected income statements were made based on
the following material assumptions: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom"><TD> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"> Fiscal&nbsp;year </TD><TD STYLE="font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"> Fiscal&nbsp;year </TD><TD STYLE="font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; font-style: italic; border-bottom: Black 1.5pt solid"> GMV ($ in millions) </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 2021 </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 2022 </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font-style: italic; text-align: left"> Direct Sales </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 9%; text-align: right"> 2,045.7 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 9%; text-align: right"> 2,235.0 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-style: italic"> Marketplace </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 916.7 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 1,191.7 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-style: italic"> Others </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 126.5 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 155.0 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; font-style: italic; text-align: left"> Gross Margin </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-style: italic; text-align: left"> Direct Sales </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 10.0 </TD><TD STYLE="text-align: left"> % </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 10.0 </TD><TD STYLE="text-align: left"> % </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-style: italic"> Marketplace </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 8.5 </TD><TD STYLE="text-align: left"> % </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 8.3 </TD><TD STYLE="text-align: left"> % </TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="30" STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-size: 10pt"><B>Net Present Value Analysis &ndash; Terminal Value Multiple 0.52x</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Discount Rate</B></FONT></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Enterprise Value</B></FONT></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Cash/(Net Debt)</B></FONT></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Due from Affiliate</B></FONT></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: black 1.5pt solid"><B>Working<BR> Capital<BR> Surplus/(Deficit)</B></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Preferred Stock</B></FONT></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: black 1.5pt solid"><B>Equity<BR> Investments<BR> (Mountain/</B><BR> <B>Bitmain)</B></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Equity Value</B></FONT></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 10pt">17.4</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 10pt">953,862,315</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 10pt">76,050,000</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 10pt">21,867,000</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 10pt">(26,542,000</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">(61,000</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">21,457,000</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">1,046,633,315</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white; text-align: right"><FONT STYLE="font-size: 10pt">18.4</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white; text-align: right"><FONT STYLE="font-size: 10pt">936,087,652</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF; text-align: right"><FONT STYLE="font-size: 10pt">76,050,000</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: top; background-color: white; text-align: right"><FONT STYLE="font-size: 10pt">21,867,000</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: top; background-color: white; text-align: right"><FONT STYLE="font-size: 10pt">(26,542,000</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white; text-align: right"><FONT STYLE="font-size: 10pt">(61,000</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white; text-align: right"><FONT STYLE="font-size: 10pt">21,457,000</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white; text-align: right"><FONT STYLE="font-size: 10pt">1,028,858,652</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">19.4</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">918,792,239</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">76,050,000</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">21,867,000</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">(26,542,000</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(61,000</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">21,457,000</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">1,011,563,239</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white; text-align: right"><FONT STYLE="font-size: 10pt">20.4</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white; text-align: right"><FONT STYLE="font-size: 10pt">901,959,282</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: #CCEEFF; text-align: right"><FONT STYLE="font-size: 10pt">76,050,000</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: top; background-color: white; text-align: right"><FONT STYLE="font-size: 10pt">21,867,000</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: top; background-color: white; text-align: right"><FONT STYLE="font-size: 10pt">(26,542,000</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white; text-align: right"><FONT STYLE="font-size: 10pt">(61,000</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white; text-align: right"><FONT STYLE="font-size: 10pt">21,457,000</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; background-color: white"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white; text-align: right"><FONT STYLE="font-size: 10pt">994,730,282</FONT></TD>
    <TD STYLE="vertical-align: bottom; background-color: white">&nbsp;</TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">21.4</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">885,572,709</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">76,050,000</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">21,867,000</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">(26,542,000</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(61,000</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">21,457,000</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">978,343,709</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="30" STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-size: 10pt"><B>Net Present Value Analysis &ndash; Terminal Value Multiple 0.88x</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Discount Rate</B></FONT></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Enterprise Value</B></FONT></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Net Debt</B></FONT></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Due from Affiliate</B></FONT></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: black 1.5pt solid"><B>Working Capital Surplus/
    (Deficit)</B></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Preferred Stock</B></FONT></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: black 1.5pt solid"><B>Equity<BR> Investments<BR> (Mountain/</B><BR> <B>Bitmain)</B></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Equity Value</B></FONT></TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 10pt">17.4</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 10pt">1,580,998,939</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 10pt">76,050,000</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 10pt">21,867,000</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 10pt">(26,542,000</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">(61,000</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">21,457,000</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">1,673,769,939</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">18.4</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">1,551,360,634</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">76,050,000</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">21,867,000</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">(26,542,000</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(61,000</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">21,457,000</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">1,644,131,634</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">19.4</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">1,522,522,958</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">76,050,000</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">21,867,000</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">(26,542,000</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(61,000</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">21,457,000</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">1,615,293,958</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">20.4</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">1,494,457,827</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">76,050,000</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">21,867,000</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">(26,542,000</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(61,000</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">21,457,000</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">1,587,228,827</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">21.4</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">1,467,138,367</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">76,050,000</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">21,867,000</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">(26,542,000</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">(61,000</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">21,457,000</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">1,559,909,367</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_062"></A>Ownership of Common Shares After
the Merger</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> We estimate that we may issue approximately 363,325,542
common shares to Newegg stockholders upon completion of the merger, based on the number of shares of Newegg issued and outstanding
as of December 22, 2020, the most recent practicable date for which such information was available. Based on the number of our
common shares and Newegg stock outstanding as of such date, immediately following the completion of merger, our shareholders immediately
prior to the merger are expected to own approximately 0.98% of our outstanding common shares and former Newegg stockholders are
expected to own approximately 99.02% of our outstanding common shares (on a fully-diluted basis). </P>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> In addition, Mr. Zhitao He and Mr. Fred Chang will own approximately
61.16% and 36.11%, respectively, of the voting power of our issued and outstanding common shares, and 97.26%, collectively. Moreover,
Mr. Zhitao He and Mr. Fred Chang, both of whom will serve as our directors upon closing, will be able to exercise substantial
influence over our business and operations. They may also have a conflict of interests with the minority shareholders. Where those
conflicts exist, the minority shareholders will be dependent upon Mr. He, Mr. Chang, and other directors exercising, in a manner
fair to all of our shareholders, their fiduciary duties. Also, Mr. He and Mr. Chang will have the ability to control the outcome
of most corporate actions requiring shareholder approval, including the sale of all or substantially all of our assets and amendments
to our Memorandum and Articles of Association. Moreover, such concentration of voting power could have the effect of delaying,
deterring, or preventing a change of control or other business combination, which may, in turn, have an adverse effect on the
market price of our shares or prevent our minority shareholders from realizing a premium over the then-prevailing market price
for their shares.&nbsp; </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_063"></A>Effect on the Company if the Merger
is Not Completed</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If the merger is not approved by the shareholders or if the
merger is not completed for any other reason, the Company will remain a public company, and our Class A common shares will continue
to be listed and traded on NASDAQ (assuming the Company meets all of NASDAQ&rsquo;s continued listing standards). In addition,
our management expects that the business will be operated as how it is currently being operated until we pursue another strategic
alternative, and that our shareholders will continue to be subject to the same risks and opportunities to which they are currently
subject.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Furthermore, if the merger is not completed, and depending
on the circumstances that would have caused the merger not to be completed, the price of the Company&rsquo;s Class A common shares
may decline. If that were to occur, it is uncertain when, if ever, the price of the Company&rsquo;s Class A common shares would
return to the price at which it trades as of the date of this proxy statement/prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Accordingly, if the merger is not completed, there can be no
assurance as to the effect of these risks and opportunities on the future value of your Class A common shares. If the merger is
not completed, the board will continue to evaluate and review the Company&rsquo;s business operations, properties, dividend policy
and capitalization, among other things, make such changes as deemed appropriate and continue to seek to identify strategic alternatives
to enhance shareholder value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, under specified circumstances, the Company may
be required to reimburse Newegg&rsquo;s expenses or pay Newegg a termination fee, upon the termination of the merger agreement,
as described under &ldquo;The Merger Agreement&mdash;Termination Fees and Expenses&rdquo; below.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_064"></A>Interests of Directors, Executive
Officers and Major Shareholders in the Merger&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In considering the recommendations of the special committee
and the board to vote for the merger proposal, you should be aware that certain of the current directors, executive officers and
major shareholders of the Company and Newegg have interests in the merger that may be different from, or in addition to, the interests
of our unaffiliated shareholders generally and may create potential conflicts of interest. These interests are described in more
detail below. The special committee was aware of each of these interests in reviewing, considering and negotiating the terms of
the proposed merger and in recommending to the entire board to pursue the proposed merger. The board was also aware of these interests
in approving the merger agreement and the transactions thereby and in recommending the approval of the merger agreement to our
shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Mr.&nbsp;Zhitao He, our former Chairman and Chief Executive
Officer, who also controls approximately 86.6% of our total voting power, also serves on the board of Newegg and, through Digital
Grid, beneficially owns a majority of the equity interests in Newegg. Ms. Yingmei Yang, our Interim Chief Financial Officer and
one of directors, also serves on the board of Newegg.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The merger agreement provides that all of Newegg&rsquo;s shareholders,
including Digital Grid, will receive common shares. Following the merger, Mr. Zhitao He will beneficially own approximately 224,269,418
common shares, representing approximately 61.12% of our total voting power.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_065"></A>Regulatory Approvals Required for
the Merger</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1pt">The consummation of the merger is not subject to any
regulatory or governmental approvals or filings, other than (i) the filing of a certificate of merger with the Secretary of State
of the State of Delaware and (ii) the declaration by the SEC of the effectiveness of the registration statement of which this
proxy statement/prospectus forms a part, and any required notice or other filings under applicable state securities laws.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_066"></A>Listing on NASDAQ</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1pt">The approval for listing of our common shares on the
NASDAQ Capital Market, including the shares issued in the merger, subject only to official notice of issuance, is a condition
to the obligations of Newegg to complete the&nbsp;merger. We have applied for such listing under the symbol &ldquo;NEGG.&rdquo;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Material U.S. Federal Income Tax Consequences of the
Merger </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <I>&nbsp;</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <I>The following discussion sets forth the material U.S.
federal income tax consequences of the merger to the U.S. holders of Newegg common stock. This discussion is based upon provisions
of the Code, U.S. Treasury Regulations, and administrative rulings and court decisions, all as in effect or in existence on the
date of this proxy statement/prospectus and all of which are subject to change or differing interpretations by the IRS or a court,
possibly with retroactive effect. Changes in these authorities may cause the tax consequences of the merger to vary substantially
from the consequences described below. An opinion from Potomac Law Group has been requested by us and is attached to this prospectus
as Exhibit 8.1. The opinion of counsel will be based upon and rely on, among other things, various facts and assumptions, as well
as certain representations, statements and undertakings of us and Newegg.</I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> This discussion addresses only those U.S. holders (as defined
below) of Newegg common stock that hold such stock as a capital asset within the meaning of Section&nbsp;1221 of the Code (generally,
property held for investment), and does not address all the United States federal income tax consequences that may be relevant
to Newegg or to any U.S. holders of Newegg stock in light of their individual circumstances such as (i)&nbsp;beneficial owners
of Newegg stock subject to special tax rules (e.g., banks or other financial institutions, real estate investment trusts, regulated
investment companies, insurance companies, broker-dealers, traders that elect or are required to mark-to-market for U.S. federal
income tax purposes, tax-exempt organizations and retirement plans, individual retirement accounts and tax-deferred accounts,
or former citizens or long-term residents of the United States) or to persons that hold Newegg stock as part of a straddle, hedge,
conversion, constructive sale, or other integrated transaction for U.S. federal income tax purposes, (ii)&nbsp;partnerships or
other entities classified as partnerships for U.S. federal income tax purposes or their partners, (iii)&nbsp;U.S. holders that
have a functional currency other than the U.S. dollar, (iv)&nbsp;U.S. holders of stock rights, options, or warrants with respect
to Newegg stock, or (v)&nbsp;U.S. holders of Newegg stock that acquired their Newegg stock as compensation, all of whom may be
subject to tax rules that differ significantly from those summarized below. This discussion also does not address any ways in
which the tax consequences may differ for holders of preferred stock. If a partnership or other entity classified as a partnership
for U.S. federal income tax purposes holds Newegg stock, the tax treatment of its partners generally will depend upon the status
of the partner, the activities of the partnership and certain determinations made at the partner level. If you are a partner in
a partnership holding Newegg stock, you should consult your own tax advisor regarding the tax consequences to you of the partnership&rsquo;s
purchase, ownership and sale of Newegg stock. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> This discussion does not discuss (i)&nbsp;the U.S. federal
income tax consequences to a U.S. holder of Newegg stock who dissents and exercises appraisal rights, (ii)&nbsp;any state or local,
foreign, estate, gift or alternative minimum tax considerations concerning the merger, or (iii)&nbsp;any information regarding
a non-U.S. holder. A non-U.S. holder is a holder that is not a U.S. holder. If you are not a U.S. holder you should consult with
your own tax advisor as to the United States federal, state, local, and foreign tax laws with respect to the merger. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B>Accordingly, each beneficial owner of Newegg stock is
urged to consult its own tax advisors regarding the U.S. federal, state, local, foreign, and other tax consequences of the merger
to such owner. </B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> For purposes of this discussion, a &ldquo;U.S. holder&rdquo;
is a beneficial owner of Newegg common or preferred stock that: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> &#9679; </TD><TD> is an individual
                                         U.S. citizen or resident (as determined for U.S. federal income tax purposes), </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> &#9679; </TD><TD> a corporation
                                         (or other entity that is classified as a corporation for U.S. federal income tax purposes)
                                         organized under the laws of the United States or any of its political subdivisions, </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> &#9679; </TD><TD> an estate
                                         the income of which is subject to U.S. federal income taxation regardless of its source,
                                         or </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> &#9679; </TD><TD> a trust
                                         if (i)&nbsp;a court within the United States is able to exercise primary supervision
                                         over the administration of the trust and one or more &ldquo;United States persons&rdquo;
                                         (as defined in the Code) have the authority to control all substantial decisions of the
                                         trust or (ii)&nbsp;the trust has a valid election in effect under current U.S. Treasury
                                         Regulations to be treated as a &ldquo;United States person.&rdquo; </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The Company and Newegg have structured the merger with the
intent that it will qualify as a tax-free &ldquo;reorganization&rdquo; within the meaning of Section 368(a) of the Code, specifically
as a &ldquo;reverse subsidiary merger&rdquo; under Section 368(a)(2)(E) of the Code. However, the qualification of the merger
as a reorganization depends on compliance with numerous technical requirements, and, as described in &ldquo;Risk Factors&rdquo;,
there is a risk that the merger may not satisfy certain of these requirements. The Company and Newegg have not sought, and will
not seek, any ruling from the IRS regarding any matter affecting the merger or any of the United States federal income tax consequences
discussed herein; and have not sought, and will not seek, any tax opinion from their respective legal counsel regarding the qualification
of the merger as a tax-free &ldquo;reorganization&rdquo; within the meaning of Section 368(a) of the Code. Thus, there can be
no assurance that the IRS will ultimately conclude that the merger does meet all of the requirements for qualification as a &ldquo;reorganization&rdquo;
within the meaning of Section 368(a) of the Code and generally as a tax-free transaction, and there can be no assurance that any
of the other statements made herein would not be challenged by the IRS and, if so challenged, would be sustained upon review in
a court. A successful challenge by the IRS could result in taxable income to Newegg and, as described below, its stockholders.
ACCORDINGLY, EACH STOCKHOLDER SHOULD CONSULT WITH SUCH STOCKHOLDER&rsquo;S OWN TAX ADVISOR WITH RESPECT TO ALL OF THE POTENTIAL
TAX CONSEQUENCES OF THE MERGER. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> If the merger is treated as a tax-free reorganization within
the meaning of Section 368(a) of the Code, then, subject to the limitations and qualifications referred to herein, the following
U.S. federal income tax consequences should result: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> &#9679; </TD><TD> A U.S. holder
                                         of Newegg stock will not recognize any gain or loss upon the receipt of Company shares
                                         in the merger. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> &#9679; </TD><TD> The aggregate
                                         adjusted tax basis of the shares received in the transaction by a U.S. holder of Newegg
                                         stock will be equal to the aggregate adjusted tax basis of such holder&rsquo;s Newegg
                                         stock exchanged therefor. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> &#9679; </TD><TD> The holding
                                         period for shares received in the transaction by a U.S. holder of Newegg stock will include
                                         the holding period of such U.S. holder&rsquo;s Newegg stock exchanged therefor. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> If the merger does not qualify as a tax-free reorganization
within the meaning of Section 368(a) of the Code, then the merger generally will be a taxable transaction, in which, in general,
a U.S. holder will recognize capital gain or loss on the exchange in an amount equal to the difference, if any, between (i)&nbsp;the
sum of the fair market value of Company shares and the fair market value of other merger consideration received and (ii)&nbsp;the
U.S. holder&rsquo;s adjusted tax basis in the Newegg stock exchanged in the merger. Gain or loss, as well as the holding period,
will be determined separately for each block of shares exchanged pursuant to the merger. Such gain or loss will be long-term capital
gain or loss provided that the U.S. holder has held (or is treated as having held) his or her Newegg stock for more than one year
as of the date of the merger. Otherwise, the recognized gain or loss generally will be a short-term capital gain or loss. <B>The
deductibility of capital losses may be subject to limitations, so U.S. holders are urged to consult with their own tax advisors
about their particular tax consequences, including the potential deductibility of their capital losses, if any.</B> The U.S. holder
will have an adjusted tax basis in the shares received equal to its fair market value, and the holding period of the shares received
by a U.S. holder pursuant to the merger will generally start anew. If the merger is determined by the Company to be a taxable
transaction, then information returns will be filed with the IRS with respect to each U.S. holder receiving shares in the merger. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> U.S. federal backup withholding or other withholding may
apply to any exchange of stock pursuant to the merger, unless the U.S. holder furnishes its taxpayer identification number and
other required information to the exchange agent (or otherwise provides acceptable proof of an applicable exemption) and complies
with all applicable requirements of the withholding rules. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B></B> </P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B>&nbsp;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B>For a discussion of the material U.S. federal income
tax consequences of owning our common shares after the merger, see &ldquo;Taxation.&rdquo;</B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_067"></A>Anticipated Accounting Treatment</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The merger will be accounted for as a reverse merger in accordance
with generally accepted accounting principles in the United States of America, or U.S. GAAP. Under this method of accounting,
the Company will be treated as the &ldquo;acquired&rdquo; company for financial reporting purposes. This determination was primarily
based on Newegg comprising the ongoing operations of the combined company, Newegg&rsquo;s senior management comprising the senior
management of the combined company and Newegg shareholder having a majority of the voting power of the combined company. For accounting
purposes, Newegg will be deemed to be the accounting acquirer in the transaction and, consequently, the transaction will be treated
as a recapitalization of Newegg (i.e., a capital transaction involving the issuance of shares by the Company for the stock of
Newegg). Accordingly, the consolidated assets, liabilities and results of operations of Newegg will become the historical financial
statements of the combined company, and the Company&rsquo;s assets, liabilities and results of operations will be consolidated
with Newegg beginning on the acquisition date.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_068"></A>Transaction Expenses</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company estimates that its total merger transaction expenses
will be approximately $[&nbsp;&nbsp; ], which includes financial advisor fees of approximately $[&nbsp;&nbsp; ], legal fees in
the amount of approximately $[&nbsp;&nbsp; ], accounting fees in the amount of approximately $[&nbsp;&nbsp; ], transfer agent
fees in the amount of approximately $[&nbsp;&nbsp; ], printing fees in the amount of approximately $[&nbsp;&nbsp; ], filing fees
in the amount of approximately $[&nbsp;&nbsp; ] and other expenses in the amount of approximately $[&nbsp;&nbsp; ]. None of these
expenses are contingent on approval and consummation of the merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg estimates that its total merger transaction expenses
will be approximately $[&nbsp;&nbsp; ], which includes legal fees in the amount of approximately $[&nbsp;&nbsp; ], accounting
fees in the amount of approximately $[&nbsp;&nbsp; ] and other expenses in the amount of approximately $[&nbsp;&nbsp; ]. None
of these expenses are contingent on approval and consummation of the merger.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_069"></A>No Appraisal or Dissenters&rsquo;
Rights</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Under BVI law, shareholders will not be entitled to appraisal
or dissenters&rsquo; rights in connection with the merger.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_070"></A>Vote Required</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Assuming that a quorum is present, the affirmative vote of
both (i) a majority of the votes cast at the special meeting and (ii) a majority of votes cast at the special meeting which are
not beneficially owned by Hangzhou Lianluo is required to approve the merger proposal.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_071"></A>Recommendation of the Board</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Each of the special committee and our board of directors unanimously
determined that the merger agreement and the transactions contemplated thereby, including the issuance of common shares in connection
with the merger, are advisable and fair to and in the best interests of shareholders and unanimously recommended that shareholders
vote &ldquo;FOR&rdquo; the merger proposal.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="al_072"></A>THE MERGER AGREEMENT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following is a summary of the material terms and conditions
of the merger agreement. This summary may not contain all the information about the merger agreement that is important to you.
This summary is qualified in its entirety by reference to the merger agreement attached as Annex A to, and incorporated by reference
into, this proxy statement/prospectus. You are encouraged to read the merger agreement in its entirety because it is the legal
document that governs the merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The merger agreement and the summary of its terms in this proxy
statement/prospectus have been included to provide information about the terms and conditions of the merger agreement. The terms,
conditions and information in the merger agreement are not intended to provide any public disclosure of factual information about
the Company, Newegg or any of their respective subsidiaries or affiliates. The representations, warranties, covenants and agreements
contained in the merger agreement were made by the Company, Newegg and Merger Sub as of specific dates and were qualified and
subject to certain limitations and exceptions agreed to by the Company, Newegg and Merger Sub in connection with negotiating the
terms of the merger agreement. In particular, in your review of the representations and warranties contained in the merger agreement
and described in this summary, it is important to bear in mind that the representations and warranties were negotiated for the
purpose of allocating contractual risk among the parties to the merger agreement rather than to establish matters as facts. The
representations and warranties may also be subject to a contractual standard of materiality or material adverse effect that is
different from what may be viewed as material by shareholders or other investors and from the materiality standard applicable
to reports and documents filed with the SEC and in some cases may be qualified by disclosures made by one party to the other,
which are not reflected in the merger agreement. Moreover, information concerning the subject matter of the representations and
warranties, which do not purport to be accurate as of the date of this proxy statement/prospectus, may have changed since the
date of the merger agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For the foregoing reasons, the representations, warranties,
covenants and agreements and any descriptions of those provisions should not be read alone as characterizations of the actual
state of facts or condition of the Company, Newegg or any of their respective subsidiaries or affiliates. Instead, such provisions
or descriptions should be read only in conjunction with the other information provided elsewhere in this proxy statement/prospectus
or incorporated by reference into this proxy statement/prospectus.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_073"></A>Structure of the Merger</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The merger agreement provides for the merger, in which Merger
Sub will be merged with and into Newegg, with Newegg surviving the merger as a wholly owned subsidiary of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Upon the completion of the merger, the Company&rsquo;s memorandum
and articles of association as in effect immediately prior to the merger shall continue to be the memorandum and articles of association
of the Company, subject to the amendments to be considered at the special meeting that are described elsewhere in this proxy statement/prospectus.
Upon the completion of the merger, most of the directors and officers of Newegg immediately prior to the merger will be appointed
to the same positions with the Company and all of our current directors and officers will resign at the time of the merger. See
&ldquo;Directors and Executive Officers&rdquo; for more information about our management upon completion of the merger.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_074"></A>Completion and Effectiveness of the
Merger</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The merger will be completed and become effective at such time
as the certificate of merger for the merger is filed with the Secretary of State of the State of Delaware (or at such time as
agreed to between the Company and Newegg and specified in such certificate of merger in accordance with applicable law). Unless
another date and time are agreed to by the Company and Newegg, completion of the merger will occur no earlier than the second
business day following the day on which the last of the conditions described under &ldquo;&mdash;Conditions to Completion of the
Merger&rdquo; is to be satisfied or waived (other than those conditions that by their nature are to be satisfied at the closing
of the merger, but subject to the satisfaction or waiver of such conditions).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of the date of this proxy statement/prospectus, we expect
that the merger will be completed in the first quarter of 2021. However, completion of the merger is subject to the satisfaction
or waiver of the conditions to completion of the merger, which are summarized below. There can be no assurances as to when, or
if, the merger will occur. If the merger is not completed on or before April 30, 2021 or June 30, 2021, if extended under certain
circumstances, either the Company or Newegg may terminate the merger agreement; provided that the right to terminate the merger
agreement if the merger is not completed on or prior to such date will not be available to either of the Company or Newegg if the
failure of the merger to be consummated by such date is due to a material breach by such party of any representation, warranty,
covenant or other agreement of such party set forth in the merger agreement. See &ldquo;&mdash;Conditions to Completion of the
Merger&rdquo; and &ldquo;&mdash;Termination of the Merger Agreement.&rdquo;</P>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_075"></A>Merger Consideration</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If the&nbsp;merger&nbsp;is completed, each share of the capital
stock of Newegg that was issued and outstanding immediately prior to the effective time of the&nbsp;merger will be converted into
the right to receive 5.8417 common shares of the Company (which we refer to as the exchange ratio), plus the right, if any, to receive
cash in lieu of fractional shares of the Company (which we collectively refer to as the merger consideration); provided that the
exchange ratio shall be appropriately adjusted to reflect the effect of any share split, split-up, reverse share split, share
dividend or distribution of securities convertible into the Company&rsquo;s common shares or Newegg&rsquo;s capital stock or any
reorganization, recapitalization, reclassification or other like change with respect to Company&rsquo;s common shares or Newegg&rsquo;s
capital stock having a record date occurring on or after the date of the merger agreement and prior to the completion of the merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The conversion ratio is equal the Newegg per share value divided
by the Company per share value. The Newegg per share value is equal $880,000,000 divided by the number of outstanding Newegg shares
on October 23, 2020. The Company per share value&rdquo; shall equal (i) the volume-weighted average trading price of Company Class
A common shares for the consecutive twenty (20) trading days immediately prior to and including October 16, 2020, as adjusted for
a 1 to 8 reverse stock split effective on the date of merger agreement minus (ii) (A) $3,500,000 (deposited in the escrow account)
divided by (B) the number of Company Class A common shares and Class B common shares issued and outstanding on the date of merger
agreement, after giving effect to such reverse stock split.</P>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_076"></A>Fractional Shares</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">No fractional shares will be issued to any holder of Newegg
capital stock upon the completion of the merger. Instead, the Company will pay in cash, without interest, an amount equal to the
amount of such fractional shares times $3.3944, the volume-weighted average trading price of the Company&rsquo;s Class A common
shares for the consecutive twenty (20) trading days immediately prior to and including October 16, 2020, after giving effect to
the 1 to 8 reverse stock split.</P>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_077"></A>Shares Subject to Properly Exercised
Appraisal Rights</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg shares issued and outstanding immediately prior to the
completion of the merger and held by a holder who is entitled to demand, and has properly demanded, appraisal for such Newegg
shares in accordance with the General Corporation Law of the State of Delaware will not be converted into the right to receive
the merger consideration to which they would otherwise be entitled to under the merger agreement, but will instead be converted
into the right to receive such consideration as may be determined to be due to such holder pursuant to the procedures set forth
in the General Corporation Law of the State of Delaware. If any such holder withdraws its demand for appraisal or fails to perfect
or otherwise loses its right of appraisal pursuant to the General Corporation Law of the State of Delaware, then such holder&rsquo;s
Newegg shares will instead be deemed to have been converted into the right to receive the merger consideration.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_078"></A>Treatment of Newegg Equity Awards</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The terms of the equity-based compensation issued by Newegg
prior to the merger will be assumed by the Company. The shares of common stock that are issued or may be issued under Newegg&rsquo;s
Incentive Award Plan and Significant Shareholder Incentive Plan will be exchanged for our common shares, adjusted for the exchange
ratio, but otherwise on the same terms and conditions.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_079"></A>Escrow Account</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The Company has placed $3,500,000 into a U.S. bank account
designated by <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a third-party escrow agent mutually selected
by the Company and Newegg. The escrow amount will be used solely to (i) defend, indemnify and hold harmless the parties to the
merger agreement and each of their respective affiliates and representatives against, and satisfy any liabilities relating to,
any actions relating to the securities purchase agreements dated February 12, 2020, February 21, 2020 and February 27, 2020 between
the Company and certain investors or the Class A common share purchase warrants issued on February 12, 2020, February 25, 2020,
and March 2, 2020, in each case as amended or restated and (ii) pay the amount of any fee that is payable from the Company to
Newegg for termination of the merger agreement. </FONT> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_080"></A>Conditions to Completion of the Merger</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Mutual Conditions to Completion</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The obligation of each of the Company, Newegg and Merger Sub
to complete the merger is subject to the fulfillment (or waiver, to the extent permissible under applicable law) of the following
conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">the shareholders of the Company
                                         shall have approved the merger, the disposition and the other proposals set forth herein,
                                         which shall in all cases include approval of a majority of votes cast which are not beneficially
                                         owned by Hangzhou Lianluo;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">all consents or filings required
                                         to be obtained from or made with any governmental authority or third parties in order
                                         to consummate the transactions contemplated by the merger agreement shall have been obtained
                                         or made;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">no governmental authority shall
                                         have enacted, issued, promulgated, enforced or entered any law (whether temporary, preliminary
                                         or permanent) or order that is then in effect and which has the effect of making the
                                         transactions or agreements contemplated by the merger agreement or the disposition agreement
                                         illegal or which otherwise prevents or prohibits consummation of the transactions contemplated
                                         by the merger agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">there shall not be any pending
                                         action brought by a third-party non-affiliate to enjoin or otherwise restrict the consummation
                                         of the merger or the disposition;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">the persons identified by Newegg
                                         shall have been elected or appointed to the Company&rsquo;s board of directors;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">all of the conditions to the
                                         obligations of each party to consummate the disposition described in the disposition
                                         agreement shall have been satisfied;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">Benchmark shall have delivered
                                         its fairness opinion to our board;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="font-family: Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: left">amendment to certain stockholder agreement, dated March 30, 2017, between Newegg and certain stockholders
of Newegg that is being entered into concurrently with the merger agreement shall be in full force and effect and shall be assigned
from Newegg to the Company at the closing of the merger;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">the registration statement of
                                         which this proxy statement/prospectus forms a part shall have become effective under
                                         the Securities Act and shall not be the subject of any stop order or proceedings seeking
                                         a stop order;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">the registration statement on
                                         Form F-1 relating to a public offering of common shares of the Company shall have become
                                         effective under the Securities Act and shall not be the subject of any stop order or
                                         proceedings seeking a stop order; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">the foregoing offering shall
                                         have simultaneously closed at the time of the merger, with the deposition closing immediately
                                         thereafter.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Additional Conditions to Completion for the Benefit of
Newegg</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, the obligation of Newegg to complete the merger
is subject to the satisfaction (or waiver, to the extent permitted by applicable law) of the following conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>all of the representations and warranties of the Company
                                         and the Merger Sub set forth in the merger agreement and in any certificate delivered
                                         by the Company and the Merger Sub pursuant thereto shall be true and correct on and as
                                         of the date of the agreement and on and as of the completion date of the merger as if
                                         made on the completion date, except for (i) those representations and warranties that
                                         address matters only as of a particular date (which representations and warranties shall
                                         have been accurate as of such date), and (ii) any failures to be true and correct that
                                         (without giving effect to any qualifications or limitations as to materiality or material
                                         adverse effect), individually or in the aggregate, have not had and would not reasonably
                                         be expected to have a material adverse effect on, or with respect to, the Company and
                                         its subsidiaries or materially and adversely affects the Company and the Merger Sub&rsquo;s
                                         ability to consummate the transactions contemplated by the merger agreement (see &ldquo;&mdash;Definition
                                         of Material Adverse Effect&rdquo; for the definition of material adverse effect);</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the Company and the Merger Sub shall have performed in
                                         all material respects all of such party&rsquo;s obligations and complied in all material
                                         respects with all of such party&rsquo;s agreements and covenants under the merger agreement
                                         to be performed or complied with by it on or prior to the completion of the merger;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>no material adverse effect shall have occurred with respect
                                         to the Company, Merger Sub and any subsidiary since the date of the merger agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the Company shall have entered into employment agreements,
                                         in form and substance reasonably satisfactory to Newegg, with the persons identified
                                         by Newegg;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>Newegg shall have received a duly executed legal opinion
                                         addressed to Newegg from the Company&rsquo;s legal counsel in form and substance reasonably
                                         satisfactory to Newegg;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>Newegg shall have received from the Company copy of the
                                         amended and restated memorandum and articles of association of the Company approved by
                                         shareholders at the special meeting;&nbsp;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the Company and Merger Sub shall have delivered to Newegg
                                         customary officer&rsquo;s certificates, secretary&rsquo;s certificates and good standing
                                         certificates;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> &#9679; </TD><TD> if required, the transactions contemplated by the
                                         merger agreement shall have been approved by the investors pursuant to the securities
                                         purchase agreements that the investors and the Company entered into on February 12, February
                                         21 and February 27, 2020; and </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the Company shall have been approved by NASDAQ for listing
                                         following the merger.&nbsp;&nbsp;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Additional Conditions to Completion for the Benefit of
the Company and Merger Sub</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, the obligation of each of the Company and Merger
Sub to complete the merger is subject to the satisfaction (or waiver, to the extent permitted by applicable law) of the following
conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>all of the representations and warranties of Newegg (including
                                         its subsidiaries) set forth in the merger agreement and in any certificate delivered
                                         by Newegg pursuant thereto shall be true and correct on and as of the date of the merger
                                         agreement and on and as of the completion date of the merger as if made on the completion
                                         date, except for (i) those representations and warranties that address matters only as
                                         of a particular date (which representations and warranties shall have been accurate as
                                         of such date), and (ii) any failures to be true and correct that (without giving effect
                                         to any qualifications or limitations as to materiality or material adverse effect), individually
                                         or in the aggregate, have not had and would not reasonably be expected to have a material
                                         adverse effect on, or with respect to, Newegg and any subsidiary or materially and adversely
                                         affect Newegg&rsquo;s ability to consummate the transactions contemplated by the merger
                                         agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>Newegg shall have performed in all material respects
                                         all of Newegg&rsquo;s obligations and complied in all material respects with all of Newegg&rsquo;s
                                         agreements and covenants under the merger agreement to be performed or complied with
                                         by it on or prior to the completion of the merger;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="font-family: Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="text-align: left">lock-up agreements which are entered into on the date of the merger agreement by among Newegg, the Company and any Newegg stockholders
who would hold more than 5% of the Company common shares immediately after the closing shall be in full force and effect in accordance
with their as of the closing;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>No material adverse effect shall have occurred and be
                                         continuing with respect to Newegg and its subsidiaries, taken as whole, since the date
                                         of the merger agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the Newegg shall have delivered to the Company and Merger
                                         Sub customary officer&rsquo;s certificates, secretary&rsquo;s certificates and good standing
                                         certificates; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the Company and Merger Sub shall have received a duly
                                         executed legal opinion addressed to the Company and Merger Sub from the Newegg&rsquo;s
                                         legal counsel in form and substance reasonably satisfactory to the Company and Merger
                                         Sub.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_083"></A>Representations and Warranties</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The merger agreement contains a number of representations and
warranties made by the Company, Merger Sub and Newegg, that are subject in certain cases to exceptions and qualifications (including
exceptions that are not material to the party making the representations and warranties and its subsidiaries, taken as a whole,
and exceptions that do not have, and would not reasonably be expected to have, individually or in the aggregate, a material adverse
effect on the party making the representations and warranties). The representations and warranties in the merger agreement relate
to, among other things:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>organization, good standing and corporate power;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>due authorization, execution and validity of the merger
                                         agreement;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>capitalization;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>ownership of subsidiaries;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>governmental approvals for the merger;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>absence of any violation, conflict or breach of agreements,
                                         or any conflict with or violation of organizational documents or laws as a result of
                                         the execution or delivery of the merger agreement and completion of the merger;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>financial statements and disclosures;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>absence of certain changes or events since the date of
                                         the last balance sheet of a party to the merger agreement;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0"></P>

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<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>compliance with laws and permits;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>litigation;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>material contracts;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>intellectual property;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>tax matters;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>real or personal properties owned or leased by a party
                                         to the merger agreement;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>labor and other employee matters;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>employee benefit plans;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>transactions with related persons;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>books and records;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>accounts receivable;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>business practices;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>Investment Company Act of 1940;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>fees payable to finders or brokers in connection with
                                         the merger;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>information provided by the applicable party for inclusion
                                         in disclosure documents to be filed with the SEC in connection with the merger;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>SAFE registrations; and</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>SEC filings, the absence of material misstatements or
                                         omissions from such filings.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_081"></A>Definition of Material Adverse Effect</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Many of the representations and warranties in the merger agreement
are qualified by &ldquo;material adverse effect&rdquo; on the party making such representations and warranties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For purposes of the merger agreement, &ldquo;material adverse
effect&rdquo; means any effect that is or would be materially adverse to the business, operations, assets, condition (financial
or otherwise) or results of operations of such party and its subsidiaries, taken as a whole, or to the ability of such party to
enter into or perform its obligations under the merger agreement or any ancillary document to which it is or is required to be
a party or to consummate the transactions under the merger agreement such ancillary document; provided, however, that with respect
to Company or its subsidiaries, &ldquo;material adverse effect&rdquo; shall be measured after giving effect to the disposition
and shall also include any effect that is or would be reasonably expected to be materially adverse to the issuance of the common
shares to be issued in the merger and listing thereof on NASDAQ.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_082"></A>Conduct of Business Pending the Merger</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Each of the Company and Newegg have agreed that, unless the
other party shall otherwise consent in writing (such consent not to be unreasonably withheld, conditioned or delayed), during the
period from the date of the merger agreement and continuing until the earlier of the termination of the merger agreement or the
completion of the merger, except as expressly contemplated by the merger agreement, each party shall, and shall cause its subsidiaries
to, (i) conduct their respective businesses, in all material respects, in the ordinary course of business consistent with past
practice, (ii) comply with all laws applicable to each party and their respective businesses, assets and employees, and (iii) take
all reasonable measures necessary or appropriate to preserve intact, in all material respects, their respective business organizations,
to keep available the services of their respective managers, directors, officers, employees and consultants, to maintain, in all
material respects, their existing relationships with all top customers and top suppliers (as such terms are defined in the merger
agreement), and to preserve the possession, control and condition of their respective material assets, all as consistent with past
practice. The Company also agreed to settle any and all pending or threatened actions, lawsuits and/or proceedings involving any
it or any of its subsidiaries, its current or former directors, officers or equity holders in connection with any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act or transaction existing
prior to the completion of the merger. The Company and its subsidiaries (excluding Lianluo Connection) will not reduce their consolidated
working capital (as determined in accordance with GAAP) by more than $1,000,000, and the Company and its subsidiaries (excluding
Lianluo Connection) will not reduce their consolidated net assets (measured as the sum of their assets minus their liabilities,
each as determined in accordance with GAAP) by more than $1,000,000, except for any deviations from any of the foregoing due to
expenses which are strictly necessary for the consummation of the transactions contemplated by the merger agreement or for maintenance
of Company&rsquo;s status as an SEC reporting company with its Class A common shares listed on NASDAQ.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, without limiting the generality of&nbsp;the foregoing&nbsp;and
except as contemplated by the terms of merger agreement, during the period from the date of the merger agreement and continuing
until the earlier of the termination of the merger agreement or the completion of the merger, each of the Company and Newegg agreed
that it shall not, and shall cause its subsidiaries not to, without the prior written consent of the other party (such consent
not to be unreasonably withheld, conditioned or delayed):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>except for the changes contemplated by the charter amendment
                                         proposal, or as otherwise necessary for the Company maintain compliance with the minimum
                                         bid price requirements of the NASDAQ Capital Market, amend, waive or otherwise change,
                                         in any respect, its organizational documents;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>with certain exceptions, authorize for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell,
                                                                     pledge or dispose of any of its equity securities or any options, warrants, commitments, subscriptions or rights of any kind
                                                                     to acquire or sell any of its equity securities, or other securities, including any securities convertible into or
                                                                     exchangeable for any of its shares or other equity securities or securities of any class and any other equity-based awards,
                                                                     or engage in any hedging transaction with a third person with respect to such securities;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>except for the changes contemplated by the charter amendment
                                         proposal, or as otherwise necessary for the Company maintain compliance with the minimum
                                         bid price requirements of the NASDAQ Capital Market, split, combine, recapitalize or
                                         reclassify any of its shares or other equity interests or issue any other securities
                                         in respect thereof or pay or set aside any dividend or other distribution (whether in
                                         cash, equity or property or any combination thereof) in respect of its equity interests,
                                         or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any
                                         of its securities;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>in the case of Newegg, incur, create, assume, prepay or otherwise become liable for any indebtedness (directly, contingently
or otherwise), outside the ordinary course of business, in excess of $250,000 (individually or in the aggregate), make a loan or
advance to or investment in any third party, or guarantee or endorse any indebtedness, liability or obligation of any person outside
the ordinary course of business;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>in the case of the Company, except for accounts payable incurred in the ordinary course of business that are necessary to maintain
the Company&rsquo;s public listing or to implement the transactions contemplated by the merger agreement, incur, create, assume
or otherwise become liable for any indebtedness (directly, contingently or otherwise) or liability that the Company or any of its
then current subsidiaries would be liable for after the disposition, make a loan or advance to or investment in any third party,
or guarantee or endorse any indebtedness, liability or obligation of any person, or prepay any indebtedness of liability;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>increase the wages, salaries or compensation of its employees
                                         other than in the ordinary course of business, consistent with past practice, and in
                                         any event not in the aggregate by more than five percent (5%), or make or commit to make
                                         any bonus payment (whether in cash, property or securities) to any employee, or materially
                                         increase other benefits of employees generally, or enter into, establish, materially
                                         amend or terminate any benefit plan with, for or in respect of any current consultant,
                                         officer, manager director or employee, in each case other than as required by applicable
                                         law, pursuant to the terms of any benefit plans or in the ordinary course of business
                                         consistent with past practice;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>make or rescind any material election relating to taxes,
                                         settle any claim, action, suit, litigation, proceeding, arbitration, investigation, audit
                                         or controversy relating to taxes, file any amended tax return or claim for refund, or
                                         make any material change in its accounting or tax policies or procedures, in each case
                                         except as required by applicable law or in compliance with U.S. GAAP;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="font-family: Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD>other than the disposition of Lianluo Connection, transfer or license to any person or otherwise extend, materially amend or
modify, permit to lapse or fail to preserve any of intellectual property, or disclose to any person who has not entered into a
confidentiality agreement any trade secrets;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>terminate, or waive or assign any material right under
                                         any material agreement to which it is a party;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>fail to maintain its books, accounts and records in all
                                         material respects in the ordinary course of business consistent with past practice;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>establish any subsidiary or enter into any new line of
                                         business;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>fail to use commercially reasonable efforts to keep in
                                         force insurance policies or replacement or revised policies providing insurance coverage
                                         with respect to its assets, operations and activities in such amount and scope of coverage
                                         as are currently in effect;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>revalue any of its material assets or make any change
                                         in accounting methods, principles or practices, except to the extent required to comply
                                         with U.S. GAAP and after consulting with its outside auditors;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">in
                                         the case of Newegg, waive, release, assign, settle or compromise any claim, action or
                                         proceeding (including any suit, action, claim, proceeding or investigation relating to
                                         the merger agreement or the transactions contemplated thereby), other than waivers, releases,
                                         assignments, settlements or compromises that involve only the payment of monetary damages
                                         (and not the imposition of equitable relief on, or the admission of wrongdoing by, Newegg
                                         or its affiliates) not in excess of $250,000 (individually or in the aggregate), or otherwise
                                         pay, discharge or satisfy any actions, liabilities or obligations, unless such amount
                                         has been reserved in Newegg&rsquo;s financial statements;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">in
                                         the case of the Company, waive, release, assign, settle or compromise any claim, action
                                         or proceeding (including any suit, action, claim, proceeding or investigation relating
                                         to the merger agreement or the transactions contemplated thereby), or otherwise pay,
                                         discharge or satisfy any actions, liabilities or obligations, unless such amount has
                                         been reserved in the Company&rsquo;s financial statements;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">in
                                         the case of Newegg, effectuate a &ldquo;plant closing&rdquo; (as defined in the federal
                                         Worker Adjustment and Retraining Notification Act) affecting any site of employment or
                                         one or more facilities or operating units within any site of employment or facility;
                                         or experience a &ldquo;mass layoff&rdquo; (as defined in such Act) affecting any site
                                         of employment or facility; or engaged in layoffs or employment terminations sufficient
                                         in number to trigger application of any similar state, local or foreign law or regulation;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="font-family: Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD>in the case of the Company, other than the disposition of Lianluo Connection, close or materially reduce its or any of its
subsidiaries&rsquo; activities, or effect any layoff or other personnel reduction or change, at any of their respective facilities;</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">acquire,
                                         including by merger, consolidation, acquisition of stock or assets, or any other form
                                         of business combination, any corporation, partnership, limited liability company, other
                                         business organization or any division thereof, or any material amount of assets outside
                                         the ordinary course of business consistent with past practice;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">in
                                         the case of Newegg, make capital expenditures in excess of $250,000 (individually for
                                         any project (or set of related projects) or in the aggregate);</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="font-family: Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD>in the case of the Company, make any expenditures in excess of $50,000 individually (or for any set of related expenditures)
or $250,000 in the aggregate, other than expenditures which are paid for by Lianluo Connection which are strictly necessary and
in the ordinary course of business of Lianluo Connection or expenses which are strictly necessary for the consummation of the transactions
contemplated by the merger agreement or to maintain the Company&rsquo;s status as an SEC reporting company with its Class A common
shares listed on NASDAQ;</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">adopt
                                         a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring,
                                         recapitalization or other reorganization;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="font-family: Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD>in the case of Newegg, voluntarily incur any liability or obligation (whether absolute, accrued, contingent or otherwise) in
excess of $250,000 individually or $1,000,000 in the aggregate other than pursuant to the terms of a material contract or benefit
plan in effect on the date of the merger agreement;</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">in
                                         the case of the Company, except as set forth in the merger agreement, voluntarily incur
                                         any liability or obligation (whether absolute, accrued, contingent or otherwise) which
                                         the Company or any of its then current subsidiaries would be liable for after the disposition;&nbsp;&nbsp;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="font-family: Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD>other than the disposition of Lianluo Connection, sell, lease, license, transfer, exchange or swap, mortgage or otherwise pledge
or encumber (including securitizations), or otherwise dispose of any material portion of its properties, assets or rights;</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="font-family: Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD>other than the support agreements, enter into any agreement, understanding or arrangement with respect to the voting of equity
securities of such party;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">take
                                         any action that would reasonably be expected to significantly delay or impair the obtaining
                                         of any consents or approvals of any governmental authority to be obtained in connection
                                         with the merger agreement;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">enter
                                         into, amend, waive or terminate (other than terminations in accordance with their terms)
                                         any transaction with any related person (as defined in the merger agreement);</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="font-family: Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD>transfer any cash in excess of $1,000,000 from the Company to any of its subsidiaries (other than Merger Sub); or</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">authorize
                                         or agree to do any of the foregoing actions.</FONT></TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_084"></A>Go Shop</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During the period from the date of the merger agreement and
continuing until the earlier of the termination of the merger agreement or the completion of the merger, each of the Company and
Newegg may and may cause its representatives to directly or indirectly, (i) solicit, assist, initiate or facilitate the making,
submission or announcement of, or intentionally encourage, any acquisition proposal, (ii) furnish any non-public information regarding
such party or its affiliates or their respective businesses, operations, assets, liabilities, financial condition, prospects or
employees to any person or group in connection with or in response to an acquisition proposal, (iii) engage or participate in discussions
or negotiations with any person or group with respect to, or that could be expected to lead to, an acquisition proposal, (iv) approve,
endorse or recommend, or publicly propose to approve, endorse or recommend, any acquisition proposal, (v) negotiate or enter into
any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any acquisition proposal,
or (vi) release any third person from, or waive any provision of, any confidentiality agreement to which such party is a party.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Each of the Company and Newegg agreed to notify the other as
promptly as practicable (and in any event within 48 hours) orally and in writing of the receipt by such party or any of its representatives
of (i) any bona fide inquiries, proposals or offers, requests for information or requests for discussions or negotiations regarding
or constituting any acquisition proposal or any bona fide inquiries, proposals or offers, requests for information or requests
for discussions or negotiations that could be expected to result in an acquisition proposal, and (ii) any request for non-public
information relating to such party or its affiliates (or any subsidiary), specifying in each case, the material terms and conditions
thereof (including a copy thereof if in writing or a written summary thereof if oral) and the identity of the party making such
inquiry, proposal, offer or request for information. Each of the Company and Newegg agreed to shall keep the other promptly informed
of the status of any such inquiries, proposals, offers or requests for information.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
purposes of the merger agreement, an &ldquo;acquisition proposal&rdquo; means any inquiry, proposal or offer, or any indication
of interest in making an offer or proposal, from any person or group at any time relating to a transaction (other than the transactions
contemplated by the merger agreement) concerning the sale of (i) all or any material part of the business or assets of any subsidiaries
of Newegg or the Company (including any subsidiary), or (ii) any of the shares or other equity interests or profits of any subsidiaries
of Newegg or the Company (including any subsidiary), in any case, whether such transaction takes the form of a sale of shares
or other equity, assets, merger, consolidation, issuance of debt securities, management contract, joint venture or partnership,
or otherwise.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_085"></A>Proxy
Statement and Registration Statement Covenant</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company agreed to prepare and file this proxy statement/prospectus with the SEC. Except with respect to the information provided
by or on behalf of Newegg for inclusion in this proxy statement/prospectus, the Company agreed to ensure that, when furnished,
this proxy statement/prospectus will comply in all material respects with the requirements of the Exchange Act and the rules and
regulations thereunder. The Company also agreed to cause this proxy statement/prospectus to be disseminated as promptly as practicable
to its shareholders as and to the extent such dissemination is required by U.S. federal securities laws and the rules and regulations
of the SEC and NASDAQ promulgated thereunder or otherwise. Newegg agreed to promptly provide to the Company such information concerning
it and its subsidiaries and their respective businesses, operations, condition (financial or otherwise), assets, liabilities,
properties, officers, directors and employees as is either required by securities law or reasonably requested by the Company for
inclusion in this proxy statement/prospectus. Subject to compliance by Newegg with the immediately preceding sentence with respect
to the information provided or to be provided by or on behalf of it for inclusion in this proxy statement/prospectus, the Company
agreed to cause the proxy statement/prospectus to comply in all material respects with federal securities laws.</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company also agreed to provide copies of the proposed forms of the proxy statement/prospectus (including any amendments or supplements
thereto) to Newegg such that Newegg and its representatives are afforded a reasonable amount of time prior to the dissemination
or filing thereof to review such material and comment thereon prior to such dissemination or submission, and the Company agreed
to reasonably consider in good faith any comments of such persons. The Company and Newegg and their respective representatives
agreed to respond promptly to any comments of the SEC or its staff with respect to the proxy statement/prospectus and promptly
correct any information provided by it for use in the proxy statement/prospectus if and to the extent that such information shall
have become false or misleading in any material respect or as otherwise required by federal securities laws. The Company agreed
to provide Newegg and its representatives with copies of any written comments, and shall inform them of any material oral comments,
that the Company or any of its representatives receive from the SEC or its staff with respect to the proxy statement/prospectus
promptly after the receipt of such comments and shall give Newegg a reasonable opportunity under the circumstances to review and
comment on any proposed written or material oral responses to such comments.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company agreed to use its reasonable commercial efforts to cause the registration statement of which this proxy statement/prospectus
forms a part to &ldquo;clear&rdquo; comments from the SEC and its staff and to permit Newegg and its representatives to participate
with the Company or its representatives in any discussions or meetings with the SEC and its staff. Newegg agreed to make, and
to cause each of its subsidiaries to make, their respective directors, officers and employees, upon reasonable advance notice,
available to the Company and its representatives in connection with the drafting of the public filings with respect to the transactions
contemplated by the merger agreement, including the proxy statement/prospectus, and responding in a timely manner to comments
from the SEC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company agreed to call the special meeting as promptly as reasonably practicable after the registration statement of which this
proxy statement/prospectus forms a part has &ldquo;cleared&rdquo; comments from the SEC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company and Newegg also agreed that, if at any time prior to the completion of the merger, any information relating to the Company,
on the one hand, or Newegg, on the other hand, or any of their respective affiliates, businesses, operations, condition (financial
or otherwise), assets, liabilities, properties, officers, directors or employees, should be discovered by the Company, on the
one hand, or Newegg, on the other hand, that should be set forth in an amendment or supplement to the proxy statement/prospectus,
so that such documents would not include any misstatement of a material fact or omit to state any material fact necessary to make
the statements therein, in light of the circumstances under which they were made, not misleading, the party which discovers such
information shall promptly notify each other party and an appropriate amendment or supplement describing such information shall
be promptly furnished to the SEC and, to the extent required by law, disseminated to the Company&rsquo;s shareholders.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_086"></A>Other
Agreements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
merger agreement contains certain other covenants and agreements, including covenants and agreements requiring that, among other
things, and subject to certain exceptions and qualifications described in the merger agreement:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">each
                                         of the Company and Newegg will provide the other party and its representatives at reasonable
                                         times during normal business hours and upon reasonable intervals and notice, access to
                                         all offices and other facilities and to all employees, properties, contracts, agreements,
                                         commitments, books and records, financial and operating data and other information as
                                         the other party may reasonably request;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">from
                                         the date of the merger agreement through the completion of the merger, within thirty
                                         (30) calendar days following the end of each three-month quarterly period and each fiscal
                                         year, Newegg will deliver to the Company an unaudited consolidated income statement and
                                         an unaudited consolidated balance sheet for the period from the date of the most recent
                                         audited financials through the end of such quarterly period or fiscal year and the applicable
                                         comparative period in the preceding fiscal year, in each case accompanied by a certificate
                                         of the chief executive officer and the chief financial officer of Newegg to the effect
                                         that all such financial statements fairly present in all material respects the consolidated
                                         financial position and results of operations of Newegg as of the date or for the periods
                                         indicated, in accordance with U.S. GAAP, subject to year-end audit adjustments and excluding
                                         footnotes;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">from
                                         the date of the merger agreement through the completion of the merger, Newegg will also
                                         promptly deliver to the Company copies of any audited consolidated financial statements
                                         of Newegg and its subsidiaries that Newegg&rsquo;s certified public accountants may issue;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">during
                                         the period from the date of the merger agreement and continuing until the earlier of
                                         the termination of the merger agreement or the completion of the merger, the Company
                                         will keep current and timely file all of its public filings with the SEC (including any
                                         extension periods that may be applicable) and otherwise comply in all material respects
                                         with applicable securities laws and shall use its commercially reasonable efforts to
                                         maintain the listing of its Class A common shares on NASDAQ;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">during
                                         the period from the date of the merger agreement and continuing until the earlier of
                                         the termination of the merger agreement or the completion of the merger, each of the
                                         Company and Newegg will to give prompt notice of any material developments as more particularly
                                         described in the merger agreement; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">each
                                         of the Company and Newegg will use its commercially reasonable efforts to take all actions
                                         necessary, proper or advisable in order to complete the merger.</FONT></TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_087"></A>Termination
of the Merger Agreement</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
merger agreement may be terminated at any time prior to the completion of the merger, whether before or after shareholders have
approved the merger, in any of the following ways:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">by
                                         mutual written consent of the Company and Newegg;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="font-family: Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD>by either the Company or Newegg (i) if the merger shall not have occurred on or prior to April 30, 2021; provided, that the
right to terminate shall not be available to any party whose material breach of a representation, warranty or covenant in the merger
agreement has been a principal cause of the failure of the merger to be consummated on or before such outside date, provided further
that such outside date shall be automatically extended up to two additional times by one month each time if, on the then current
outside date (A) all conditions to closing, except for NASDAQ initial listing, have been satisfied or waived, or are imminently
capable of being satisfied, (B) NASDAQ initial listing is reasonably likely to be satisfied by such outside date, as extended,
and (C) the parties have exercised and continue to exercise their best efforts to satisfy the conditions of NASDAQ initial listing;
(ii) if any governmental authority of competent jurisdiction shall have issued an order or taken any other action permanently restraining,
enjoining or otherwise prohibiting the merger, and, in each case, such order or action shall have become final and non-appealable;&nbsp;provided,
that the right to terminate shall not be available to any party whose material breach of a representation, warranty or covenant
in the merger agreement has been the principal cause of such action, (iii) if the approval of a majority of votes cast which are
not beneficially owned by Hangzhou Lianluo shall not have been obtained at the special shareholder meeting; or (iv) if any required
approval by the Newegg shareholders shall not have been obtained within five days after the date of the merger agreement;</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="font-family: Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD>by Newegg (provided it is not then in material breach of any of its obligations under the merger agreement) (i) if there is
any breach of any representation, warranty, covenant or agreement on the part of the Company or Merger Sub set forth in the merger
agreement, or if any representation or warranty of the Company or Merger Sub shall have become untrue, in either case such that
the applicable conditions set forth in&nbsp;the merger agreement would not be satisfied; provided, however, if such breach is curable
by the Company or Merger Sub, Newegg may not terminate for so long as the Company or Merger Sub continue to exercise their best
efforts to cure such breach, unless such breach is not cured within thirty (30) days after notice of such breach is provided by
Newegg to the Company, (ii) if for any reason the Company fails to call and hold the special meeting within sixty (60) days following
the filing of this registration statement of which this proxy statement/prospectus forms a part, unless such failure is as a result
of the Company responding in good faith to comments on this proxy statement/prospectus or the registration statement on Form F-1
related to the concurrent offering received from the SEC or comments from NASDAQ, (iii) if the Company&rsquo;s board (or any subgroup
or committee thereof) withdraws, modifies or changes its recommendation of the merger agreement or the merger in a manner adverse
to Newegg or shall have resolved to do any of the foregoing, or approves or recommends, or proposes to approve or recommend, an
acquisition proposal; or (iv) if the escrow amount is not placed into the escrow account within five days after the date of the
merger agreement;</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="font-family: Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD>by the Company (provided neither it nor its subsidiary is then in material breach of any of their obligations under the merger
agreement) (i) if there is any breach of any representation, warranty, covenant or agreement on the part of Newegg as set forth
in the merger agreement or if any representation or warranty of Newegg shall have become untrue, in either case such that the applicable
conditions set forth in the merger agreement&nbsp;would not be satisfied; provided, however, if such breach is curable by Newegg,
the Company may not terminate the merger agreement for so long as Newegg continues to exercise its best efforts to cure such breach,
unless such breach is not cured within thirty (30) days after notice of such breach is provided by the Company to Newegg, or (ii)
if the Newegg board (or any subgroup or committee thereof) (A) withdraws, modifies or changes its recommendation of the merger
agreement or the merger in a manner adverse to the Company or shall have resolved to do any of the foregoing, or (B) approves or
recommends, or proposes to approve or recommend, an acquisition proposal;</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">by
                                         Newegg if it receives an unsolicited, bona fide written offer prior to the approval of
                                         the shareholders at the special meeting, and Newegg&rsquo;s special committee determines
                                         in good faith (based upon a written opinion of an independent financial advisor) that
                                         such offer constitutes a superior offer to the stockholders of Newegg to the terms set
                                         forth in the merger agreement, and the special committee determines in good faith (based
                                         upon advice of counsel) that, in light of such superior offer, the withdrawal or modification
                                         of the board&rsquo;s approval is required in order for the board to comply with its fiduciary
                                         obligations to Newegg&rsquo;s stockholders under the applicable law; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">by
                                         the Company if it receives an unsolicited, bona fide written offer prior to the approval
                                         of the shareholders at the special meeting, and the Company&rsquo;s special committee
                                         determines in good faith (based upon a written opinion of an independent financial advisor)
                                         that such offer constitutes a superior offer to the shareholders of the Company to the
                                         terms set forth in the merger agreement, and the special committee determines in good
                                         faith (based upon advice of counsel) that, in light of such superior offer, the withdrawal
                                         or modification of the board&rsquo;s approval is required in order for the board to comply
                                         with its fiduciary obligations to the Company&rsquo;s shareholders under the applicable
                                         law.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the merger agreement is validly terminated, the merger agreement will terminate (except that the&nbsp;confidentiality agreement
between Newegg and the Company, and the provisions described in Section 5.12 (Public Announcements), Section 5.13 (Confidential
Information), Section 7.2 (Effect of Termination), Article VII (Termination), Article VIII (Indemnification) and Article&nbsp;IX
(General Provisions) of the merger agreement, which provisions shall survive such termination), and there will be no other liability
on the part of either party to the other except as described under &ldquo;&mdash;Termination Fees and Expenses;&rdquo; provided,&nbsp;that
no party will be relieved from liability for fraud or a willful breach of a representation or warranty contained in the merger
agreement or the breach of any covenant contained in the merger agreement, in which case the aggrieved party will be entitled
to all rights and remedies available at law or in equity.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_088"></A>Termination
Fees and Expenses</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1pt">If the merger agreement is terminated (i) due to the
failure of the Company to obtain the approval of a majority of votes cast which are not beneficially owned by Hangzhou Lianluo
at the special shareholder meeting, or (ii) upon any of the events described in the third or seventh bullet under &ldquo;&mdash;Termination
of the Merger Agreement&rdquo; above, then the Company is required to immediately repay to Newegg in cash or by wire transfer
of immediately available funds, all legal and accounting fees incurred by Newegg in connection with the merger agreement and the
transactions contemplated thereby up to an amount equal to $450,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt"> If the merger agreement is terminated (i) due to the failure
of Newegg to obtain any required approval by the Newegg shareholders within five days after the date of the merger agreement,
or (ii) upon the event described in the fifth or sixth bullet under &ldquo;&mdash;Termination of the Merger Agreement&rdquo; above,
then Newegg is required to immediately repay to the Company in cash or by wire transfer of immediately available funds all legal
and accounting fees incurred by the Company in connection with the merger agreement and the transactions contemplated thereby
up to an amount equal to $450,000. During the period from the date of the merger agreement and continuing until the earlier of
the termination of the merger agreement or the completion of the merger, Newegg agreed to keep $450,000 of cash available for
the payment of the foregoing termination fee. </P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_089"></A>Other
Expenses</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
merger agreement provides that each of the Company and Newegg will pay its own costs and expenses in connection with the transactions
contemplated by the merger agreement.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_090"></A>Specific
Performance</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
parties to the merger agreement are entitled to an injunction or injunctions to prevent breaches of the merger agreement and to
specifically enforce the terms of the merger agreement.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_091"></A>Amendments;
Waivers</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
provision of the merger agreement may be amended or waived before the completion of the merger if the amendment or waiver is in
writing and signed, and in the case of an amendment, by each party to the merger agreement.<BR STYLE="clear: both"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_092"></A>THE
VOTING AGREEMENTS</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following is a summary of the material terms and conditions
of the voting agreements. This summary may not contain all the information about the voting agreements that is important to you.
This summary is qualified in its entirety by reference to the voting agreements attached as Annexes B and C to, and incorporated
by reference into, this proxy statement/prospectus. You are encouraged to read the voting agreements in their entirety because
they are the legal documents that governs the matters discussed in the summary below.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_093"></A>Agreement
to Vote and Irrevocable Proxy</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Concurrently with the execution of the merger agreement, the
Company and Newegg entered into voting agreements with certain significant shareholders. The common shares beneficially owned
by these shareholders subject to the voting agreements constituted approximately 89.25% of the total voting power of the issued
and outstanding common shares as of October 23, 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Pursuant to the voting agreements, each shareholder agreed
that, prior to the earlier to occur of the termination of the merger agreement or the completion of the merger (which we refer
to as the expiration date) at any meeting (whether annual or special and each postponement, recess, adjournment or continuation
thereof) of the Company&rsquo;s shareholders, or in connection with any written consent of shareholders, such shareholder shall
(i)&nbsp;appear at such meeting or otherwise cause all of his or her shares as of the date of the voting agreements, and any additional
shares or other equity securities of the Company that such shareholder purchases or with respect to which such shareholder otherwise
acquires sole or shared voting power (including any proxy) after the date of the voting agreements, whether by the exercise of
any options or otherwise, including, without limitation, by gift, succession, in the event of a share split or as a dividend or
distribution of any shares, which, together with the existing shares as of the date of the voting agreements, are referred to
in this proxy statement/prospectus as the voting shares, to be counted as present thereat for purposes of calculating a quorum
and (ii)&nbsp;vote or cause to be voted all of his or her voting shares (A) in favor of each of the proposals described in this
proxy statement/prospectus and (B) against any agreement, transaction or other matter that is intended to, or would reasonably
be expected to, impede, interfere with, delay, postpone, discourage or materially and adversely affect the consummation of the
foregoing proposals. The shareholders also agreed that they will not take or commit or agree to take any action inconsistent with
the foregoing.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, each shareholder appointed Newegg and any of its
designees with full power of substitution and resubstitution, as such shareholder&rsquo;s true and lawful attorney and irrevocable
proxy, to the fullest extent of such shareholder&rsquo;s rights with respect to the voting shares, to vote and exercise all voting
and related rights, including the right to sign such shareholder&rsquo;s name (solely in its capacity as a shareholder) to any
shareholder consent, if such shareholder is unable to perform or otherwise does not perform his, her or its obligations under
the voting agreements with respect to such voting shares, solely with respect to the proposal set forth above. Such irrevocable
proxy shall automatically terminate on the expiration date.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_094"></A>Transfer
Restrictions</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Each shareholder also agreed that he or she will not, prior
to the expiration date, directly or indirectly, (i) sell, assign, transfer, tender, or otherwise dispose of (including, without
limitation, by the creation of any liens) any voting shares, (ii) deposit any voting shares into a voting trust or enter into
a voting agreement or similar arrangement with respect to such voting shares or grant any proxy or power of attorney with respect
thereto (other than the voting agreements), (iii) enter into any contract, option, commitment or other arrangement or understanding
with respect to the direct or indirect sale, transfer, assignment or other disposition of (including, without limitation, by the
creation of any liens) any voting shares, or (iv) take any action that would make any representation or warranty of such shareholder
contained in the voting agreements untrue or incorrect or have the effect of preventing or disabling such shareholder from performing
such shareholder&rsquo;s obligations under the voting agreements.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Notwithstanding the foregoing, each shareholder may make
(i) transfers by will or by operation of law or other transfers for estate-planning purposes, in which case the voting
agreements shall bind the transferee, (ii) with respect to such shareholder&rsquo;s options, if any, which expire on or prior
to the expiration date, a transfer, sale, or other disposition of voting shares to the Company as payment for
the&nbsp;exercise price of such shareholder&rsquo;s options and taxes applicable to the exercise of such shareholder&rsquo;s
options, (iii) if such shareholder is a partnership or limited liability company, a transfer to one or more partners or
members of such shareholder or to an affiliate of shareholder, or if such shareholder is a trust, a transfer to a
beneficiary, provided that in each such case the applicable transferee has signed another voting agreement in substantially
the form of the voting agreements, (iv) transfers to another holder of our common shares that has signed another voting
agreement in substantially the form of the voting agreements and (v) transfers, sales or other dispositions as Newegg may
otherwise agree in writing in its sole discretion. If any voluntary or involuntary transfer of any voting shares covered by
the foregoing shall occur (including a transfer or disposition permitted by the foregoing, sale by a shareholder&rsquo;s
trustee in bankruptcy, or a sale to a purchaser at any creditor&rsquo;s or court sale), the transferee shall take and hold
such voting shares subject to all of the restrictions, liabilities and rights under the voting agreements, which shall
continue in full force and effect, notwithstanding that such transferee is not a party to the voting agreements and has not
executed a counterpart or joinder thereto.&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_095"></A>Agreement
to Convert Class B Common Shares</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Pursuant to a voting agreement, Hangzhou Lianluo has also agreed
(i) to convert each Class B common share that it holds into one Class A common share immediately prior to completion of the merger
and (ii) that the warrant contained in Section 4(j) of the share purchase agreement, dated as of April 28, 2016, between the Company
and Hangzhou Lianluo, shall become a warrant to acquire 125,000 Class A common shares at a purchase price of $17.6 per share.
Following the redesignation, this warrant will be exercisable for common shares.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_096"></A>PROPOSAL
II: THE DISPOSITION</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_097"></A>Description
of the Proposed Disposition</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Beijing
Fenjin Times Technology Development Co., Ltd., or the Purchaser, is a limited liability company existing under the laws of the
People&rsquo;s Republic of China. Pursuant to the disposition agreement, the Purchaser will acquire 100% of the equity interests
in Lianluo Connection for RMB0 immediately following completion of the merger. In exchange for all of the equity interests in
Lianluo Connection, the Purchaser agreed to contribute RMB87.784 million to Lianluo Connection&rsquo;s registered capital by September
23, 2023 in accordance with the articles of association of Lianluo Connection. In addition, as an inducement for the Purchaser
entering into the disposition agreement, the Company agreed to convert the indebtedness in the aggregate amount of $11,255,188.47
that Lianluo Connection owes to the Company into additional paid-in capital of Lianluo Connection immediately prior to the closing
of the disposition.</FONT> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_098"></A>Reasons
and Background for the Proposed Disposition</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company, through its wholly owned PRC subsidiaries, has been engaged in the medical device business. The Company develops and
distributes medical devices, with a focus on sleep respiratory solutions to OSAS since 2010. Starting from 2018, the Company has
been providing examination services to hospitals and medical centers through its proprietary medical wearable devices, and doctors
are able to refer to examination results provided by such devices in making diagnoses regarding OSAS.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has incurred significant operating losses for the past five years. For the years ended December 31, 2015, 2016, 2017,
2018 and 2019, the Company incurred operating losses of approximately $6.9 million, $9.1 million, $5.1 million, $9.3 million and
$3.8 million. As of December 31, 2019, the Company had an accumulated deficit of approximately $44.6 million and negative shareholders&rsquo;
equity of approximately $1.3 million. In addition, in 2019, the Company terminated the employment of over fifty employees and
had only 28 employees as of December 31, 2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> On September 11, 2019, we received a notification letter
from the NASDAQ Listing Qualifications Staff of NASDAQ notifying us that the minimum bid price per share for our common shares
had been below $1.00 for a period of 30 consecutive business days, and therefore, we no longer met the minimum bid price requirement
set forth in NASDAQ Listing Rule 5550(a)(2). We were granted a compliance period of 180 days, or until March 9, 2020 to regain
compliance. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 10pt">On January 2, 2020, we received
another notification letter from the NASDAQ Listing Qualifications Staff notifying us that we no longer complied with the minimum
of $2.5 million in stockholders&rsquo; equity for continued listing on the NASDAQ Capital Market under NASDAQ&rsquo;s Listing
Rule 5550(b)(1) and that we also did not comply with either of the two alternative standards of Listing Rule 5550(b), the market
value standard and the net income standard. We thereafter submitted a plan to regain compliance with NASDAQ&rsquo;s applicable
listing standards. On March 10, 2020, in consideration of our recent three financings, from which we received gross proceeds of
approximately $8.08 million, the NASDAQ Listing Qualifications Staff determined that we comply with the stockholders&rsquo; equity
requirement set forth in Listing Rule 5550(b)(1). On the same date, given that except the minimum bid price requirement, we met
all other applicable requirements for initial listing on the NASDAQ Capital Market, the NASDAQ Listing Qualifications Staff recognized
our intention of curing the bid price deficiency by effecting a reverse stock split, and granted a second compliance period of
180 days, or until September 8, 2020, to regain compliance. The second compliance period was thereafter extended to November 20,
2020 by NASDAQ per SR-NASDAQ-2020-021. On October 21, 2020, we effectuated a share combination of our common shares at a ratio
of one-for-eight in order to increase the per share trading price of our Class A common shares to satisfy the $1.00 minimum bid
price requirement</FONT>. <FONT STYLE="font-size: 10pt">We regained the compliance with the minimum bid price rule on November
10, 2020. However, there is no assurance that we will be able to continue to maintain our compliance with the NASDAQ continued
listing requirements. If we fail to do so, our Class A common shares may lose their status on NASDAQ Capital Market and they would
likely be traded on the over-the-counter market. </FONT> </P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Given
the significant amount of liabilities incurred by our medical device business, the board decided that a plausible way to return
to profitability and maintain our NASDAQ listing status is to dispose of the medical device business and concurrently complete
the merger with Newegg. Since December 2019, we had been searching for a suitable buyer for our medical device business. In or
about March 2020, we started discussion with the Purchaser concerning sale of the medical device business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">After
intensive negotiations, the parties agreed on the principal terms of the proposed transaction and entered into the
disposition agreement on October 23, 2020. The terms of the disposition agreement are described in greater detail in the
section below entitled &ldquo;The Disposition Agreement.&rdquo;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_099"></A>Reports,
Opinions and Appraisals</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company engaged Benchmark to render an opinion as to whether
the disposition consideration&nbsp;to be received by the Company is fair to the Company&rsquo;s shareholders from a financial point
of view. The Company decided to engage Benchmark as the Company determined that Benchmark has substantial experience in similar
matters. Benchmark rendered its written opinion to the board of directors on October 23, 2020 that the disposition consideration
to be received by the Company was fair to the Company&rsquo;s shareholders from a financial point of view.&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company paid an aggregate cash fee of $100,000 to Benchmark
for its opinion and has obtained consent from Benchmark for the use of its fairness opinions in this proxy statement/prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Benchmark&rsquo;s
opinion was provided to the directors for their assessment of the disposition and only addressed the fairness to the Company&rsquo;s
shareholders, from a financial point of view, of disposition consideration to be received by the Company pursuant to the disposition
agreement as of the date of the opinion and did not address any other aspects or implications of the disposition.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>The
summary of Benchmark&rsquo;s opinion below is qualified in its entirety by reference to the full text of the written opinion,
which is included as Annex F to this proxy statement/prospectus. This summary also describes the procedures, assumptions, qualifications
and limitations, and other matters considered by Benchmark in preparing its opinion. However, neither Benchmark&rsquo;s written
opinion nor the summary of its opinion set forth in this proxy statement/prospectus purports to be, or constitutes advice or recommendations
to, any shareholder as to how such shareholder should act or vote with respect to the merger proposal.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
arriving at its opinion, Benchmark reviewed and considered such financial and other matters as it deemed relevant, including,
among other things:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         latest draft of the disposition agreement provided to it on October 16, 2020;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="font-family: Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD>certain information relating to the historical, current and future operations, financial condition and prospects of Lianluo
Connection, made available to it by the Company, including financial statements that included the actual income statements for
the year ending December 31, 2019 and the nine months ending September 30, 2020, a balance sheet as of September 30, 2020, and
a financial model with projected income statements for the calendar years 2020-2023;</TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT>&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">discussions
                                         with certain members of the management of the Company and certain of the Company&rsquo;s
                                         advisors and representatives regarding the business, operations, financial condition
                                         and prospects of the Company, the disposition and related matters;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                         certificate addressed to it from senior management of the Company which contains, among
                                         other things, representations regarding the accuracy of the information, data and other
                                         materials (financial or otherwise) provided to, or discussed with, it by or on behalf
                                         of the Company;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         current and historical market prices for certain of the Company&rsquo;s publicly traded
                                         securities, and the current and historical market prices, trading characteristics and
                                         financial performance of the publicly traded securities of certain other companies that
                                         Benchmark deemed to be relevant;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         publicly available financial terms of certain transactions that Benchmark deemed to be
                                         relevant; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">such
                                         other information, economic and market criteria and data, financial studies, analyses
                                         and investigations and such other factors as Benchmark deemed relevant.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Benchmark
has relied upon and assumed, without independent verification, the accuracy and completeness of all data, material and other information
furnished, or otherwise made available, to it, discussed with or reviewed by it, or publicly available, and do not assume any
responsibility with respect to such data, material and other information. In addition, management of the Company has advised Benchmark,
and Benchmark has assumed, that the financial projections reviewed by it have been reasonably prepared in good faith on bases
reflecting the best currently available estimates and judgments of such management as to the future financial results and condition
of the Company or Lianluo Connection and Benchmark expresses no opinion with respect to such projections or the assumptions on
which they are based. Benchmark has relied upon and assumed, without independent verification, that there has been no change in
the business, assets, liabilities, financial condition, results of operations, cash flows or prospects of the Company or Lianluo
Connection since the respective dates of the most recent financial statements and other information, financial or otherwise, provided
to it that would be material to its analyses or the opinion, and that there is no information or any facts that would make any
of the information reviewed by Benchmark incomplete or misleading. Benchmark has further relied upon the assurance of the management
of the Company that they are unaware of any facts that would make the information provided to Benchmark incomplete or misleading
in any material respect. In connection with its review and arriving at its opinion, Benchmark did not assume any responsibility
for the independent verification of any of the foregoing information and relied on the completeness and accuracy as represented
by the Company. In addition, Benchmark has relied upon and assumed, without independent verification, that the final form of the
disposition agreement will not differ in any material respect from the latest draft of the disposition agreement provided to it
as identified above. In addition, Benchmark did not make any independent evaluation or appraisal of the assets or liabilities
of the Company or Lianluo Connection nor was Benchmark furnished with any such independent evaluations or appraisals. The opinion
is necessarily based upon financial, economic, market and other conditions as they existed on, and should be evaluated as of,
the date thereof. Although subsequent developments might affect the opinion, Benchmark does not have any obligation to update,
revise or reaffirm its opinion.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Benchmark has assumed that the disposition will be consummated
on terms substantially similar to those set forth in the disposition agreement identified above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Benchmark
has not been requested to, and did not, (a) initiate or participate in any discussions or negotiations with, or solicit any indications
of interest from, third parties with respect to the merger, the securities, assets, businesses or operations of the Company or
Lianluo Connection or any other party, or any alternatives to the disposition, (b) negotiate the terms of the disposition, or
(c) advise the board or any other party with respect to alternatives to the disposition. The opinion is provided for the benefit
of the board (solely in their capacities as such) and is not for the benefit of, and may not be used for any other purpose and
does not constitute a recommendation to the shareholders of the Company as to how to vote or act with respect to the merger or
otherwise.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the ordinary course of its business, Benchmark may have actively traded the equity or debt securities of the Company and may continue
to actively trade such equity or debt securities. In addition, certain individuals who are employees of, or are affiliated with,
Benchmark may have in the past and may currently be shareholders of the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Summary
of Financial Analysis</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following is a summary of the analyses performed by Benchmark in connection with its opinion. The analyses and factors described
below must be considered as a whole; considering any portion of such analyses or factors, without considering all analyses and
factors, could create a misleading or incomplete view of the process underlying Benchmark&rsquo;s opinion. Some of the summaries
of the financial analyses include information presented in tabular format. The tables are not intended to stand alone, and in
order to more fully understand the financial analyses used by Benchmark, the tables must be read together with the full text of
each summary. Considering the data set forth below without considering the full narrative description of the financial analyses,
including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Benchmark&rsquo;s
financial analyses.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Benchmark
completed a series of financial analyses to derive a range of potential equity values for Lianluo Connection. Benchmark&rsquo;s
financial analysis employed three methodologies, with no particular weight given to any:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">selected
                                         public company analysis;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">precedent
                                         transaction analysis; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">discounted
                                         cash flow analysis.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Valuation
Summary</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Based on its analysis, the estimated equity value of Lianluo
Connection ranges from RMB(100.6) million to RMB1.42 million. This range is based on the following, among other factors:</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         comparative values of medical equipment companies focused on sleep monitoring, respiratory
                                         and/or cardio products</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         comparative values of recent M&amp;A transactions involving similar medical equipment
                                         companies</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Lianluo
                                         Connection&rsquo;s financial forecast for 2020-2023</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         results of the Selected Public Company Analysis, Precedent Transaction Analysis, and
                                         Discounted Cash Flow Analysis</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Estimated
Value of Lianluo Connection</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 10pt"><B>Valuation Methodology</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Range (RMB)</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 76%; text-align: left"><FONT STYLE="font-size: 10pt">Selected Public Company Analysis</FONT></TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">603,578</FONT></TD>
    <TD STYLE="width: 1%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">1,407,214</FONT></TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Precedent Transaction Analysis</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">425,704</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">1,422,583</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Discounted Cash Flow Analysis</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">286,269</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">399,278</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Range</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">286,269</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">1,422,583</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Unpaid Registered Capital</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-87,784,000</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Working Capital Deficit</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-13,057,176</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Equity Value</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-100,554,907</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">1,422,583</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
compares to a net consideration of RMB (0.5) million to RMB 26.7 million to be received by Lianluo Connection</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 10pt"><B>Consideration from Transaction</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Range (RMB)</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 76%; text-align: left"><FONT STYLE="font-size: 10pt">Purchase Price</FONT></TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD>
    <TD STYLE="width: 1%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Unpaid Registered Capital</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">87,784,000</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Working Capital Deficit</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">13,057,176</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Inter-company Debt Not Assumed by the Purchaser </FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-73,545,628</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Transaction-related Expenses</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-1,000,000</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-1,000,000</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Net Consideration </FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-1,000,000</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">26,295,548</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Selected
Public Company Analysis</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Benchmark
analyzed the valuation of publicly-listed medical equipment companies with a focus on sleep monitoring, respiratory and/or cardio
products. Its analysis of Lianluo Connection&rsquo;s valuation included the following eight companies, none of which is identical
to Lianluo Connection: Andon Health A, Compumedics, Inogen, Itamar Medical, Natus Medical, NeuroMetrix, Nihon Kohden and SomnoMed.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 2020 </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 2021 </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left"> Selected Public Companies&rsquo; Average EV/Revenue </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; text-align: right"> 2.55 </TD><TD STYLE="width: 1%; text-align: left"> x </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; text-align: right"> 1.76 </TD><TD STYLE="width: 1%; text-align: left"> x </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Lianluo Connection Revenue (RMB) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 231,102 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 792,488 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left"> Enterprise Value (RMB) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 588,253 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1,391,889 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-style: italic; text-align: left; padding-bottom: 1.5pt"> Plus </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Cash (RMB) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 15,325 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 15,325 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-style: italic; text-align: left"> Minus </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Debt (RMB) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Unpaid Registered Capital (RMB) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> -87,784,000 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> WC Deficit (RMB) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> -13,057,176 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt"> Equity Value (RMB) </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> -100,237,599 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> 1,407,214 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Source:
FactSet; the Company</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The individual EV/Revenue calculations
for each of the selected public companies are as follows: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1.5pt solid"> Company Name </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> EV/Revenue (2020) </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> EV/Revenue (2021) </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: justify"> Andon Health A </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; text-align: right"> 3.08 </TD><TD STYLE="width: 1%; text-align: left"> x </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; text-align: right"> &nbsp; </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> Compumedic </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2.35 </TD><TD STYLE="text-align: left"> x </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> Inogen </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.26 </TD><TD STYLE="text-align: left"> x </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.31 </TD><TD STYLE="text-align: left"> x </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> Itamar Medical </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 7.38 </TD><TD STYLE="text-align: left"> x </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> Natus Medical </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.39 </TD><TD STYLE="text-align: left"> x </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> NeuroMetrix </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.31 </TD><TD STYLE="text-align: left"> x </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> Nihon Kohden </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.47 </TD><TD STYLE="text-align: left"> x </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.40 </TD><TD STYLE="text-align: left"> x </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> SomnoMed </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.13 </TD><TD STYLE="text-align: left"> x </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2.56 </TD><TD STYLE="text-align: left"> x </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Precedent
Transaction Analysis</I></FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Benchmark
analyzed the valuation of M&amp;A transactions completed over the last three years involving medical equipment companies with
focus on sleep monitoring, respiratory and/or cardio products. Benchmark&rsquo;s analysis included the following five precedent
transactions, none of which is identical to Lianluo Connection: Almirall De Mexico, S.A. De C.V., LifeHealthcare Group Ltd., Sarnova,
Inc., Viomedex Ltd., and Vyaire Medical, Inc.</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 2020 </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 2021 </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left"> Precedent Transactions&rsquo; Average EV/Revenue </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; text-align: right"> 1.78 </TD><TD STYLE="width: 1%; text-align: left"> x </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; text-align: right"> 1.59 </TD><TD STYLE="width: 1%; text-align: left"> x </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Lianluo Connection Revenue (RMB) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 231,102 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 792,488 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left"> Enterprise Value (RMB) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 410,379 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1,407,259 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-style: italic; text-align: left"> Plus </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Cash (RMB) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 15,325 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 15,325 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-style: italic; text-align: left"> Minus </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Debt (RMB) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Unpaid Registered Capital (RMB) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> -87,784,000 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> WC Deficit (RMB) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> -13,057,176 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt"> Equity Value (RMB) </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> -100,415,473 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> 1,422,583 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Source:
FactSet; the Company</I></FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The individual EV/Revenue calculations
for each of the selected precedent transactions are as follows: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: justify"> Company Name </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> EV/Revenue </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%; text-align: justify"> Almirall De Mexico, S.A. De C.V. </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; text-align: right"> 3.33 </TD><TD STYLE="width: 1%; text-align: left"> x </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> LifeHealthcare Group Ltd. </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> </TD><TD STYLE="text-align: right"> 1.59 </TD><TD STYLE="text-align: left"> x </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> Sarnova, Inc., </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> </TD><TD STYLE="text-align: right"> 1.63 </TD><TD STYLE="text-align: left"> x </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> Viomedex Ltd. </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.25 </TD><TD STYLE="text-align: left"> x </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"> Vyaire Medical, Inc. </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.09 </TD><TD STYLE="text-align: left"> x </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Generally, the enterprise value is
calculated based on the value as of a specified date of the relevant company&rsquo;s outstanding equity securities, plus the amount
of its net debt (the amount of its outstanding indebtedness, non-convertible preferred stock, capital lease obligations and non-controlling
interests less the amount of cash and cash equivalents on its balance sheet). </P>

<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>Discounted
Cash Flow Analysis</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Benchmark
used a 4-year forecast model for Lianluo Connection (2020-2023) to estimate a range of equity values based on a discounted cash
flow analysis of free cash flows projections as provided by the Company. The key assumptions in its analysis include the following:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Lianluo
                                         Connection net sales of RMB 231,000 in 2020, RMB792,000 in 2021, and declining to RMB
                                         218,000 by 2023;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="font-family: Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD>Discount rates (WACC or Weighted-Average Cost of Capital) ranging from 21.4% to 25.4%</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="font-family: Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9679;</FONT></TD><TD>Terminal value multiplies of 1.78x to 2.55x revenue</TD></TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B>Projected income statements of Lianluo Connection for
the periods indicated below: </B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 5pt">&nbsp;</FONT> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt; text-align: left; font-weight: bold"> Income Statement Projections (Lianluo Connection) </TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center"><P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <B>Q4
                                         2020</B> </P> <P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <B>(RMB)</B> </P></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center"><P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <B>12/31/2021</B> </P> <P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <B>(RMB)</B> </P></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center"><P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <B>12/31/2022</B> </P> <P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <B>(RMB)</B> </P></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center"><P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <B>12/31/2023</B> </P> <P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <B>(RMB)</B> </P></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; font-weight: bold; text-align: left"> Net Sales </TD><TD STYLE="width: 1%; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; font-weight: bold; text-align: right"> 57,170 </TD><TD STYLE="width: 1%; font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; font-weight: bold; text-align: right"> 792,488 </TD><TD STYLE="width: 1%; font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; font-weight: bold; text-align: right"> 494,682 </TD><TD STYLE="width: 1%; font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="width: 9%; font-weight: bold; text-align: right"> 218,117 </TD><TD STYLE="width: 1%; font-weight: bold; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> COGS </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> -39,183 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> -480,451 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> -293,208 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> -167,606 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left"> Gross Margin </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; text-align: right"> 17,987 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; text-align: right"> 312,037 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; text-align: right"> 201,474 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; text-align: right"> 50,510 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> SG&amp;A </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 150,079 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 646,115 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 646,115 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 598,297 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left"> Operating Profit </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; text-align: right"> -132,092 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; text-align: right"> -334,078 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; text-align: right"> -444,641 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; text-align: right"> -547,787 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Non-operating Income (Expenses) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1,579 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> -6,628 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> -6,628 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> -6,628 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold"> EBIT </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; text-align: right"> -130,512 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; text-align: right"> -340,706 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; text-align: right"> -451,269 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; text-align: right"> -554,415 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Provision for Income Taxes </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left"> Net Income </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; text-align: right"> -130,512 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; text-align: right"> -340,706 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; text-align: right"> -451,269 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; text-align: right"> -554,415 </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> ___________ </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Material Assumptions: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 5pt">&nbsp;</FONT> </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> &#9679; </TD><TD> Lianluo Connection will continue its current business
                                         and generate revenues during the above periods through sales of its inventories of medical
                                         devices. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> &#9679; </TD><TD> conversion of the indebtedness of $11,255,188.47 that
                                         Lianluo Connection owes to the Company into additional paid-in capital of Lianluo Connection
                                         immediately prior to the closing of the disposition </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"> <FONT STYLE="font-size: 5pt">&nbsp;</FONT> </P>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Net
Present Value Analysis &ndash; Terminal Value Multiple 2.55x</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 10pt"><B>Discount Rate</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Enterprise Value<BR>
 (RMB)</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Cash/(Net Debt)<BR>
 (RMB)</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Unpaid Registered Capital/WC Deficit<BR>
 (RMB)</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Equity Value<BR>
 (RMB)</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 18%; text-align: right"><FONT STYLE="font-size: 10pt">21.4</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 17%; text-align: right"><FONT STYLE="font-size: 10pt">383,953</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 17%; text-align: right"><FONT STYLE="font-size: 10pt">15,325</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 17%; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 17%; text-align: right"><FONT STYLE="font-size: 10pt">399,278</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">22.4</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">375,413</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">15,325</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">390,738</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">23.4</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">367,159</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">15,325</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">382,483</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">24.4</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">359,178</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">15,325</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">374,503</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">25.4</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">351,461</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">15,325</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">0</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">366,786</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Net
Present Value Analysis &ndash; Terminal Value Multiple 1.78x</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 7pt Times New Roman, Times, Serif"></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 10pt"><B>Discount Rate</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Enterprise Value<BR>
 (RMB)</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Cash/(Net Debt)<BR>
 (RMB)</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Unpaid Registered Capital/WC Deficit<BR>
 (RMB)</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Equity Value<BR>
 (RMB)</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 1%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 18%; text-align: right"><FONT STYLE="font-size: 10pt">21.4</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 17%; text-align: right"><FONT STYLE="font-size: 10pt">294,481</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 17%; text-align: right"><FONT STYLE="font-size: 10pt">15,325</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 17%; text-align: right"><FONT STYLE="font-size: 10pt">-100,841,176</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 17%; text-align: right"><FONT STYLE="font-size: 10pt">-100,531,371</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">22.4</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">288,297</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">15,325</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">-100,841,176</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">-100,537,555</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">23.4</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">282,318</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">15,325</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">-100,841,176</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">-100,543,533</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">24.4</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">276,537</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">15,325</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">-100,841,176</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">-100,549,314</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">25.4</FONT></TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">270,944</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: right"><FONT STYLE="font-size: 10pt">15,325</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">-100,841,176</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: right"><FONT STYLE="font-size: 10pt">-100,554,907</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_100"></A>Effect
on the Company if the Disposition is Not Completed</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the disposition is not approved by the shareholders or if the disposition is not completed for any other reason, the Company will
remain a public company, and Lianluo Connection will continue to be the sole subsidiary of the Company. In addition, our management
expects that the business will be operated as how it is currently being operated until we pursue another strategic alternative,
and that our shareholders will continue to be subject to the same risks and opportunities to which they are currently subject.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_101"></A>Interests
of Directors and Executive Officers in the Proposed Disposition</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s directors and executive officers do not presently have any interest in the disposition that is not shared with
the shareholders of the Company.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_102"></A>No
Appraisal or Dissenters&rsquo; Rights</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
BVI law, shareholders will not be entitled to appraisal or dissenters&rsquo; rights in connection with the disposition.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_103"></A>Vote
Required</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Assuming
that a quorum is present, the affirmative vote of both (i) a majority of the votes cast at the special meeting and (ii) a majority
of votes cast at the special meeting which are not beneficially owned by Hangzhou Lianluo is required to approve the disposition
proposal.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_104"></A>Recommendation
of the Board</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Each of the special committee and our board of directors unanimously
determined that the disposition agreement and the transactions contemplated thereby are advisable and fair to and in the best
interests of shareholders and unanimously recommended that shareholders vote &ldquo;FOR&rdquo; the disposition proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_105"></A>THE
DISPOSITION AGREEMENT</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following is a summary of the material terms and conditions of the disposition agreement, which is attached as Annex E to this
proxy statement/prospectus and is incorporated by reference herein. This summary does not purport to be complete and may not contain
all of the information about the disposition agreement that is important to you. You are encouraged to read the disposition agreement
in its entirety because it is the legal document that governs the matters discussed in the summary below.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_106"></A>The
Disposition</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
the closing and subject to and upon the terms and conditions of the disposition agreement, the Company will sell, transfer, convey,
assign and deliver to the Purchaser, and the Purchaser will purchase, acquire and accept from the Company, all of the equity ownership
and all relevant rights and interests of Lianluo Connection (which we refer to as the equity interests), free and clear of all
liens.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
exchange for the equity interests, the Purchaser agreed to contribute RMB87.784 million to Lianluo Connection&rsquo;s registered
capital by September 23, 2023 in accordance with the articles of association of Lianluo Connection. In addition, as an inducement
for the Purchaser entering into the disposition agreement, the Company agreed to convert the indebtedness in the aggregate amount
of $11,255,188.47 that Lianluo Connection owes to the Company into additional paid-in capital of Lianluo Connection immediately prior
to the closing of the disposition.</FONT> </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_107"></A>Representations
and Warranties</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
disposition agreement contains certain representations and warranties made by the Purchaser, the Company and Lianluo Connection.
These representations and warranties relate to, among other things:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">due
                                         organization and good standing of each party;</FONT></TD></TR></TABLE>

<P STYLE="font-size: 6pt; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">authorization
                                         and binding agreement;</FONT></TD></TR></TABLE>

<P STYLE="font-size: 6pt; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">government
                                         approval;</FONT></TD></TR></TABLE>

<P STYLE="font-size: 6pt; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">non-contravention;</FONT></TD></TR></TABLE>

<P STYLE="font-size: 6pt; text-align: right; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">access
                                         to information of Lianluo Connection;</FONT></TD></TR></TABLE>

<P STYLE="font-size: 6pt; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">no
                                         obligations or liabilities of the Company relating to Lianluo Connection upon consummation
                                         of the disposition; and</FONT></TD></TR></TABLE>

<P STYLE="font-size: 6pt; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         Company&rsquo;s good tile of the equity interests.</FONT></TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_108"></A>Closing
Conditions</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
obligation of each of the Purchaser, the Company and Lianluo Connection to complete the disposition is subject to the fulfillment
(or waiver, to the extent permissible under applicable law) of the following conditions:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">obtaining
                                         any requisite regulatory approvals;</FONT></TD></TR></TABLE>

<P STYLE="font-size: 6pt; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">no
                                         law or order prohibiting or preventing consummation of the disposition;</FONT></TD></TR></TABLE>

<P STYLE="font-size: 6pt; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">no
                                         litigation to enjoy or otherwise restrict consummation of the disposition;</FONT></TD></TR></TABLE>

<P STYLE="font-size: 6pt; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         Company shareholder&rsquo;s approval of the disposition;</FONT></TD></TR></TABLE>

<P STYLE="font-size: 6pt; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         consummation of the merger; and</FONT></TD></TR></TABLE>

<P STYLE="font-size: 6pt; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         conversion of debt that Lianluo Connection owes to the Company into additional paid-in
                                         capital of Lianluo Connection.</FONT></TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_109"></A>Amendment
and Termination</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
disposition agreement may only be amended pursuant to a written agreement signed by the Purchaser and the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
disposition agreement may be terminated prior to the closing date as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">by
                                         mutual written consent of the Purchaser and the Company;</FONT></TD></TR></TABLE>

<P STYLE="font-size: 6pt; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">by
                                         written notice by either the Purchase or the Company if a governmental authority of competent
                                         jurisdiction shall have issued an order or taken any other action permanently restraining,
                                         enjoining or otherwise prohibiting the transactions contemplated by the disposition agreement;</FONT></TD></TR></TABLE>

<P STYLE="font-size: 6pt; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">by
                                         written notice by the Company if the required shareholder approval is not obtained; or</FONT></TD></TR></TABLE>

<P STYLE="font-size: 6pt; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">By
                                         written notice by the Company if the merger is not closed</FONT>. </TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_110"></A>Governing
Law</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
execution, validity, interpretation, performance, implementation and dispute resolution of the disposition agreement is governed
by and construed in accordance with the laws of China. Any dispute arising out of or in connection with the disposition agreement
will be settled by the parties through friendly negotiation. Either party may submit any dispute failing friendly settlement to
competent courts where this disposition agreement is executed.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><A NAME="al_111"></A>PROPOSAL
III: REDESIGNATION</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_112"></A>Purpose and Effect of the
Redesignation</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company is currently authorized to issue a maximum of 6,250,000
common shares of par value of $0.021848 each, of which 4,736,111 are designated as Class A common shares of par value of $0.021848
each and 1,513,889 are designated as Class B common shares of par value of $0.021848 each.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The holder of all of the Company&rsquo;s issued and outstanding
Class B common shares, Hangzhou Lianluo, has agreed (i) to convert each Class B common share that it holds into one Class A common
share immediately prior to completion of the merger and (ii) that the warrant contained in Section 4(j) of the share purchase
agreement, dated as of April 28, 2016, between the Company and Hangzhou Lianluo, shall become a warrant to acquire 125,000 Class
A common shares at a purchase price of $17.6 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As a result of this conversion, the Company will not have any
outstanding Class B common shares or securities convertible into Class B common shares. As a result, each of the special committee
and our board of directors has determined that it is advisable and in the best interests of the Company and its shareholders that
the Company&rsquo;s authorized shares be renamed and redesignated into 6,250,000 common shares of par value of $0.021848
each.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">All of the issued and outstanding awards, including options
and restricted shares, granted by the Company under the Company&rsquo;s currently effective share incentive plans, will entitle
the grantees to such number of common shares equivalent to the number of Class A common shares that these grantees would be entitled
to as originally set out in their relevant award agreement with the Company and the Company shall issue such common shares to
the grantees of such awards granted pursuant to the applicable share incentive plan upon vesting and/or exercise of such awards,
by the grantees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The proposed redesignation will not affect in any way the
validity or transferability of share certificates outstanding, the authorized shares of the Company or the trading of the Company&rsquo;s
common shares on the NASDAQ Capital Market. If the redesignation proposal is approved by our shareholders, it will not be necessary
for shareholders to surrender their existing share certificates. Instead, when certificates are presented for transfer, new certificates
representing common shares will be issued.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If the redesignation proposal is approved, it would
become effective upon the filing of amended and restated memorandum and articles of association with the Registrar of Corporate
Affairs of the British Virgin Islands. See also &ldquo;Proposal VII: Charter Amendment.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_113"></A>Vote Required</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Assuming that a quorum is present, the affirmative vote of
both (i) a majority of the votes cast at the special meeting and (ii) a majority of votes cast at the special meeting which are
not beneficially owned by Hangzhou Lianluo is required to approve the redesignation proposal. In addition, assuming that a
quorum is present, the affirmative vote of a majority of the issued and outstanding Class B common shares entitled to vote and
voting on this proposal at the special meeting is required.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_114"></A>Recommendation of the Board</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Each of the special committee and our board of directors unanimously
recommends a vote &ldquo;FOR&rdquo; approval of the redesignation proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><A NAME="al_115"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">PROPOSAL
IV: SHARE COMBINATION</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_116"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Purpose
of Share Combination</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s Class A common shares are listed on the NASDAQ Capital Market under the trading symbol of &ldquo;LLIT.&rdquo;
It is recognized that, on April 8, 2020, the Company held a special shareholder meeting at which the Company&rsquo;s shareholders
approved a proposal to combine the Company&rsquo;s issued and outstanding common shares at a ratio from one-for-two up to one-for-twenty
to be determined by the board of directors, with a view to regaining compliance with NASDAQ Listing Rule 5550(a)(2) which requires
listed shares to maintain a minimum bid price of $1.00 per share (which we refer to as the bid price rule). In order to regain
compliance with the bid price rule, pursuant to NASDAQ Listing Rule 5810(c)(3)(A), the closing bid price of Class A common shares
should be at least $1.00 for a minimum of ten consecutive business days. On October 21, 2020, we completed a share combination
of our common shares at a ratio of one-for-eight and regained compliance with the bid price rule on November 10, 2020.</FONT> </P>

<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the merger, our board believes that it is advisable and in the best interest of the Company and its
shareholders to effectuate a share combination, for the purpose of enhancing our ability to meet NASDAQ&rsquo;s initial
listing requirements following the completion of merger, including the requirement of a minimum bid price of $4.00 per share
under NASDAQ Listing Rule 5505. NASDAQ rules require the post-merger entity to comply with the initial listing standards of
the applicable NASDAQ market to continue to be listed on such market following a change of control transaction. As a result,
the board is soliciting shareholders&rsquo; approval of a share combination of the Company&rsquo;s common shares at a ratio
of not less than one-for-two and not more than one-for-fifty at any time <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">
no later than June</FONT> 30, 2021, with the exact ratio to be set at a whole number within this range, as determined by our
board of directors in its sole discretion.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our board intends to effect a share combination only if it
believes that a decrease in the number of outstanding common shares is likely to improve the trading price of our common shares
and is necessary to meet initial listing requirements of the NASDAQ Capital Market for the completion of the merger. If shareholders
approve the proposed share combination, it will be effected, if at all, only upon a determination by the board that the share
combination is in the best interests of the Company and its shareholders at that time. The board reserves its right to elect not
to proceed and abandon the share combination if it later determines, in its sole discretion, that implementing this proposal is
not in the best interests of the Company and its shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The board also believes that the delisting of our common shares
from the NASDAQ Capital Market would likely result in decreased liquidity. Such decreased liquidity would result in the increase
in the volatility of the trading price of our common shares, a loss of current or future coverage by certain analysts and a diminution
of institutional investor interest. In addition, the board believes that such delisting could also cause a loss of confidence
of corporate partners, customers and our employees, which could harm our business and future prospects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In evaluating whether or not to conduct the share combination,
the board also took into account various negative factors associated with such corporate action. These factors include: the negative
perception of share combination held by some investors, analysts and other stock market participants; the fact that the share
price of some companies that have effected share combinations has subsequently declined back to pre-combination levels; the adverse
effect on liquidity that might be caused by a reduced number of shares outstanding; and the costs associated with implementing
a share combination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The board considered these factors, the potential harm of being
delisted from the NASDAQ Capital Market and the prospective benefits resulting from the completion of the merger. The board determined
that completion of the merger and continued listing on the NASDAQ Capital Market are in the best interests of the Company and
its shareholders, and that the share combination is probably necessary to consummate the merger and maintain the listing of our
common shares on the NASDAQ Capital Market. As noted above, even if shareholders approve the share combination, the board reserves
the right not to effect the share combination if it no longer believes that a share combination is in the best interests of the
Company and its shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, there can be no assurance that after the share
combination we would be able to consummate the merger or maintain the listing of our common shares on the NASDAQ Capital Market.
Shareholders should recognize that if the share combination is effected, they will own a smaller number of common shares than
they currently own. While we expect that the share combination will result in an increase in the market price of our common shares,
it may not increase the market price of our common shares in proportion to the reduction in the number of common shares outstanding
or result in a permanent increase in the market price (which depends on many factors, including our performance, prospects and
other factors that may be unrelated to the number of shares outstanding).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If the share combination is effected and the market price of
our common shares declines, the percentage decline as an absolute number and as a percentage of our overall market capitalization
may be greater than would occur in the absence of the share combination. Furthermore, the liquidity of our common shares could
be adversely affected by the reduced number of shares that would be outstanding after the share combination. Accordingly, the
share combination may not achieve the desired results that have been outlined above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
board has requested that shareholders approve a combination ratio range, as opposed to approval of a specified combination ratio,
in order to give our board maximum discretion and flexibility to determine the combination ratio based, among other factors, upon
prevailing market, business and economic conditions at the time. No further action on the part of the shareholders will be required
to either effect or abandon the share combination.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_117"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effect
of the Share Combination</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The share combination will reduce the number of issued and
outstanding common shares and the number of common shares that the Company is authorized to issue at the same combination ratio.
In addition, the par value of the common shares will be increased by the same ratio.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For example, if our board implements a one-for-ten share combination
of our common shares, then a shareholder holding 500 common shares, par value $0.021848 per share, before the share combination
would hold 50 common shares, par value $0.21848 per share, after the share combination. However, each shareholder&rsquo;s proportionate
ownership of the issued and outstanding common shares immediately following the effectiveness of the share combination would remain
the same, with the exception of adjustments related to the treatment of fractional shares (see below).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Proportionate
adjustments will also be made based on the ratio of the share combination to the per share exercise price and the number of shares
issuable upon the exercise or conversion of all outstanding options, warrants, convertible or exchangeable securities entitling
the holders to purchase, exchange for, or convert into, our common shares. This will result in approximately the same aggregate
price being required to be paid under such options, warrants, convertible or exchangeable securities upon exercise, and approximately
the same value of common shares being delivered upon such exercise, exchange or conversion, immediately following the share combination
as was the case immediately preceding the share combination.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_118"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fractional
Shares</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company does not currently intend to issue fractional shares in connection with the share combination to the shareholders. If
this proposal is approved by the shareholders at the special meeting, according to Article 3.7 of the Company&rsquo;s amended
and restated memorandum and articles of association, our board has discretionary authority to determine to compulsorily redeem
any fractional shares arising under the share combination so that subsequent to such redemption, the shareholder holds a whole
number of shares. If the board determines to compulsorily redeem such fractional shares, the Company will pay in cash the fair
value of fractions of a share as of the time when such fractions are redeemed. Any shareholder whose fractional shares are redeemed
will be entitled, upon surrendering to the transfer agent the certificates representing such common shares or, in the case of
non-certificated common shares, such proof of ownership as required by the transfer agent, to receive cash (without interest or
deduction) as a result of the redemption. The fair value of fractions will be determined by the board, based on the then prevailing
traded price of the common shares of the Company.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_119"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Procedure
for Implementing the Share Combination</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
soon as practicable after the effective date of the share combination, shareholders will be notified that the share combination
has been effected. The Company expects that its transfer agent, Computershare Limited, will act as transfer agent for purposes
of implementing the exchange of share certificates. If needed, holders of pre-combination shares will be asked to surrender to
the transfer agent certificates representing pre-combination common shares in exchange for certificates representing post-combination
common shares or, in the case of holders of non-certificated shares, such proof of ownership as required by the transfer agent,
in accordance with the procedures to be set forth in a letter of transmittal that the Company will send to its registered shareholders.
No new share certificates will be issued to a shareholder until such shareholder has surrendered such shareholder&rsquo;s outstanding
share certificate(s) together with the properly completed and executed letter of transmittal to the transfer agent.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>SHAREHOLDERS
SHOULD NOT DESTROY ANY SHARE CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY CERTIFICATE(S) UNTIL REQUESTED TO DO SO.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Banks,
brokers or other nominees will be instructed to effect the share combination for their beneficial holders holding shares in &ldquo;street
name.&rdquo; However, these banks, brokers or other nominees may have different procedures from those that apply to registered
shareholders for processing the share combination. If a shareholder holds shares with a bank, broker or other nominee and has
any questions in this regard, shareholders are encouraged to contact their bank, broker or other nominee.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_120"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Federal
Income Tax Consequences of the Share Combination</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
share combination should be a tax-free transaction under the Code. Therefore, a shareholder generally will not recognize gain
or loss on the share combination, except to the extent of cash, if any, received in lieu of a fractional share interest in the
post-combination shares. The holding period and tax basis of the pre-combination common shares will be transferred to the post-combination
common shares (excluding any portion of the holder&rsquo;s basis allocated to fractional shares).</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
discussion should not be considered as tax or investment advice, and the tax consequences of the share combination may not be
the same for all shareholders. Shareholders should consult their own tax advisors to know their individual federal, state, local
and foreign tax consequences.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the proposed share combination is approved, it would become effective after the board determines the combination ratio and upon
the filing of amended and restated memorandum and articles of association reflecting such share combination with the Registrar
of Corporate Affairs of the British Virgin Islands. See also &ldquo;Proposal VII: Charter Amendment.&rdquo;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_121"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Vote
Required</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Assuming
that a quorum is present, the affirmative vote of both (i) a majority of the votes cast at the special meeting and (ii) a majority
of votes cast at the special meeting which are not beneficially owned by Hangzhou Lianluo is required to approve the share combination
proposal.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_122"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recommendation
of the Board</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
board of directors unanimously recommends a vote &ldquo;FOR&rdquo; approval of the share combination proposal.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_123"></A>PROPOSAL
V: SHARE INCREASE</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_124"></A>Purpose
and Effect of the Share Increase</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Following the conversion of all outstanding Class B common
shares and the redesignation, we will be authorized to issue 6,250,000 common shares and will have 3,599,971 common shares
issued and outstanding. Following the share combination, the number of common shares that we will be authorized to issue will
be reduced, which makes it necessary and advisable to increase the number of common shares we are authorized to issue. Pursuant
to the merger agreement, we will issue approximately 363,325,542 common shares to the stockholders of Newegg. At the same time, we
intend to issue additional common shares in connection with a public offering. As a result, the proposed share increase will become
effective prior to and is contingent upon the consummation of the merger.</P>

<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, the board considers that the increase in the number of shares we are authorized to issue will provide the Company with
flexibility for other potential acquisitions and capital raising activities in the future, if any. The Company may seek to complete
additional acquisitions or raise additional capital in the future through the issuance of equity securities, such as common shares
or securities convertible into common shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As a result, each of the special committee and our board of
directors considers it advisable and in the best interests of the Company to approve the share increase proposal which increases
the number of common shares we are authorized to issue to an unlimited number of common shares.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Once
authorized, the additional common shares may be issued with approval of the board, but without further approval of the shareholders,
unless otherwise required by applicable laws. &nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the proposed share increase is approved, it would become effective upon the filing of amended and restated memorandum and articles
of association reflecting such share increase with the Registrar of Corporate Affairs of the British Virgin Islands. See also
&ldquo;Proposal VII: Charter Amendment.&rdquo;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_125"></A>Vote
Required</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Assuming
that a quorum is present, the affirmative vote of both (i) a majority of the votes cast at the special meeting and (ii) a majority
of votes cast at the special meeting which are not beneficially owned by Hangzhou Lianluo is required to approve the share increase
proposal.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_126"></A>Recommendation
of the Board</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Each of the special committee and our board of directors unanimously
recommends a vote &ldquo;FOR&rdquo; approval of the share increase proposal.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_127"></A>PROPOSAL
VI: NAME CHANGE</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_128"></A>Purpose
and Effect of the Name Change</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
board believes that it is necessary and advisable to change the Company&rsquo;s corporate name to &ldquo;Newegg Commerce, Inc.&rdquo;
to better reflect the Company&rsquo;s business following the consummation of the merger.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
board has adopted resolutions approving, and recommends to the shareholders for approval, the name change proposal to change the
Company&rsquo;s name to &ldquo;Newegg Commerce, Inc.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If the proposed name change is approved, it would become effective
upon the filing of amended and restated memorandum and articles of association reflecting such name change and the issuance of
a Certificate of Incorporation on Change of Name by the Registrar of Corporate Affairs of the British Virgin Islands. See also
&ldquo;Proposal VII: Charter Amendment.&rdquo;&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_129"></A>Vote
Required</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Assuming
that a quorum is present, the affirmative vote of both (i) a majority of the votes cast at the special meeting and (ii) a majority
of votes cast at the special meeting which are not beneficially owned by Hangzhou Lianluo is required to approve the name change
proposal.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_130"></A>Recommendation
of the Board</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Each of the special committee and our board of directors unanimously
recommends a vote &ldquo;FOR&rdquo; approval of the name change proposal.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_131"></A>PROPOSAL
VII: CHARTER AMENDMENT</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_132"></A>Purpose
and Effect of Charter Amendment</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our board believes that it is necessary and advisable to
adopt an amended and restated memorandum and articles of association to, among other things, give effect to the
redesignation proposal, the share combination proposal, the share increase proposal and the name change proposal, as well
as certain other amendments described below. A copy of the proposed amended and restated memorandum and articles of
association is attached as Annex G to this proxy statement/prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">In addition to the amendments to give effect to the proposals
described above, the amended and restated memorandum and articles of association amend our current amended and restated memorandum
and articles of association as follows: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Article
                                         8 will be amended to provide for the appointment of directors by Digital Grid and a representative (which we refer to as the
                                         minority representative) of certain legacy stockholders of Newegg (which we refer to
as the legacy shareholders). Initially, four of the directors shall be appointed by Digital
                                         Grid, and three of the directors shall be appointed by the minority representative, with
                                         the number of directors appointed by Digital Grid and the minority representative declining
                                         proportionate to the percentage of shares or other equity interests held by Digital Grid
                                         and its affiliates and the legacy shareholders (in the case of the
                                         minority representative). Any director positions which neither Digital Grid nor the minority
                                         representative are entitled to appoint under the amended and restated memorandum and articles
of association shall be nominated by the directors and appointed by the shareholders, or by any other means allowed under the amended and restated memorandum and articles of association
                                         and the BVI Act. See &ldquo;Description of Securities&mdash;Amended and Restated Memorandum and Articles of Association&mdash;Appointment and Removal of Directors&rdquo; for a complete description of the right to appoint directors.</FONT> </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Article
                                                                                                                                                                                                                                          9.10 will be amended to include certain reserved matters which may not be undertaken by the Company without the approval of
                                                                                                                                                                                                                                          the affirmative vote of not less than a majority of the number of votes represented by the directors, which majority must
                                                                                                                                                                                                                                          include the primary minority board appointee who will initially be Fred Chang. See
                                                                                                                                                                                                                                          &ldquo;Description of Securities&mdash;Amended and Restated Memorandum and Articles of Association&mdash;Requirements of
                                                                                                                                                                                                                                          Board Approval on Certain Matters&rdquo; for a complete description of these reserved matters.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Article
                                         10.5 will be amended to provide that a quorum of the board as to any action of the board
                                         shall consist of (i) at least a majority of the directors (excluding any vacancies),
                                         (ii) at least one director nominated by the minority representative, and (iii) at least
                                         one director nominated by Digital Grid.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Article
                                         10.9 will be amended to provide a mechanism for the selection of the minority representative.
                                         The initial minority representative will be Fred Chang.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Article
                                         23 will be deleted to remove the provisions regarding a business combination of the Company.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
board has adopted resolutions approving, and recommends to the shareholders for approval, the amended and restated memorandum
and articles of association.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the proposed amended and restated memorandum and articles of association are adopted, the amended and restated memorandum and
articles of association would become effective upon the filing with the Registrar of Corporate Affairs of the British Virgin Islands.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_133"></A>Vote
Required</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Assuming
that a quorum is present, the affirmative vote of both (i) a majority of the votes cast at the special meeting and (ii) a majority
of votes cast at the special meeting which are not beneficially owned by Hangzhou Lianluo is required to approve the charter amendment
proposal.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_134"></A>Recommendation
of the Board</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
of the special committee and our board of directors unanimously recommends a vote &ldquo;FOR&rdquo; approval of the charter amendment
proposal.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_135"></A>PROPOSAL
VIII: ADJOURNMENT OF THE SPECIAL MEETING</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_136"></A>Purpose
of Adjournment Proposal</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Shareholders are being asked to approve a proposal that will
give the board of directors authority to adjourn the special meeting one or more times if necessary to solicit additional proxies
if there are not sufficient votes to approve the merger proposal, the disposition proposal, the redesignation proposal, the
share combination proposal, the share increase proposal, the name change proposal or the charter amendment proposal at the time
of the special meeting, or any adjournment or postponement thereof. If this proposal is approved, the special meeting could be
adjourned to any date. Any determination of whether it is necessary to adjourn the special meeting (or any adjournment or postponement
thereof) to solicit additional proxies will be made solely by the Company consistent with the terms of the merger agreement or
with the consent of Newegg.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">If the special meeting is adjourned, shareholders who have
already submitted their proxies will be able to revoke them at any time prior to their use. If you sign and return a proxy and
do not indicate how you wish to vote on any proposal, or if you indicate that you wish to vote in favor of the merger proposal,
the disposition proposal, the redesignation proposal, the share combination proposal, the share increase proposal, the name
change proposal and the charter amendment proposal, but do not indicate a choice on the adjournment proposal, your shares will
be voted in favor of the adjournment proposal. But if you indicate that you wish to vote against the merger proposal, the disposition
proposal, the redesignation proposal, the share combination proposal, the share increase proposal, the name change proposal
or the charter amendment proposal, your shares will only be voted in favor of the adjournment proposal if you indicate that you
wish to vote in favor of that proposal.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_137"></A>Vote
Required</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
affirmative vote of a majority of the votes cast at the special meeting is required to approve the adjournment proposal.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_138"></A>Recommendation
of the Board</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Each of the special committee and our board of directors unanimously
recommends a vote &ldquo;FOR&rdquo; approval of the adjournment proposal.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_139"></A>INFORMATION
ABOUT THE COMPANY</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_140"></A>History
and Development of the Company</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 5, 2001, Beijing Dehaier Technology Company Limited, a PRC company, or BTL, was founded to develop and distribute medical
devices. BTL previously leased some of its property to us and provided certain transportation and repair services to medical devices
for which we were not obligated to perform warranty services, either because the warranty was expired or because the product was
sold by another company. BTL served as the domestic partner to our joint venture pursuant to which we, a BVI company, acquired
100% of Beijing Dehaier, a PRC company in the medical device business. At the time of the formation of the joint venture, foreign
enterprises were not permitted to own such companies without PRC partners.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2003, in order to continue to grow our business, BTL engaged in a corporate restructuring. As a result of those actions, the Company
and Beijing Dehaier were established, and we created the holding company structure.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company was incorporated as an international business company under the International Business Companies Act, 1984, in the BVI
on July 22, 2003 under the name &ldquo;De-Haier Medical Systems Limited&rdquo;. We changed this name to &ldquo;Dehaier Medical
Systems Limited&rdquo; on June 3, 2005, and to &ldquo;Lianluo Smart Limited&rdquo; on November 21, 2016. The Company is a holding
company. As a holding company, the Company does not conduct business in China and instead relies on Lianluo Connection, and prior
to August 2020, Beijing Dehaier, to operate in China.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 24, 2003, we established Beijing Dehaier. Beijing Dehaier conducted a substantial portion of our operations in China
and was responsible for generating a substantial portion of our revenues. Beijing Dehaier was formed as a joint venture between
a Chinese entity, BTL, and a foreign invested enterprise, the Company, in order to allow foreign investments to be used to grow
our business. Because Beijing Dehaier was engaged in an encouraged industry under the Foreign Investment Industrial Guidance Catalogue,
it was allowed to have foreign investments and to be established as a Chinese-foreign equity joint-venture. This structure allowed
Beijing Dehaier access to foreign capital that would not have been available outside of this structure.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Beijing
Dehaier was focused on the development and distribution of medical devices since its inception and began developing its respiratory
and oxygen homecare business in 2006.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 22, 2010, we completed an initial public offering of 1,500,000 common shares. The offering was completed at an issuance
price of $8.00 per share. Prior to the offering, the Company had 3,000,000 issued and outstanding shares, and after the offering,
the Company had 4,500,000 issued and outstanding shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 21, 2014, we and certain institutional investors entered into a securities purchase agreement in connection with an offering,
pursuant to which we agreed to sell an aggregate of 734,700 common shares and warrants to initially purchase an aggregate of 220,410
common shares. The purchase price was $9.12 per common share. The offering closed on February 26, 2014, and the aggregate gross
proceeds from the sale of the common shares, before deducting fees to the placement agent and other estimated offering expenses
payable by us was approximately $6.7 million, not including any proceeds from warrant exercises. The warrants were exercisable
immediately as of the date of issuance at an exercise price of $11.86 per common share and were to expire forty-two months from
the date of issuance. On April 21, 2016, we entered into warrant repurchase agreements with the holders of these warrants and
the placement agent involved in the offering, pursuant to which we agreed to repurchase 293,880 warrants for cash payments equal
to $3.80 per share underlying the warrants. We completed the repurchase of the warrants on June 2, 2016, and as of the date of
this proxy statement/prospectus, all of such warrants have been cancelled.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 14, 2016, we completed an acquisition of 0.8% equity interest of Beijing Dehaier from BTL, at this time the Company held
100% of the equity interest of Beijing Dehaier. This change reflected BTL&rsquo;s reduced reliance on business with Beijing Dehaier
in providing repair and maintenance services. Upon the execution of a loss absorption agreement termination described further
below, we stopped all business activities with BTL as well.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 1, 2016, our board of directors approved the formation of a wholly owned subsidiary, Lianluo Connection, in Beijing,
and thereafter, we finished the related procedures and established Lianluo Connection on June 20, 2016. Lianluo Connection aims
at the development of wearable medical devices and mobile medical products, as well as the provision of relevant technical services.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 22, 2016, we discontinued part of our medical devices business, including assembly and sales of X-ray machines and anesthesia
machines, monitoring devices, general medical products, and oxygen generators.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 28, 2016, we entered into a definitive securities purchase agreement with Hangzhou Lianluo to sell 11,111,111 of our common
shares to Hangzhou Lianluo for an aggregate purchase price of $20 million. The purchase price was $1.80 per share, which represented
a 35% premium to the closing price of our common shares of $1.33 on April 27, 2016. We completed our first closing under the securities
purchase agreement on June 2, 2016, pursuant to which we sold 620,414 common shares for an aggregate purchase price of $1,116,744.
On June 28, 2016, we entered into amendment no. 1 to the securities purchase agreement to extend the closing date from June 30,
2016 to September 30, 2016. On August 18, 2016, we closed the securities purchase agreement, and completed the sale of an aggregate
of $20 million of our common shares and warrants to purchase common shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 31, 2016, Beijing Dehaier entered into a loss absorption agreement termination with the BTL. According to the, the loss absorption
agreement, among Beijing Dehaier, BTL and its shareholders Ping Chen, Bao Xian, Weibing Yang, Jian Sun, Zheng Liu and Yong Wang,
dated as of March 3, 2010, was terminated effective July 31, 2016. There is no relationship between BTL and us, and our other
subsidiaries after the effectiveness of the loss absorption agreement termination.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
November 21, 2016, the Company changed its name from Dehaier Medical Systems Limited to Lianluo Smart Limited, and its NASDAQ
stock ticker from DHRM to LLIT.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On June 8, 2017, the Company held the annual general meeting
to approve the Company&rsquo;s amended and restated memorandum and articles of association in order that the Company&rsquo;s authorized
shares be re-classified and re-designated into 50,000,000 common shares of par value of $0.002731, of which 37,888,889 were designated
as Class A common shares of par value of $0.002731 each and 12,111,111 were designated as Class B common shares of par value of
$0.002731 each.</FONT></P>

<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 14, 2020, we consummated a registered direct offering of 2,590,000 Class A common shares and a concurrent private placement
of warrants to purchase up to 2,590,000 Class A common shares with certain accredited investors. The purchase price per Class
A common share in the registered direct offering was $0.85. The warrants sold in the concurrent private placement are exercisable
for a period of five and one-half years upon issuance, at an initial exercise price of $0.85 per share, which was thereafter adjusted
to $0.6239, subject to full ratchet anti-dilution protection. On February 25, 2020, we consummated a second registered direct
offering of 3,500,000 Class A common shares and a concurrent private placement of warrants to purchase up to 3,500,000 Class A
common shares with the same accredited investors. The purchase price per Class A common share in the second registered direct
offering was $0.70. The warrants sold in the second concurrent private placement are exercisable for a period of five and one-half
years upon issuance, at an initial exercise price of $0.70 per share, subject to full ratchet anti-dilution protection. On March
2, 2020, we consummated a third registered direct offering of 4,900,000 Class A common shares and a concurrent private placement
of warrants to purchase up to 4,900,000 Class A common shares with the same accredited investors. The purchase price per Class
A common share in this registered direct offering was $0.70 per share. The warrants sold in the third concurrent private placement
are exercisable for a period of five and one-half years upon issuance, at an initial exercise price of $0.70 per share, subject
to full ratchet anti-dilution protection.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On August 13, 2020, Lianluo Connection entered into a share
transfer Agreement with China Mine United Investment Group Co., Ltd., or China Mine, pursuant to which Lianluo Connection transferred
its 100% equity interests in Beijing Dehaier to China Mine for cash consideration of RMB 0. In exchange for all of the equity interests
in Beijing Dehaier, China Mine agreed to assume all liabilities of Beijing Dehaier. The board of directors of the Company approved
the transaction after it received a written opinion rendered by Benchmark, the independent financial advisor to the board, to the
effect that, as of the date of such opinion, the consideration to be received by the Company in the sale of Beijing Dehaier is
fair to the Company&rsquo;s shareholders from a financial point of view.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result of the transfer of Beijing Dehaier on August 13, 2020, the Company has one subsidiary, Lianluo Connection, which is wholly
owned by the Company.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On October 21, 2020, we amended and restated our memorandum
and articles of association to complete a share combination of our common shares at a ratio of one-for-eight, which decreased
our outstanding Class A common shares from 17,685,475 shares to 2,210,683 shares and our outstanding Class B common shares from
11,111,111 shares to 1,388,888 shares. This share combination also decreased our authorized shares to 6,250,000 common shares
of par value of $0.021848 each, of which 4,736,111 are designated as Class A common shares and 1,513,889 are designated as Class
B common shares. Accordingly, except as set forth in this section &ldquo;&mdash;History and Development of the Company&rdquo;
or as otherwise indicated, all share and per share information contained in this proxy statement/prospectus has been restated
to retroactively show the effect of this share combination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_141"></A>Business
Overview</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2019, we continued to scale down our operations, and we have discontinued, as appropriate, our unprofitable traditional medical
equipment business. We currently focus on the development, production and marketing of our sleep respiratory analysis system and
cardiopulmonary resuscitation, or CPR, devices.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have developed and distributed medical devices, focusing primarily on sleep respiratory solutions to the Obstructive Sleep Apnea
Syndrome, or OSAS, since 2010. We provide users with medical grade detection and monitoring, long-distance treatment and integration
solution of professional rehabilitation. Since fiscal 2018, we have been providing examination services to hospitals and medical
centers through our developed medical wearable devices. Doctors are able to refer to examination results provided by the device
in making diagnoses regarding OSAS. We have established cooperation with a number of medical check-up centers in China, such as
Meinian Hospital, Ciming Hospital, to reach and serve their clients. The spread of COVID-19 has caused all hospitals and check-up
centers that we have business relationships with to suspend business in February 2020 and, as a result, restricted our rendering
of service. Since March 2020, these hospitals and check-up centers have gradually resumed operations and our service has been
gradually recovering as well.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
design, develop and market our own branded medical products and medical components. We currently concentrate on wearable sleep
respiratory devices and hold two design patents related to sleep respiratory analysis system and a sleep respiratory analysis
software copyright in China.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_142"></A>Our
Products and Services</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
Proprietary Products</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
proprietary product is wearable sleep respiratory devices which are mainly used for hospitals, sleep centers, physical examination
centers and for individuals used at-home. Our management believes that our proprietary products, which are generally more convenient
and effective and less expensive than products from other competitors, tend to be more attractive to hospitals and healthcare
facilities and other end-users for whom effectiveness and price are the significant factors in deciding whether to use our products.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Medical
Devices (Including Related Supporting Products)</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Abdominal
                                         pressure cardiopulmonary resuscitation instrument</B>. We also provide one type of cardiopulmonary
                                         resuscitation, or CPR, instruments.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Sleep
                                         Apnea Diagnostic Products</B>. We have designed and expect to provide two types of screening
                                         and diagnosis products which are portable sleep respiratory recording devices that can
                                         be used in a healthcare facility or in a patient&rsquo;s home to assist physicians in
                                         determining whether the patient has obstructive sleep apnea.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Lean
Business Model with Manufacturing Outsourcing</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">After
our research and development team designs the technical specifications and computer models for our proprietary products, we typically
work with an independent contractor to fabricate working prototypes before we commence with the production run of a product. We
test prototypes to confirm that they operate as expected and with the quality we require. During the prototyping process, we apply
for CFDA approval as necessary. Once both of these processes are completed, we commission a production run of components for incorporating
into our proprietary products.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
now operate on a lean business model with all the manufacture of our products outsourced to third-party producers in China and
closed our assembly facilities in 2018. We depend on product manufacturing and logistical services provided by external vendors.
All of our proprietary products are manufactured by a variety of third-party manufacturers. While these arrangements may lower
operating costs, they also reduce our direct control over production. It is uncertain what effect such diminished control will
have on the quality or quantity of products or services, or on our flexibility to respond to changing conditions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Proprietary
Rights for Our Proprietary Products</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
own a portfolio of intellectual property rights in China in connection with our past and present product offerings. Under the
Lianluo Connection brand, we have been awarded a total of 12 software copyrights for our continuous positive airway pressure devices.
In addition, we currently hold two design patents relating to sleep respiratory analysis system. Moreover, we possess proprietary
technology and know-how in design and engineering. We have not filed for any patent protection outside of China.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
success in the medical equipment industry depends in substantial part on effective management of both intellectual property assets
and infringement risks. In particular, we must be able to protect our own intellectual property as well as minimize the risk that
any of our proprietary products may infringe upon the intellectual property rights of others.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
enter into agreements with all our employees involved in research and development, under which all intellectual property generated
during their employment belongs to us, and they waive all relevant rights or claims to such intellectual property. All our employees
involved in research and development are also bound by a confidentiality obligation and have agreed to disclose and assign to
us all inventions conceived by them during their term of employment.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
part of our overall strategy to protect and enhance the value of our brand, we actively enforce our registered trademark against
any unauthorized use by a third party.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
Distributed Products</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of 2019, we have terminated the business of distributing products for international third parties, and instead, focused on our
proprietary products.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
agency agreement with Timesco Healthcare Ltd., pursuant to which we served as a distributor for it in China for laryngoscopes,
terminated in February 2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
Services</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the OSAS sector, starting from fiscal 2018, we provide technical services in relation to detection and analysis of OSAS. We focused
on the promotion of sleep respiratory solutions and services in public hospitals. Our wearable sleep diagnostic products and cloud-based
services are also available in the medical centers of private preventive healthcare companies in China.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this proxy statement/prospectus, we have partnered with 23 hospitals, 25 distributors and 16 check-up centers over
32 cities across China, such as Beijing, Tianjin, Nanjing, Jinan and Hangzhou, for the sales of medical equipment and for the
provision of OSAS diagnostic services.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
sign service agreements with public hospitals usually for a period of 3 years, and check-up centers usually for a period of one
year or less, with respect to the provision of wearable sleep diagnostic products and cloud-based services and we charge a fixed
technical service fee on a per user basis when our OSAS diagnostic services are provided to the user at medical centers and public
hospitals.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
seek to partner with more hospitals and check-up centers across China and to enlarge the scope of OSAS diagnostic services that
we are able to provide in order to solidify our market position in this area and drive our revenue growth.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
Service Centers</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
maintain a customer service center in Beijing for technical support and repair. We staff our customer service center with senior
technical support engineers who provide preliminary support. Our engineers attempt to quickly diagnose and assist in repairing
problems over the phone or determine whether a service visit to the customer&rsquo;s premises is necessary. In some instances,
our engineers will provide on-site operating guidance and repair service. We periodically review customer calls to ensure that
any issues raised by our customers are resolved to their satisfaction.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_143"></A>Customers</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have three categories of customers: (i) distributors, (ii) hospitals and physical examination centers, and (iii) others to whom
we sell directly. Our customer base is widely dispersed on both a geographic and revenues basis.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Our
distributors</I>. Sales to our distributors make up the substantial majority of our revenues as over 52% of our total revenues
are to distributors. We have contractual distribution relationships with approximately 25 independent distributors. We do not
own, employ or control these independent distributors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Hospital
and physical examination centers customers</I>. Our hospital customers primarily consist of hospitals and private physical examination
centers. We also refer to these customers as our &ldquo;key accounts.&rdquo; Currently, we primarily provide sleep respiratory
apnea analysis products and cloud-based services to hospital customers and we charge a fixed technical service fee on a per user
basis. To obtain orders from such hospital customers, we sometimes enter into a bidding process where medical equipment companies
compete through a state-owned bidding agent.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Dependence
on Major Customers</I>. For the years ended December 31, 2019, 2018 and 2017, approximately 36%, 29% and 56% of our total revenues,
respectively, were received from two largest customers for continuing operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Dependence
on Major Suppliers</I>. For the years ended December 31, 2019, 2018 and 2017, purchases from two largest suppliers for continuing
operations were approximately 100%, 48% and 63% of the total purchases, respectively.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_144"></A>Competition</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
medical device industry is characterized by rapid product development, technological advances, intense competition and a strong
emphasis on proprietary information. Across all product lines and product tiers, we face direct competition from both domestic
and international competitors. We compete based on factors such as price, value, customer support, brand recognition, reputation,
and product functionality, reliability and compatibility. Each of our proprietary products competes against functionally similar
products from domestic and international companies.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
competitors include publicly traded and privately held multinational companies. We believe that we can continue to compete successfully
in China because our established domestic distribution network and customer support and service network allows us significantly
better access to China&rsquo;s small and medium-sized hospitals. In addition, our strong investment in research and development,
coupled with our low-cost operating model, allows us to compete effectively for sales to large hospitals.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe our competitive position in China varies depending on the product in question. While we are a much smaller company overall
than, for example, General Electric, Siemens or Philips and are unable to offer the range or depth of products each of those companies
offers, we believe our market position is favorable in several segments. The following charts provide our marketing department&rsquo;s
estimations of our primary competitors by product, as to our proprietary products:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 28%; border-bottom: black 1.5pt solid"><P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>
        <P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Proprietary
        Product</B></FONT></P></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: bottom; width: 50%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Primary
    Competitors in China</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: center; font: 10pt Times New Roman, Times, Serif; width: 20%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Estimated
    Competitive&nbsp;Position*</B></FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: #CCEEFF">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">DHR
    998 and diagnosis products</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Foreign
    companies such as Philips Respironics, ResMed, and Covidien; Chinese companies like Oranger (Tianjin)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Greater
    than average</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: white">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CPR</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">No
    major competitors</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Average</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
                                         &ldquo;greater than average&rdquo; position indicates that we estimate our competitive
                                         position in the top third of all competitors. &ldquo;Average&rdquo; indicates that we
                                         estimate our competitive position in the middle third of all competitors.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
we expand into international markets, our competitors will include publicly traded and privately held multinational companies
such as Philips Respironics and ResMed. These companies typically focus on the premium segments of the market. We believe we can
successfully penetrate certain international markets by offering products of comparable quality at lower prices. We will also
face competition in international sales from companies that have local operations in the markets in which we sell our proprietary
products. We believe that we can compete successfully with these companies by offering high quality proprietary products at comparable
prices.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_145"></A>Sales
and Marketing</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have a professional sales team of 7 personnel as of December 31, 2019. Our sales team is divided by geographic region and type
of customer. Our sales personnel promote our products in various regions by selling our products to distributors and corporate
customers. We always deliver our products after receiving payment from distributors and settle with our corporate customers pursuant
to the term of contract, which generally ranges from 3 to 7 months. Additionally, we provide sleep respiratory apnea analysis
services to hospitals and physical examination centers. We require settlement of these service fees on a monthly basis. We attend
conferences held by hospitals and medical organizations in various regions on a regular basis. We also set booths to display and
promote our products and services to ensure and improve effectiveness of our sales and marketing activities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">China&rsquo;s
medical device market currently features a significant number of small distributors. For example, China is currently investing
heavily in health care nationwide; however, money for healthcare is currently unevenly distributed. There are a number of large
hospitals that have significant resources and a number of rural clinics that have extremely limited budgets. We are also able
to supply our proprietary products and serve clinics with limited budgets at affordable prices.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have confidence on our well-established distribution channels and market presence. As of the date of this proxy statement/prospectus,
we have partnered with 25 dealers and distributors, 23 hospitals, 16 check-up centers over 32 cities across China. We compete
with other companies by offering effective, convenient and most competitively priced products and services to customers. We are
also continuing our research and development on the sleep respiratory field and continue to seek cooperation and merger and acquisition
opportunities for state-of-the-art technologies and products in the worldwide. Furthermore, being a NASDAQ-listed company has
helped to build our brand image and reputation with potential customer and business partners.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_146"></A>Seasonality</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
generally experience an increase in revenues and tests during March through May and September through December. This is in part
because people tend to have physical check-ups during these months. Our first quarter performance generally declines as a result
of fewer business activities during the Chinese New Year Holiday.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_147"></A>Regulations</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
products are medical devices and are subject to regulatory controls governing medical devices. As a distributor of medical equipment
and supplies, we are subject to regulation and oversight by different levels of the food and drug administration in China, in
particular the CFDA. CFDA requirements include obtaining certifications, permits, compliance with clinical testing standards,
assembly practices, quality standards, applicable industry standards and adverse event reporting, and advertising and packaging
standards. We are also subject to other PRC government laws and regulations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>China&rsquo;s
Regulation of Medical Devices</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Classification
of Medical Devices</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
China, medical devices are classified by the CFDA into three different categories, Class I, Class II and Class III, depending
on the degree of risk associated with each medical device and the extent of control needed to ensure safety and effectiveness.
Classification of a medical device is important because the class to which a medical device is assigned determines, among other
things, whether a company needs to obtain a permit for manufacture, sale, and/or distribution, and the level of regulatory authority
involved in obtaining such permit. Classification of a device also determines the types of registration required and the level
of regulatory authority involved in effecting the product registration.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Class
I devices require product certification, are those with low risk to the human body and are subject to &ldquo;general controls.&rdquo;
Class I devices are regulated by the city level food and drug administration where the company is located. Class II devices are
those with medium risk to the human body and are subject to &ldquo;special controls.&rdquo; Class II devices require product certification,
usually through a quality system assessment, and are regulated by the provincial level food and drug administration where the
company is located. Class III devices are those with high risk to the human body, such as life-sustaining, life-supporting or
implantable devices. Class III devices also require product certification and are regulated directly by the CFDA under the strictest
regulatory control.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
majority of our products are classified as Class II devices. Our products are either classified as Class II or non-categorized
devices.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Assembly
Permit</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
company must obtain a permit from the provincial level food and drug administration before commencing the assembly of Class II
and Class III medical devices. No assembly permit is required for Class I devices, but the company must notify the provincial
level food and drug administration where the company is located and file for recording with it. An assembly permit, once obtained,
is valid for five years and is renewable upon expiration.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have a single assembly permit, which covers all products we assemble and is scheduled to expire on January 30, 2023. We may not
apply to renew our assembly permit upon its expiration, because we have shifted to a lean business model, and currently, outsource
all of our products production.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Distribution
License</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
manufacturer or distributor must obtain a distribution license to engage in sales and distribution of Class II and Class III medical
devices in China. A distribution license is valid for five years and is renewable upon expiration. Lianluo Connection&rsquo;s
distribution license was last renewed on August 29, 2018. If we are unable to renew any of our permits before their respective
expiration dates, we could lose our ability to distribute medical devices until the situation is rectified.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Registration
Requirement for Medical Devices</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Before
a medical device can be manufactured for commercial distribution, a company must complete a medical device registration by proving
the safety and effectiveness of the medical device to the satisfaction of the respective levels of food and drug administration.
In order to conduct a clinical trial on a Class II or Class III medical device, the CFDA requires companies to apply for and obtain
in advance a favorable inspection result for the device from an inspection center jointly recognized by the CFDA and the Administration
of Quality Supervision, Inspection and Quarantine. The application to the inspection center must be supported by appropriate data,
such as animal and laboratory testing results. If the inspection center approves the application for clinical trial, and the respective
levels of the food and drug administration approve the institutions that will conduct the clinical trials, the company may begin
the clinical trial. A registration application for a Class II or Class III device must provide certain pre-clinical and clinical
trial data and information about the device and its components regarding, among other things, device design, production and labeling.
The provincial level food and drug administration, within 60 days of receiving an application for the registration of a Class
II device, or the CFDA, within 90 days of receiving an application for the registration of a Class III device, will notify the
applicant whether the application for registration is approved. If approved, a registration certificate will be issued within
ten days of such written approval. If the relevant food and drug administration requires supplemental information, the approval
process may take much longer. The registration is valid for five years.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
CFDA may at any time change its policies, adopt additional regulations, revise existing regulations or tighten enforcement, each
of which could block or delay the approval process for a medical device.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">T<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">he
following table discloses the current registration expiration dates for the products we currently sell. In the past we have been
able to renew our registration upon expiration. It is the obligation of the producer of the product to seek registration and any
renewals. We are responsible for registering our proprietary products, but must rely on the suppliers of other products to seek
registration for those products where we sell or use non-proprietary products in the assembly of our products.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: left; padding-left: 0; font: 10pt Times New Roman, Times, Serif; white-space: nowrap; width: 61%; text-indent: 0; vertical-align: bottom"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Product
                                         Type</B></FONT></P></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center; white-space: nowrap; width: 17%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Product
    Model</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center; white-space: nowrap; vertical-align: bottom; width: 20%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Expiration
    Date</B></FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <TD STYLE="text-indent: 0; text-align: left; font: 10pt Times New Roman, Times, Serif; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Abdominal
    pressure cardiopulmonary resuscitation (CPR) instrument</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CPR-LW1000</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">December
    20, 2020</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; background-color: white">
    <TD STYLE="text-indent: 0; font: 10pt Times New Roman, Times, Serif; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">DHR998
    Plus (sleep respiratory diagnosis instrument)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">DHR998
    Plus</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">July
    17, 2023</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Continuing
CFDA Regulation</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are subject to continuing regulation by the CFDA. In the event of a significant modification to an approved medical device, its
labeling or production process, a new premarket approval or premarket approval supplement may be required. Our products are subject
to, among others, the following regulations:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CFDA&rsquo;s
                                         quality system regulations, which require companies to create, implement and follow certain
                                         design, testing, control, documentation and other quality assurance procedures;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">medical
                                         device reporting regulations, which require that companies report to the CFDA certain
                                         types of adverse reaction and other events involving their products; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CFDA&rsquo;s
                                         general prohibition against promoting products for unapproved uses.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Class
II and III devices may also be subject to special controls applicable to them, such as supply purchase information, performance
standards, quality inspection procedures and product testing devices which may not be required for Class I devices. We believe
that we are currently in compliance with the applicable CFDA guidelines, but we could be required to change our compliance activities
or be subject to other special controls if the CFDA changes or modifies its existing regulations or adopts new requirements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are also subject to inspection and market surveillance by the CFDA to determine compliance with regulatory requirements. If the
CFDA finds us in violation of its regulations and rules, the agency can institute a wide variety of enforcement actions such as:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">fines,
                                         injunctions and civil penalties;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">recall
                                         or seizure of our products;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         imposition of operating restrictions, partial suspension or complete shutdown of operations;
                                         and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">criminal
                                         prosecution.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Regulations
Relating to Foreign Ownership in the Medical Device Industry</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investment
activities in the PRC by foreign investors are mainly governed by the Guidance Catalog of Industries for Foreign Investment (2017
revision), or the Catalog, which was promulgated jointly by the Ministry of Commerce and the National Development and Reform Commission,
or the NDRC, on June&nbsp;28, 2017 and entered into force on July&nbsp;28, 2017. The Catalog divides industries into four categories
in terms of foreign investment, which are &ldquo;encouraged,&rdquo; &ldquo;restricted,&rdquo; and &ldquo;prohibited,&rdquo; and
all industries that are not listed under one of these categories are deemed to be &ldquo;permitted.&rdquo; Establishment of wholly
foreign-owned enterprises is generally allowed in encouraged and permitted industries. Some restricted industries are limited
to equity or contractual joint ventures, while in some cases Chinese partners are required to hold the majority interests in such
joint ventures. In addition, foreign investment in restricted category projects is subject to government approvals. Foreign investors
are not allowed to invest in industries in the prohibited category. Industries not listed in the Catalogue are generally open
to foreign investment unless specifically restricted by other PRC regulations.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
June 2019, the Ministry of Commerce and NDRC promulgated the Special Management Measures (Negative List) for the Access of Foreign
Investment, or the Negative List, effective July 30, 2019. Foreign investment in the business of manufacturing or import of medical
devices falls outside the Negative List but needs to obtain certain permits.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 15, 2019, the Standing Committee of the National People&rsquo;s Congress passed the Foreign Investment Law of PRC, which
took effect on January 1, 2020, replacing the Law of the People&rsquo;s Republic of China on China-Foreign Equity Joint Ventures,
the Law of the People&rsquo;s Republic of China on Wholly Foreign-Owned Enterprises, and the Law of the People&rsquo;s Republic
of China on China-Foreign Contractual Joint Ventures. On December 26, 2019, the Regulation on the Implementation of the Foreign
Investment Law of the PRC, was issued by the State Council and came into force on January 1, 2020. The new Foreign Investment
Law of PRC, by legislation, officially adopted the administration model of the negative list for foreign investment. A foreign
investor can invest in a field where foreign investment is not prohibited according to the Negative List, as amended. To invest
in a field that requires certain licenses to enter (the License Entry Class), a foreign investor shall apply to relevant administrative
agencies and such agencies shall make a decision whether to grant entry according to laws and regulations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
PRC subsidiary, Lianluo Connection, has been granted necessary permits and licenses by relevant agencies to develop, manufacture,
import and sell Class II and Class III medical devices.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Regulations
Related to Intellectual Property</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Standing Committee of the National People&rsquo;s Congress and the State Council have promulgated comprehensive laws and regulations
to protect trademarks. The&nbsp;<I>Trademark Law of the PRC</I>&nbsp;(2019 revision, effective November 1, 2019) promulgated on
August&nbsp;23, 1982 and subsequently amended on February&nbsp;22, 1993, October&nbsp;27, 2001, August&nbsp;30, 2013 and April
23, 2019 respectively, and the&nbsp;<I>Implementation Regulation of the PRC Trademark Law</I>&nbsp;(2014 revision) issued by the
State Council on August&nbsp;3, 2002 and amended on April&nbsp;29, 2014, are the main regulations protecting registered trademarks.
The Trademark Office under the State Administration for Industry and Commerce administrates the registration of trademarks on
a &ldquo;first-to-file&rdquo; basis and grants a term of ten years to registered trademarks.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The&nbsp;<I>PRC
Copyright Law</I>, adopted in 1990 and revised in 2001 and 2010 respectively, with its implementation rules adopted on August&nbsp;8,
2002 and revised in 2011 and 2013 respectively, and the&nbsp;<I>Regulations for the Protection of Computer Software</I>&nbsp;as
promulgated on December&nbsp;20, 2001 and amended in 2011 and 2013 provide protection for copyright of computer software in the
PRC. Under these rules and regulations, software owners, licensees and transferees may register their rights in software with
the National Copyright Administration Center or its local branches to obtain software copyright registration certificates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>The
Patent Law of the PRC</I>&nbsp;was adopted by the Standing Committee of the National People&rsquo;s Congress in 1984 and amended
in 1992, 2000 and 2008, respectively. A patentable invention, utility model or design must meet three conditions: novelty, inventiveness
and practical applicability. Patents cannot be granted for scientific discoveries, rules and methods for intellectual activities,
methods used to diagnose or treat diseases, animal and plant breeds or substances obtained by means of nuclear transformation.
The Patent Office under the State Intellectual Property Office is responsible for receiving, examining and approving patent applications.
A patent is valid for a term of twenty years for an invention and a term of ten years for a utility model or design, commencing
on the application date. Subject to limited exceptions provided by law, any third-party user must obtain consent or a proper license
from the patent owner to use the patent, or otherwise the use will constitute an infringement of the rights of the patent holder.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Ministry of Industry and Information Technology promulgated the&nbsp;<I>Administrative Measures on Internet Domain Name</I>, or
the Domain Name Measures, on August&nbsp;24, 2017 to protect domain names. According to the Domain Name Measures, domain name
applicants are required to duly register their domain names with domain name registration service institutions. The applicants
will become the holder of such domain names upon the completion of the registration procedure.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have adopted necessary mechanisms to register, maintain and enforce intellectual property rights in China. However, we cannot
assure you that we can prevent our intellectual property from all the unauthorized use by any third party, neither can we promise
that none of our intellectual property rights would be challenged any third party.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Regulations
Related to Employment</I></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The&nbsp;<I>PRC
Labor Law&nbsp;</I>and the&nbsp;<I>Labor Contract Law</I>&nbsp;require that employers execute written employment contracts with
full-time employees. All employers must compensate their employees with wages equal to at least the local minimum wage standards.
Violations of the PRC Labor Law and the Labor Contract Law may result in the imposition of fines and other administrative sanctions,
and serious violations may constitute criminal offences.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December&nbsp;28, 2012, the&nbsp;<I>PRC Labor Contract Law</I>&nbsp;was amended, effective since July&nbsp;1, 2013 to impose more
stringent requirements on labor dispatch. Under such law, dispatched workers are entitled to pay equal to that of full-time employees
for equal work, but the number of dispatched workers that an employer hires may not exceed a certain percentage of its total number
of employees as determined by the Ministry of Human Resources and Social Security. Additionally, dispatched workers are only permitted
to engage in temporary, auxiliary or substitute work. According to the&nbsp;<I>Interim Provisions on Labor Dispatch</I>&nbsp;promulgated
by the Ministry of Human Resources and Social Security on January&nbsp;24, 2014, which became effective on March&nbsp;1, 2014,
the number of dispatched workers hired by an employer shall not exceed 10% of the total number of its employees (including both
directly hired employees and dispatched workers). The&nbsp;<I>Interim Provisions on Labor Dispatch</I>&nbsp;require employers
not in compliance with the&nbsp;<I>PRC Labor Contract Law</I>&nbsp;in this regard to reduce the number of its dispatched workers
to below 10% of the total number of its employees prior to March&nbsp;1,&nbsp;2016.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Enterprises
in China are required by PRC laws and regulations to participate in certain employee benefit plans, including social insurance
funds, namely a pension plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan and
a maternity insurance plan, and a housing provident fund, and contribute to the plans or funds in amounts equal to certain percentages
of salaries, including bonuses and allowances, of the employees as specified by the local government from time to time at locations
where they operate their businesses or where they are located.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">According
to the&nbsp;<I>Interim Regulations on the Collection and Payment of Social Insurance Premiums</I>, the&nbsp;<I>Regulations on
Work Injury Insurance</I>, the&nbsp;<I>Regulations on Unemployment Insurance</I>&nbsp;and the&nbsp;<I>Trial Measures on Employee
Maternity Insurance of Enterprises</I>, enterprises in the PRC shall provide benefit plans for their employees, which include
basic pension insurance, unemployment insurance, maternity insurance, work injury insurance and basic medical insurance. An enterprise
must provide social insurance by making social insurance registration with local social insurance agencies, and shall pay or withhold
relevant social insurance premiums for and on behalf of employees. The&nbsp;<I>Law on Social Insurance of the PRC</I>, which was
promulgated by the Standing Committee of the National People&rsquo;s Congress on October 28, 2010, became effective on July 1,
2011, and was most recently updated on December 29, 2018, has consolidated pertinent provisions for basic pension insurance, unemployment
insurance, maternity insurance, work injury insurance and basic medical insurance, and has elaborated in detail the legal obligations
and liabilities of employers who do not comply with laws and regulations on social insurance.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">According
to the&nbsp;<I>Regulations on the Administration of Housing Provident Fund</I>, which was promulgated by the State Counsel and
became effective on April 3, 1999, and was amended on March 24, 2002 and was partially revised on March 24, 2019 by the&nbsp;<I>Decision
of the State Council on Revising Some Administrative Regulations</I>&nbsp;(Decree No. 710 of the State Council), housing provident
fund contributions by an individual employee and housing provident fund contributions by his or her employer shall belong to the
individual employee. Registration by PRC companies with the applicable housing provident fund management center is compulsory,
and a special housing provident fund account for each of the employees shall be opened at an entrusted bank.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
employer shall timely pay up and deposit housing provident fund contributions in full amount and late or insufficient payments
of such contributions are unlawful. The employer shall make the housing provident fund payment and deposit registrations with
the housing provident fund administration center. With respect to companies which violate the above regulations and fail to complete
housing provident fund payment and deposit registrations or open housing provident fund accounts for their employees, such companies
shall be ordered by the housing provident fund administration center to complete such procedures within a designated time limit.
Those who fail to complete their registrations within the designated period shall be levied a fine ranging from RMB 10,000 to
RMB 50,000. When companies breach these regulations and fail to pay housing provident fund contributions in full amount that are
due, the housing provident fund administration center shall order such companies to pay up within a designated period, and may
further petition a People&rsquo;s Court for mandatory enforcement against those who still fail to comply after the expiry of such
period.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Regulations
on Foreign Currency Exchange</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the&nbsp;<I>PRC Foreign Currency Administration Rules</I>&nbsp;promulgated on January&nbsp;29, 1996 and last amended on August&nbsp;5,
2008 and various regulations issued by SAFE and other relevant PRC government authorities, payment of current account items in
foreign currencies, such as trade and service payments, payment of interest and dividends can be made without prior approval from
SAFE by following the appropriate procedural requirements. By contrast, the conversion of RMB into foreign currencies and remittance
of the converted foreign currency outside the PRC for the purpose of capital account items, such as direct equity investments,
loans and repatriation of investment, requires prior approval from SAFE or its local&nbsp;office.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February&nbsp;13, 2015, SAFE promulgated the&nbsp;<I>Circular on Simplifying and Improving the Foreign Currency Management Policy
on Direct Investment</I>, effective from June&nbsp;1, 2015, which cancels the requirement for obtaining approvals of foreign exchange
registration of inbound foreign direct investment and outbound overseas direct investment from SAFE. The application for the registration
of foreign exchange for the purpose of inbound foreign direct investment and outbound overseas direct investment may be filed
with qualified banks, which, under the supervision of SAFE, may review the application and process the registration.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>The
Circular of the SAFE on Reforming the Management Approach regarding the Settlement of Foreign Capital of Foreign-invested Enterprise,</I>&nbsp;or
SAFE Circular 19, was promulgated on March&nbsp;30, 2015 and became effective on June&nbsp;1, 2015. According to SAFE Circular
19, a foreign-invested enterprise may, according to its actual business needs, settle with a bank the portion of the foreign exchange
capital in its capital account for which the relevant foreign exchange bureau has confirmed monetary contribution rights and interests
(or&nbsp;for which the bank has registered the account-crediting of monetary contribution). For the time being, foreign-invested
enterprises are allowed to settle 100% of their foreign exchange capitals on a discretionary basis; a foreign-invested enterprise
shall truthfully use its capital for its own operational purposes within the scope of business; where an ordinary foreign-invested
enterprise makes domestic equity investment with the amount of foreign exchanges settled, the invested enterprise shall first
go through domestic re-investment registration and open a corresponding Account for Foreign Exchange Settlement Pending Payment
with the foreign exchange bureau (bank) at the place of registration.&nbsp;<I>The Circular of the SAFE on Reforming and Regulating
Policies on the Control over Foreign Exchange Settlement of Capital Accounts,&nbsp;</I>or SAFE Circular 16, was promulgated and
became effective on June&nbsp;9, 2016. According to SAFE Circular 16, enterprises registered in PRC may also convert their foreign
debts from foreign currency into Renminbi at the enterprise&rsquo;s discretion. SAFE Circular 16 provides an integrated standard
for conversion of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign
debts) at the enterprise&rsquo;s discretion, which applies to all enterprises registered in the PRC. SAFE Circular 16 reiterates
the principle that Renminbi converted from foreign currency-denominated capital of a company may not be directly or indirectly
used for purposes beyond its business scope and may not be used for investments in securities or other investment with the exception
of bank financial products that can guarantee the principal within the PRC unless otherwise specifically provided. Besides, the
converted Renminbi shall not be used to make loans for related enterprises unless it is within the business scope or to build
or to purchase any real estate that is not for the enterprise own use with the exception for the real estate enterprise.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January&nbsp;26, 2017, SAFE promulgated the&nbsp;<I>Circular on Further Improving Reform of Foreign Exchange Administration and
Optimizing Genuineness and Compliance Verification,</I>&nbsp;or SAFE Circular 3, which stipulates several capital control measures
with respect to the outbound remittance of profits from domestic entities to offshore entities, including (i)&nbsp;banks must
check whether the transaction is genuine by reviewing board resolutions regarding profit distribution, original copies of tax
filing records and audited financial statements, and (ii)&nbsp;domestic entities must retain income to account for previous years&rsquo;
losses before remitting any profits. Moreover, pursuant to SAFE Circular&nbsp;3, domestic entities must explain in detail the
sources of capital and how the capital will be used, and provide board resolutions, contracts and other proof as a part of the
registration procedure for outbound investment.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 25, 2019, SAFE promulgated the&nbsp;<I>Notice on Further Facilitating Cross-Board Trade and Investment</I>, which became
effective on the same date (except for Article 8.2 thereof). The notice removed restrictions on the capital equity investment
in China by non-investment foreign-invested enterprises. In addition, restrictions on the use of funds for foreign exchange settlement
of domestic accounts for the realization of assets have been removed and restrictions on the use and foreign exchange settlement
of foreign investors&rsquo; security deposits have been relaxed. Eligible enterprises in the pilot areas are also allowed to use
revenues under capital accounts, such as capital funds, foreign debts and overseas listing revenues for domestic payments without
providing materials to the bank in advance for authenticity verification on an item by item basis, while the use of funds should
be true, in compliance with applicable rules and conforming to the current capital revenue management regulations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Regulations
on Foreign Exchange Registration of Overseas Investment by PRC&nbsp;Residents</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SAFE
issued&nbsp;<I>the Circular on Relevant Issues Relating to Domestic Resident&rsquo;s Investment and Financing and Roundtrip Investment
through Special Purpose Vehicles</I>, or SAFE Circular&nbsp;37, which became effective in July&nbsp;2014, to replace the&nbsp;<I>Circular
of the State Administration of Foreign Exchange on Issues Concerning the Regulation of Foreign Exchange in Equity Finance and
Roundtrip Investments by Domestic Residents through Offshore Special Purpose Vehicles</I>, to&nbsp;regulate foreign exchange matters
in relation to the use of special purpose vehicles, or SPVs, by PRC residents or entities to seek offshore investment and financing
or conduct round trip investment in China. SAFE Circular&nbsp;37 defines a SPV as an offshore entity established or controlled,
directly or indirectly, by PRC residents or entities for the purpose of seeking offshore financing or making offshore investment,
using legitimate onshore or offshore assets or interests, while &ldquo;round trip investment&rdquo; is defined as direct investment
in China by PRC residents or entities through SPVs, namely, establishing foreign-invested enterprises to obtain the ownership,
control rights and management rights. SAFE Circular&nbsp;37 stipulates that, prior to making contributions into an SPV, PRC residents
or entities be required to complete foreign exchange registration with SAFE or its local branch. In addition, SAFE promulgated
the&nbsp;<I>Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment
in February&nbsp;2015</I>, which amended SAFE Circular&nbsp;37 and&nbsp;became effective on June&nbsp;1, 2015, requiring PRC residents
or entities to register with qualified banks rather than SAFE in connection with their establishment or control of an offshore
entity established for the purpose of overseas investment or&nbsp;financing.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC
residents or entities who had contributed legitimate onshore or offshore interests or assets to SPVs but had not obtained registration
as required before the implementation of the SAFE Circular&nbsp;37 must register their ownership interests or control in the SPVs
with qualified banks. An amendment to the registration is required if there is a material change with respect to the SPV registered,
such as any change of basic information (including change of the PRC residents, name and operation term), increases or decreases
in investment amount, transfers or exchanges of shares, and mergers or divisions. Failure to comply with the registration procedures
set forth in SAFE Circular&nbsp;37 and&nbsp;the subsequent notice, or making misrepresentation on or failure to disclose controllers
of the foreign-invested enterprise that is established through round-trip investment, may result in restrictions being imposed
on the foreign exchange activities of the relevant foreign-invested enterprise, including payment of dividends and other distributions,
such as proceeds from any reduction in capital, share transfer or liquidation, to its offshore parent or affiliate, and the capital
inflow from the offshore parent, and may also subject relevant PRC residents or entities to penalties under PRC foreign exchange
administration regulations.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Regulations
on Stock Incentive Plans</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">SAFE
promulgated the&nbsp;<I>Notice on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating
in Stock Incentive Plan of Overseas Publicly Listed Company</I>, or the Stock Incentive Plan Notice, in February&nbsp;2012, replacing
the previous rules issued by SAFE in March&nbsp;2007. Pursuant to the Stock Incentive Plan Notice and other relevant rules and
regulations, PRC residents participating in stock incentive plan in an overseas publicly-listed company are required to register
with SAFE or its local branches and follow certain other procedures. Participants of a stock incentive plan who are PRC residents
must conduct the SAFE registration and other procedures with respect to the stock incentive plan through a qualified PRC agent,
which could be a PRC subsidiary of the overseas publicly listed company or another qualified institution appointed by the PRC
subsidiary. In addition, the PRC agent is required to update the relevant SAFE registration should there be any material change
to the stock incentive plan, the PRC agent or other material changes. The PRC agent must, on behalf of the PRC residents who have
the right to exercise the employee stock options, apply to SAFE or its local branches for an annual quota for the payment of foreign
currencies in connection with the PRC residents&rsquo; exercise of the employee stock options. The foreign exchange proceeds received
by the PRC residents from the sale of shares under the stock incentive plans granted and dividends distributed by the overseas
listed companies must be remitted into the bank accounts in the PRC opened by the PRC agents prior to distribution to such PRC&nbsp;residents.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have established a series of share incentive programs under which we issued share options to our PRC directors, officers, and
employees. In 2014, we created the 2014 Share Incentive Plan, which provides that the maximum number of shares authorized for
issuance under this plan shall not exceed ten percent of the number of issued and outstanding shares of company stock as of December
31 of the immediately preceding fiscal year, and an additional number of shares may be added automatically annually to the shares
issuable under the Plan on and after January 1 of each year, from January 1, 2015 through January 1, 2024. The 2014 Share Incentive
Plan shall terminate on the tenth anniversary of its effective date of July 28, 2014, the date when the plan was approved by the
shareholders of the Company. We have advised the recipients of awards under our share incentive plan to handle relevant foreign
exchange matters in accordance with the Stock Incentive Plan Notice. However, we cannot guarantee that all employees awarded equity-based
incentives can successfully register with SAFE in full compliance with the Stock Incentive Plan Notice. See &ldquo;Risk Factors&mdash;Risks
Related to the Business of the Company&mdash;Risks Relating to Doing Business in China&mdash;Any failure to comply with PRC regulations
regarding employee share incentive plans may subject the PRC plan participants or us to fines and other legal or administrative
sanctions.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Regulations
on Dividend Distribution</I></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Distribution
of dividends of foreign investment enterprises are mainly governed by the&nbsp;<I>Foreign Investment Enterprise Law</I>, issued
in 1986 and amended in 2000 and 2016 respectively, and the&nbsp;<I>Implementation Rules</I>&nbsp;under the&nbsp;<I>Foreign Investment
Enterprise Law</I>, issued in 1990 and amended in 2001 and 2014 respectively. Under these regulations, foreign investment enterprises
in the PRC may distribute dividends only out of their accumulative profits, if any, determined in accordance with PRC accounting
standards and regulations. In addition, no less than 10% of the accumulated profits of the foreign investment enterprises in the
PRC are required to be allocated to fund certain reserve funds each year unless these reserves have reached 50% of the registered
capital of the enterprises. A PRC company is not permitted to distribute any profits until any losses from previous fiscal years
have been offset. Profits retained from prior fiscal years may be distributed together with distributable profits from the current
fiscal year. Under our current corporate structure, the Company may rely on dividend payments from Lianluo Connection, which is
a wholly foreign-owned enterprise incorporated in China, to fund any cash and financing requirements we may have. Limitation on
the ability of Lianluo Connection to pay dividends to us could limit our ability to access cash generated by the operations of
those entities. See &ldquo;Risk Factors&mdash;Risks Related to the Business of the Company&mdash;Risks Relating to Doing Business
in China&mdash;Restrictions under PRC law on our PRC subsidiary&rsquo;s ability to make dividends and other distributions could
materially and adversely affect our ability to grow, make investments or acquisitions that could benefit our business, pay dividends
to you, and otherwise fund and conduct our business.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Regulations
on Overseas Listings</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August&nbsp;8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State-owned Assets Supervision and Administration
Commission of the State Council, the State Administration of Taxation, the State Administration for Industry and Commerce, the
CSRC and SAFE, jointly issued the&nbsp;<I>Regulations on mergers and Acquisitions of Domestic Enterprises by Foreign Investors</I>,
or the M&amp;A Rules, which became effective on September&nbsp;8, 2006 and was amended on June&nbsp;22, 2009. The M&amp;A Rules,
among other things, require that (i)&nbsp;PRC entities or individuals obtain Ministry of Commerce approval before they establish
or control a SPV overseas, provided that they intend to use the SPV to acquire their equity interests in a PRC company at the
consideration of newly issued share of the SPV, or Share Swap, and list their equity interests in the PRC company overseas by
listing the SPV in an overseas market; (ii)&nbsp;the SPV obtains the Ministry of Commerce&rsquo;s approval before it acquires
the equity interests held by the PRC entities or PRC individual in the PRC company by Share Swap; and (iii)&nbsp;the SPV obtains
CSRC approval before it lists overseas. See &ldquo;Risk Factors&mdash; Risks Related to the Business of the Company&mdash;Risks
Relating to Doing Business in China&mdash;We may be unable to complete a business combination transaction efficiently or on favorable
terms due to complicated merger and acquisition regulations which first became effective on September 8, 2006.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Dividend
Withholding Tax</I></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
March&nbsp;2007, the National People&rsquo;s Congress enacted the&nbsp;<I>Enterprise Income Tax Law</I>&nbsp;which became effective
on January&nbsp;1, 2008 and last amended on December 29, 2018. The PRC State Council promulgated the&nbsp;<I>Implementation Rules
of the Enterprise Income Tax Law</I>&nbsp;on December 6, 2007, which became effective on January 1, 2008 and was partially amended
on April 23, 2019. According to&nbsp;<I>Enterprise Income Tax Law</I>&nbsp;and its Implementation Rules, dividends payable by
a foreign-invested enterprise in China to its foreign enterprise investors are subject to a 10% withholding tax, unless any such
foreign investor&rsquo;s jurisdiction of incorporation has a tax treaty with China that provides for a preferential withholding
arrangement. Pursuant to the&nbsp;<I>Notice of the State Administration of Taxation on Negotiated Reduction of Dividends and Interest
Rates</I>, issued on January&nbsp;29, 2008 and supplemented and revised on February&nbsp;29, 2008, and the&nbsp;<I>Arrangement
between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Prevention of
Fiscal Evasion with Respect to Taxes on Income</I>, which became effective on December&nbsp;8, 2006 and applicable to income derived
in any year of assessment commencing on or after April&nbsp;1, 2007 in Hong Kong and in any year commencing on or after January&nbsp;1,
2007 in the PRC (as well as four conventions implemented as of June 11, 2008, December 20, 2010, December 29, 2015 and December
6, 2019 between the China mainland and Hong Kong), such withholding tax rate may be lowered to 5% if a Hong Kong enterprise is
deemed the beneficial owner of any dividend paid by a PRC subsidiary by PRC tax authorities and holds at least 25% of the equity
interest in that particular PRC subsidiary at all times within the 12-month period immediately prior to the distribution of the
dividends. Furthermore, pursuant to the&nbsp;<I>Announcement on Issues concerning &ldquo;Beneficial Owners&rdquo; in Tax Treaties</I>&nbsp;issued
on February&nbsp;3, 2018 by the State Administration of Taxation, when determining the status of &ldquo;beneficial owners,&rdquo;
a comprehensive analysis may be conducted through materials such as articles of association, financial statements, records of
capital flows, minutes of board of directors, resolutions of board of directors, allocation of manpower and material resources,
the relevant expenses, functions and risk assumption, loan contracts, royalty contracts or transfer contracts, patent registration
certificates and copyright certificates, etc. However, even if an applicant has the status as a &ldquo;beneficiary owner,&rdquo;
if the competent tax authority finds necessity to apply the principal purpose test clause in the tax treaties or the general anti-tax
avoidance rules stipulated in domestic tax laws, the general anti-tax avoidance provisions shall apply.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Enterprise
Income Tax</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
December&nbsp;2007, the State Council promulgated the&nbsp;<I>Implementing Rules of the Enterprise Income Tax Law</I>, or the
Implementing Rules, which became effective on January&nbsp;1, 2008. The&nbsp;<I>Enterprise Income Tax Law</I>&nbsp;and its relevant
Implementing Rules&nbsp;(i) impose a uniform 25% enterprise income tax rate, which is applicable to both foreign invested enterprises
and domestic enterprises (ii)&nbsp;permits companies to continue to enjoy their existing tax incentives, subject to certain transitional
phase-out rules and (iii)&nbsp;introduces new tax incentives, subject to various qualification criteria.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The&nbsp;<I>Enterprise
Income Tax Law</I>&nbsp;also provides that enterprises organized under the laws of jurisdictions outside China with their &ldquo;de
facto management bodies&rdquo; located within China may be considered PRC resident enterprises and therefore be subject to PRC
enterprise income tax at the rate of 25% on their worldwide income. The Implementing Rules further define the term &ldquo;de facto
management body&rdquo; as the management body that exercises substantial and overall management and control over the production
and operations, personnel, accounts and properties of an enterprise. If an enterprise organized under the laws of jurisdiction
outside China is considered a PRC resident enterprise for PRC enterprise income tax purposes, a number of unfavorable PRC tax
consequences could follow. First, it would be subject to the PRC enterprise income tax at the rate of 25% on its worldwide income.
Second, a 10% withholding tax would be imposed on dividends it pays to its non-PRC enterprise shareholders and with respect to
gains derived by its non-PRC enterprise shareholders from transfer of its&nbsp;shares. Dividends paid to non-PRC individual shareholders
and any gain realized on the transfer of equity by such shareholders may be subject to PRC tax at a rate of 20%, if such income
is deemed to be from PRC sources. See &ldquo;Risk Factors&mdash;Risks Related to the Business of the Company&mdash;Risks Relating
to Doing Business in China&mdash;Under the Enterprise Income Tax Law, we may be classified as a &ldquo;resident enterprise&rdquo;
of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October&nbsp;17, 2017, the State Administration of Taxation issued the&nbsp;<I>Bulletin on Issues Concerning the Withholding of
Non-PRC Resident Enterprise Income Tax at Source,</I>&nbsp;or Bulletin&nbsp;37, which replaced the&nbsp;<I>Notice on Strengthening
Administration of Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprises</I>&nbsp;issued by the State Administration
of Taxation on December&nbsp;10, 2009, and partially replaced and supplemented rules under the&nbsp;<I>Bulletin on Issues of Enterprise
Income Tax on Indirect Transfers of Assets by Non-PRC Resident Enterprises,</I>&nbsp;or Bulletin&nbsp;7, issued by the State Administration
of Taxation on February&nbsp;3, 2015. Under Bulletin&nbsp;7, an &ldquo;indirect transfer&rdquo; of assets, including equity interests
in a PRC resident enterprise, by non-PRC resident enterprises may be re-characterized and treated as a direct transfer of PRC
taxable assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose of avoiding
payment of PRC enterprise income tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise
income tax. In respect of an indirect offshore transfer of assets of a PRC establishment, the relevant gain is to be regarded
as effectively connected with the PRC establishment and therefore included in its enterprise income tax filing, and would consequently
be subject to PRC enterprise income tax at a rate of 25%. Where the underlying transfer relates to the immoveable properties in
China or to equity investments in a PRC resident enterprise, which is not effectively connected to a PRC establishment of a non-resident
enterprise, a PRC enterprise income tax at 10% would apply, subject to available preferential tax treatment under applicable tax
treaties or similar arrangements, and the party who is obligated to make the transfer payments has the withholding obligation.
Pursuant to Bulletin&nbsp;37, the withholding party shall declare and pay the withheld tax to the competent tax authority in the
place where such withholding party is located within 7&nbsp;days from the date of occurrence of the withholding obligation. Both
Bulletin&nbsp;37 and Bulletin&nbsp;7&nbsp;do not apply to transactions of sale of shares by investors through a public stock exchange
where such shares were acquired from a transaction through a public stock exchange. See &ldquo;Risk Factors&mdash;Risks Related
to the Business of the Company&mdash;Risks Relating to Doing Business in China&mdash;We and our shareholders face uncertainties
with respect to indirect transfers of equity interests in PRC resident enterprises or other assets attributed to a Chinese establishment
of a non-Chinese company, or immovable properties located in China owned by non-Chinese companies.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Value-Added
Tax</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the&nbsp;<I>Provisional Regulations on Value-Added Tax of the PRC</I>, or the VAT Regulations, which were promulgated by the
State Council on December&nbsp;13, 1993, and took effect on January&nbsp;1, 1994, and were amended on November&nbsp;10, 2008,
February&nbsp;6, 2016, and November&nbsp;19, 2017, respectively, and the&nbsp;<I>Rules for the Implementation of the Provisional
Regulations on Value Added Tax of the PRC</I>, which were promulgated by the Ministry of Finance, on December&nbsp;25, 1993, and
were amended on December&nbsp;15, 2008, and October&nbsp;28, 2011, respectively, entities and individuals that sell goods or labor
services of processing, repair or replacement, sell services, intangible assets, or immovables, or import goods within the territory
of the People&rsquo;s Republic of China are taxpayers of value-added tax, or VAT. The VAT rate is 17% for taxpayers selling goods,
labor services, or tangible movable property leasing services or importing goods, except otherwise specified; 11% for taxpayers
selling goods, labor services, or tangible movable property leasing services or importing goods, except otherwise specified; 6%
for taxpayers selling services or intangible assets.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
November 2011, the Ministry of Finance and the State Administration of Taxation promulgated the&nbsp;<I>Pilot Plan for Imposition
of Value-Added Tax to Replace Business Tax</I>, or the Pilot Plan. The&nbsp;<I>Notice of the Ministry of Finance and the State
Administration of Taxation on Implementing the Pilot Plan of Replacing Business Tax with Value-Added Tax in an All-round Manner</I>,
issued on March&nbsp;23, 2016, took effect on May&nbsp;1, 2016. Pursuant to the Pilot Plan and the subsequent Notice, VAT at a
rate of 6% is applied nationwide to revenue generated from the provision of certain modern services in lieu of the prior Business
Tax.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">According
to&nbsp;<I>Provisions in the Notice on Adjusting the Value Added Tax Rates</I>, or the Notice, issued by the State Administration
of Taxation and the Ministry of Finance, where taxpayers make VAT taxable sales or import goods, the applicable tax rates shall
be adjusted from 17% to 16% and from 11% to 10%, respectively. The Notice took effect on May&nbsp;1, 2018, and the adjusted VAT
rates took effect at the same time. Pursuant to the&nbsp;<I>Notice of the Ministry of Finance, the State Administration of Taxation
and the General Administration of Customs of the PRC on Relevant Policies for Deepening the Value-Added Tax Reform</I>, which
was promulgated on March 20, 2019 and became effective on April 1, 2019, the tax rate of 16% applicable to the VAT taxable sale
or import of goods by a general VAT taxpayer shall be adjusted to 13%, and the tax rate of 10% applicable thereto shall be adjusted
to 9%.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Other
National and Sub-National Level Laws and Regulations in China</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Beyond
those laws and regulations, we consider material to our business, we are subject to other regulations and laws administered by
governmental authorities at the national, provincial and city levels, some of which are, or may be, applicable to our business.
Our hospital customers are also subject to a wide variety of laws and regulations that could affect the nature and scope of their
relationships with us.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Laws
regulating the conduct of business in our industry cover a broad array of subjects. We must comply with numerous additional state
and local laws relating to matters such as safe working conditions, environmental protection and fire hazard control, which affect
all companies doing business in China. We believe we are currently in compliance with these laws and regulations in all material
respects. We may be required to incur significant costs to comply with these laws and regulations in the future. Unanticipated
changes in existing regulatory requirements or adoption of new requirements could have a material adverse effect on our business,
financial condition and results of operations.</FONT></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_148"></A>Property,
Plant and Equipment</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are headquartered and our executive offices are located at Room 611, 6th Floor, BeiKong Technology Building, No. 10 Baifuquan
Road, Changping District, Beijing 102200, People&rsquo;s Republic of China. The following is a description of our properties,
which we lease from third-parties:</FONT></P>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; border-bottom: Black 1.5pt solid; width: 15%; font-weight: bold; vertical-align: top">Use</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 45%; font-weight: bold">Address</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 21%; font-weight: bold; text-align: left">Rental Term Expiration</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 16%; font-weight: bold">Space</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; text-align: left">Principal Executive Office</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">Lianluo Smart Limited<BR> Room 611, 6th Floor, BeiKong Technology Building, No. 10 Baifuquan
    Road, Changping District, Beijing 102200, China</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; vertical-align: top">November 30, 2020</TD><TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: left">1,172 square feet</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="vertical-align: top; text-align: left">Storage Facility</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">Lianluo Connection<BR> Room 10, Negative Level 1, BeiKong Technology Building, No.&nbsp;10 Baifuquan
    Road, Changping District, Beijing, China</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; vertical-align: top">December 16, 2020</TD><TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: left">323 square feet</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; vertical-align: top">Offices</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">Lianluo Connection<BR> Rooms 611, 612, 618, 619, 6th&nbsp;Floor, BeiKong Technology Building,
    No. 10 Baifuquan Road, Changping District, Beijing, China</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; vertical-align: top">November 30, 2020</TD><TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: left">4,689 square feet</TD></TR>
</TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
our offices, material tangible assets consist of general office equipment as well as equipment used in research &amp; development.
We believe that our current facilities are adequate to meet our ongoing needs and that, and we will be able to obtain additional
facilities on commercially reasonable terms, if additional space is required.</FONT></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_149"></A>Legal
Proceedings&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may be subject to legal proceedings, investigations and claims incidental to the conduct of our business from time to time. Other
than the legal proceedings set forth below, we are currently not aware of any legal proceedings or claims that we believe will
have an adverse effect on our business, financial condition or operating results. None of our directors or members of senior management
or any of our subsidiaries is engaged in any proceeding materially adverse to the Company or any of its subsidiaries.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2019, Beijing Dehaier and Lianluo Connection terminated employment of over 50 employees due to business restructuring. As of December
31, 2019, 34 of these laid-off employees filed complaints with Beijing Changping District Employment Dispute Arbitration Commission
and Beijing Shijingshan District Employment Dispute Arbitration Commission, claiming that Beijing Dehaier and Lianluo Connection
failed to pay them, among others, certain salaries, overtime fees and compensation. As of December 31, 2019, the Arbitration Commissions
issued arbitral awards with respect to 30 of the 34 employees; Beijing Dehaier and Lianluo Connection had paid off 23 of the 30
employees who had applied for enforcement of the arbitral awards and intend to pay the additional seven employees an aggregate
of approximately RMB 310,000 (approximately $44,423) according to entered arbitral awards. As regards the total expenses pertaining
to this lay-off, the Company recorded liabilities of RMB979,716 (approximately $140,393) in employment termination compensations
and RMB2.99 million (approximately $428,467) in unpaid salaries in 2019, of which the Company had paid off RMB3,346,453 (approximately
$475,866) as of June 30, 2020.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2020, Beijing Dehaier and Lianluo Connection terminated the employment of additional 25 employees due to the business downturn.
Most of these former employees filed complaints with Beijing Changping District Employment Dispute Arbitration Commission and
Beijing Shijingshan District Employment Dispute Arbitration Commission, respectively, claiming that Beijing Dehaier and Lianluo
Connection failed to pay them, among others, certain salaries, overtime fees and compensation upon termination. As of June 30,
2020, Beijing Dehaier and Lianluo Connection have entered into settlement agreements with 15 of these former employees and settled
disputes through negotiations with the rest of these employees. The total settlement amount for the 25 employees was RMB3,332,405
(approximately $473,868) and about RMB1,493,225 (approximately $212,337) has been paid off.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 9, 2019, Tianjin Wuqing Bohai Printing Co., Ltd., or Wuqing Bohai, filed an arbitration application with Beijing Arbitration
Commission against Beijing Dehaier, claiming that Beijing Dehaier failed to pay for goods in accordance with purchase contracts
entered into with Wuqing Bohai in 2017 and 2018 and requested Beijing Dehaier to pay Wuqing Bohai an amount of RMB119,770 (approximately
$17,450), plus RMB10,000 (approximately $1,457) to cover the expenses&nbsp;of&nbsp;keeping goods that Beijing Dehaier failed to
accept. On June 5, 2019, Beijing Dehaier submitted an answer to compliant, noting that it had not received some of the goods under
the contracts and Wuqing Bohai failed to provide invoices for some of the goods allegedly received by Beijing Dehaier. Beijing
Dehaier submitted that it should only be responsible for the purchase value of RMB48,450 (approximately $7,059). On March 6, 2020,
the Beijing Arbitration Commission entered an award, ordering that Beijing Dehaier pay Wuqing Bohai the disputed amount of RMB119,770
(approximately $17,203) and an arbitration fee of RMB10,443 (approximately $1,500) by March 24, 2020 and dismissed other claims
of Wuqing Bohai. In May 2020, Beijing Dehaier paid off the disputed amount and the arbitration fee under this case.</FONT></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_150"></A>INFORMATION
ABOUT NEWEGG</FONT></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_151"></A>Overview</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg is a tech-focused e-commerce company in North
America, and ranked second after Best Buy as the global top electronics online marketplace according to Web Retailer&rsquo;s report, as measured by 32.4 million
visits per month in 2019. Through newegg.com and other online platforms, Newegg operates a direct sales and marketplace
models for IT computer components, consumer electronics, entertainment, smart home and gaming products and provides certain
third party logistics services globally. Newegg has received numerous awards and accolades for its services since its
inception, among which, it was ranked No. 5 on Newsweek&rsquo;s 2020 List of Best Online Shops &ndash; Consumer
Electronics.</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_153"></A>The
Newegg Ecosystem</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
takes pride in connecting customers to a wide and increasing selection of tech products and a massive pool of brands, sellers,
suppliers, manufacturers, distributors and third-party service providers. Founded in 2001, Newegg has developed a tech-focused
e-commerce ecosystem that enables all of its participants to discover, engage and transact with each other.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
the nexus of this e-commerce ecosystem, Newegg takes stewardship in continuously growing it and delivering compelling value propositions
to its participants in the long run. On one hand, Newegg provides customers with access to vast, yet curated tech products
sourced globally; on the other hand, Newegg creates value for Newegg&rsquo;s brand partners, Marketplace sellers and suppliers
by connecting them to a wide audience with life-time value. Additionally, Newegg&rsquo;s platforms offer a comprehensive suite
of e-commerce solutions, including product listing, fulfillment, marketing, customer service and other value-added tools and services.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Key
Ecosystem Participants and How Newegg Create Value for Them</I></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
are three key participants of Newegg&rsquo;s ecosystem: the customers, the Marketplace sellers, and the brand partners.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Customers</U></I></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
has built a large, highly engaged and loyal customer base. As of June 2020, Newegg had 3.8 million active customers (defined as
customers who purchased at least one item on out platform in the past 12 months).</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
core customers include both its business-to-consumer, or B2C, customers and Newegg&rsquo;s business-to-business, or B2B, customers.
See &ldquo;&mdash;Newegg&rsquo;s Business Models&rdquo; below for more information about Newegg&rsquo;s B2C and B2B businesses.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
believes that it offers the following compelling value propositions to Newegg&rsquo;s customers:</FONT></P>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Wide
                                         range of tech-focused products.</I> With approximately 32.6 million SKUs and 1,730 categories
                                         as of June 30, 2020, Newegg is a truly one-stop shop for a vast selection of tech products,
                                         ranging from brand-name information technology/consumer electronics, or IT/CE, products
                                         and in-house brands of computer hardware to peripherals under its private labels. Newegg&rsquo;s
                                         extensive product offerings enable it to meet the diverse needs of a group of sophisticated
                                         customers, which is difficult for brick-and-mortar retailers to match due to shelf space
                                         constraints.</FONT></TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Easy
                                         and enjoyable shopping experience. </I></FONT></TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.75in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9675;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Content-rich,
                                         user-friendly interface</I>. Newegg&rsquo;s platforms are user-friendly and easy to navigate,
                                         with features enabling customers to easily discover new products and trends, such as
                                         intelligent product recommendations and curated, personalized content supported by its
                                         data and analytics capabilities. Newegg also empowers customers to make informed purchasing
                                         decisions by offering detailed product information, customer opinions, peer reviews,
                                         product tutorials and the opportunity to network with other members of the Newegg community.
                                         Newegg has in-house video production capabilities that generate original content to engage
                                         and inform customers, and Newegg continues to enhance such capabilities in order to produce
                                         more and better content. Newegg&rsquo;s platforms also provide an extensive portfolio
                                         of user-generated content, including over 4 million product reviews and approximately
                                         32,000 testimonials about people&rsquo;s shopping experience with Newegg as of June 30,
                                         2020.</FONT></TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.75in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9675;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Flexible
                                         payment options</I>. Newegg accepts a variety of payment options and has sought to add
                                         new payment methods to cater to the needs of its customers. Newegg also offers open terms
                                         accounts for business and public sector customers. For example, in response to increasing
                                         customer demand, Newegg introduced the Bitcoin payment solution and Apple Pay in 2014.
                                         See also &ldquo;&mdash;Payment.&rdquo;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.75in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9675;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Timely,
                                         secure and reliable fulfillment</I>. Leveraging its reliable logistics network and infrastructure,
                                         Newegg is able to maintain a high level of shipping accuracy and reliability and timely
                                         delivery. See also &ldquo;&mdash;Logistics and Fulfillment.&rdquo; As of June 30, 2020,
                                         Newegg achieved, for orders directly fulfilled by it, an over 99.9% average accuracy
                                         rate, an over 97.4% 1-business day fulfillment rate in the United States and Canada if ordered
                                         prior to Newegg&rsquo;s 3PM local time order cut-off and a 99.5% 2-business day fulfillment rate
                                         in the United States and Canada.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Vibrant
                                         community of tech-savvy customers</I>. While expanding its range of product offering,
                                         Newegg continues to maintain a large and vibrant community of tech-savvy customers, providing
                                         inspiration for visitors to discover new tech trends and products and valuable decision-making
                                         intelligence typically not found at traditional retailers. Newegg has continued to offer
                                         additional functionalities to foster this community by, for example, launching its YouTube
                                         channel and GameCrate, a virtual community where like-minded tech enthusiasts can share
                                         peer reviews and have questions or concerns addressed by fellow customers, Newegg moderators,
                                         administrators and customer support specialists.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Attractive
                                         pricing</I>. Newegg is able to offer competitive pricing across a broad range of categories
                                         because of Newegg&rsquo;s scale and strong supplier and Marketplace seller relationships
                                         and the ability to maintain a cost-efficient infrastructure. Newegg&rsquo;s experienced
                                         product management team cost-effectively matches demand with supply, minimizing inventory
                                         and allowing it to save infrastructure costs associated with brick-and-mortar retailers.
                                         Newegg is also able to find optimized pricing points by leveraging its data and analytics
                                         capability and by monitoring its major competitors&rsquo; pricing trends.&nbsp;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Marketplace
Sellers</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On the Newegg Marketplace, third-party sellers offer their
products to Newegg&rsquo;s customers through its platforms and pay it commissions on their sales. See &ldquo;&mdash;Newegg&rsquo;s Business
Models&mdash;How Newegg Deliver Newegg&rsquo;s Business Model&mdash;Marketplace&rdquo; for more details. The Newegg Marketplace
had 13,897 (both active and inactive) sellers, approximately 32.5 million SKUs and 1,663 categories as of June 30, 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
is a business enabler for the Newegg Marketplace sellers in many ways. Newegg believes the Marketplace sellers choose its platforms
not just because Newegg offers a forum for them to build online presence, but also because Newegg delivers the following additional
values:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Centralized
                                         location of tech-focused customers</I>. The Newegg Marketplace connects sellers, whether
                                         wholesalers or retailers, to a growing customer base, the majority of whom are tech-savvy,
                                         in more than 20 countries and regions as of September 30, 2020, without expanding their
                                         physical footprint. In particular, the Newegg Marketplace provides smaller vendors and
                                         retailers with access to profitable B2B opportunities that would otherwise be difficult
                                         to reach due to their lack of ability to provide specialized support for organizational
                                         purchasing needs.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Access
                                         to premium e-commerce solutions</I>. Sellers, particularly retailers, generally face
                                         high barriers entering the global market, including logistics and scalable economics.
                                         The Newegg Marketplace addresses these challenges by providing sellers with a comprehensive
                                         suite of e-commerce solutions, including an API-enabled portal, on-site promotions, a
                                         curated marketing program, and fulfillment and delivery services. Particularly, Newegg
                                         provides Marketplace sellers with valuable data insights, which help them to market
                                         their products more effectively, generate additional traffic and increase conversion.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Human
                                         touch.</I> The Newegg Marketplace is a key component of Newegg&rsquo;s ecosystem. Since
                                         Newegg launched the Newegg Marketplace model, Newegg has carefully nurtured Newegg&rsquo;s
                                         relationships with the Newegg Marketplace sellers and have invested in their success,
                                         which Newegg believes drives Newegg&rsquo;s continued growth in the long run. For example,
                                         Newegg assigns dedicated account managers to qualified sellers to help them tackle all
                                         sorts of challenges associated with operating a virtual storefront.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Brand
Partners</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg is a trusted partner and the go-to channel for many
leading tech product brands and is increasingly establishing relationships with brands in a growing number of other product
categories. As of June 30, 2020, Newegg sourced merchandise from over 2,000 brand partners, and the Newegg Marketplace
featured the official online stores of a number of brand partners, including some of the most well-known brands.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
believes it provides the following benefits for Newegg&rsquo;s brand partners:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Access
                                         to a targeted customer base</I>. Enabling brands cost-effectively reach target audiences,
                                         its existing, loyal customer base is highly valued by companies targeting ready-to-buy,
                                         tech-savvy customers and foreign brands seeking to sell products and build brand awareness
                                         in markets in Asia and the Middle East region.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Cost-efficient
                                                                                                                                                                                                                                          distribution channel. </I>Leveraging Newegg&rsquo;s customer friendly online platforms, established logistics network and
                                                                                                                                                                                                                                          infrastructure and extensive e-commerce experience and expertise, Newegg offers to its brand partners efficient and
                                                                                                                                                                                                                                          cost-efficient distribution channels and comprehensive supply chain capabilities, including marketing, warehousing,
                                                                                                                                                                                                                                          fulfillment and customer services;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Brand
                                         building and promotion solutions. </I>Newegg offers its brand partners solutions and
                                         support to run special promotions and targeted marketing and brand-building campaigns
                                         through its platforms utilizing data and interactive media in ways that cannot be achieved
                                         through traditional media. See &ldquo;&mdash;Newegg&rsquo;s Business Models&mdash;Other
                                         Services&mdash;Marketing Services.&rdquo;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Data
                                         insights</I>. Newegg collects insights from its customers&rsquo; interactions with it
                                         through Newegg&rsquo;s analytics and algorithms. Newegg uses these insights, coupled
                                         with customer feedback and Newegg&rsquo;s knowledge of the e-commerce market, to facilitate
                                         its brand partners&rsquo; marketing decision-making.</FONT></TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><A NAME="al_152"></A>Newegg&rsquo;s
Competitive Strengths</B></FONT></P>



<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg believes that it maintains its market leading position
through the following continual refinement of key competitive advantages.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Excellence in supply chain management. </I>Newegg has
adopted cost-effective, automated solutions which provide accuracy and speed. Newegg Logistics&rsquo; third-party logistics
(&ldquo;3PL&rdquo;) service leverages technologies including Bastian&rsquo;s OPEX Perfect Pick and the Pick to Light systems
which are the warehouse solutions that sort, retrieve, and ship products quickly. These warehouse automation systems allow
Newegg to achieve 99+ percent same-day e-commerce fulfillment (defined in this proxy statement/prospectus as the processing
of an order for shipment) and inventory accuracy rates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Growing third-party logistics portfolio.</I> With a
global reach into 2035 countries as of June 30, 2020, Newegg Logistics partners with new and established online sellers to serve their customers
as efficiently and cost-effectively as possible. In early 2020, Newegg added a turnkey customer service outsourcing solution
to its portfolio of 3PL solutions. Newegg Bridge is provided by Newegg Logistics, the company&rsquo;s in-house fulfillment
network. The service offers outsourced dedicated customer service capabilities and complements Newegg&rsquo;s ecosystem of
service offerings, connecting multiple channels including email, phone, chat, text, and social media across multiple
languages.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Industry leading customer service.</I> Newegg&rsquo;s customer
service is well known, consistently earning industry accolades. Its proven track record of delivering excellent customer service
for nearly two decades particularly qualifies Newegg to serve as the customer service gateway for its 3PL clients via its new
Newegg Bridge service.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_154"></A>Newegg&rsquo;s
Growth Strategies</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
goal is to enhance its position as a leading tech-focused e-commerce company and to continue to expand globally and into new related
business. Newegg plans to achieve this through the following:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Further
strengthen its position as a leading tech-focused e-commerce company </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
has cultivated a strong and loyal customer base. Newegg intends to further expand and engage with its customer base by increasing
the efficiency of its platforms and implementing new features to augment its platforms&rsquo; mobile functionality. Newegg also
plans to continue enhancing its award-winning customer service function.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
intends to engage in brand promotion campaigns and other marketing activities across online and offline channels to further drive
its growth and enhance its brand recognition worldwide. Newegg plans to continue engaging its existing customers and reaching
out to new customers utilizing social media, customer interactions on its platforms and offline marketing events in both domestic
and overseas markets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Increase
Newegg&rsquo;s product assortment and introduce new product categories</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
will continue to grow its direct sales and Marketplace business by increasing its product assortment and introducing new product
categories.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
is confident that its suppliers and Marketplace sellers will increase their offerings on its platforms if it continues to
offer a compelling value proposition and further develop its data-led insights, real-time visibility of customer preference
shifts and fulfillment and logistics capabilities. Newegg also intends to attract new third-party sellers to its Marketplace
by providing them with access to its growing customer base, the majority of whom are tech-savvy, and its ancillary e-commerce
solutions. This will enable Newegg to further enhance its sourcing capabilities, expand the diversity and availability of its
merchandise and penetrate into additional IT/CE related categories, such as lifestyle electronics, health tech, tech toys,
maker components and kits and Internet of Things (&ldquo;IoT&rdquo;) products.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Expand
private label business</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
intends to further expand its&nbsp;<I>Rosewill</I> and <I>ABS</I> private label assortment by continuing to offer high
quality, feature rich, value priced products. As of June 30, 2020, private label products (consisting of <I>Rosewill</I> and <I>ABS</I>
products) across all Newegg platforms (Newegg.com, Newegg.ca and NeweggBusiness.com) constituted collectively approximately
0.003% of Newegg&rsquo;s total active SKU count, while products offered by Newegg&rsquo;s Marketplace sellers constituted
99.596% of Newegg&rsquo;s total active SKU count. </FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Newegg plans to further expand its offerings under its<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;<I>Rosewill</I>&nbsp;brand
in targeted categories which it believes provide strong growth potential and higher margins, including DIY components, gaming
accessories, gaming chairs, headsets, home automation and IoT connected devices. Under its&nbsp;<I>ABS</I>&nbsp;brand, its goal
is to continue to drive significant growth in its line of gaming and business grade PCs&rsquo; by leveraging its large audience
of gamers and business customers who seek a high quality, high powered PC. Both brands are offered globally through its cross
border initiative and are expected to be included in future cross border expansion.</FONT> </P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Grow
its small and medium sized business and public sector segments</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg seeks to expand its B2B business by further penetrating
into small- and mid-sized businesses and public sector institutions and continuously enhancing its value proposition tailored to
meet the needs of its target verticals. Newegg plans to offer additional electronic tools and content that allow B2B customers
to troubleshoot issues on their own without having to wait for a customer representative. Newegg is also expanding its broad assortment
of business class products from top brands at competitive prices, which it offers with rapid delivery options and seamless customer
and technical services.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
aims to continue to attract new customers and increase existing customers&rsquo; retention and repeat purchase rates by emphasizing
its personal touch in customer relationships and focusing on comprehensive online and offline marketing campaigns, effective customer
engagement via social media and referrals, deals and promotions and efficient conversion of high-value accounts from <I>Newegg.com</I>.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Further
develop its IT infrastructure and expand globally and into new businesses</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg plans to capitalize on its leading technology and infrastructure
to enter into new markets and new businesses. Newegg expects to further develop its IT infrastructure, and mobile e-commerce platform
to include big data applications, supply chain management systems and AI-driven analytical capabilities by integrating commercial
software packages and open-source components into its software and systems. Newegg also aims to build on its success in select
countries, such as Canada, and apply its model to expand into fast-growing markets where there are attractive opportunities.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Pursue
selective strategic partnership, investments and acquisition opportunities</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg intends to selectively pursue strategic alliances and
strategic partnerships that are complementary to its business and operations, including opportunities that can help Newegg further
promote its brand to new customers, increase its product offerings, improve its technology and fulfillment infrastructure, and
expand its presence to more markets.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Increase
service offerings</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg aims to expand its offering of a variety of value-added
D2C platform services and solutions. It believes by providing these services, Newegg creates additional value for its business
partners and customers and ultimately benefits the Newegg ecosystem and all its participants. Currently, Newegg offers 3PL, including
Shipped by Newegg&reg; Service, Newegg Logistics, Newegg Staffing, Pure Facility Solutions, Inc., Newegg Bridge, a PC Builder tool,
and expects to launch a Newegg personal computer assembly service in the near future.</P>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_155"></A>Newegg&rsquo;s
Business&nbsp;Models</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s primary business model is to help customers find
and purchase their desired products through its platforms. From a customer base and target audience perspective, Newegg categorizes
its business model into B2C and B2B operations. Newegg strives to offer a compelling online shopping experience, reliable and timely
order fulfilment and superior customer service across its B2C and B2B operations through its direct sales, market place and D2C
platform services.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following chart sets forth Newegg&rsquo;s business models:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><IMG SRC="image_003.jpg" ALT=""></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>B2C</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s B2C business model features selling products
directly to consumers. Newegg started as a B2C business since launching Newegg&rsquo;s e-commerce platform in 2001. As of June
30, 2020, Newegg had approximately 35.0 million registered B2C customers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">With a focus on selling IT/CE products, Newegg&rsquo;s B2C business
has expanded to include an increasingly wide range of products, including small home appliances, health &amp; fitness, home living,
sports, personal grooming, drones, auto electronics &amp; parts, etc.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s B2C customers consist primarily of sophisticated
IT professionals, gamers, do-it-yourself tech enthusiasts and early tech adopters who generally occupy a well-educated, affluent,
and IT trendsetting demographic with relatively high purchase frequency and strong willingness to embrace tech trends and try new
products. Newegg believes its success is built upon its ability to cater to the preferences, tastes and habits of this demographic.
As of June 30, 2020, through Newegg&rsquo;s three major platforms, namely <I>Newegg.com</I>, <I>Newegg.ca</I> and <I>Newegg Global</I>,
Newegg served customers in over 20 countries and regions, mostly in Asia and the Middle East region. For details of these platforms,
see &ldquo;&mdash;The Newegg Platforms&mdash;B2C Platforms.&rdquo; Newegg&rsquo;s B2C operations recorded approximately $1.5 billion
for the year ended December 31, 2019 and approximately $1.0 billion for the six months ended June 30, 2020.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>B2B</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Although business customers have been able to shop on its <I>Newegg.com</I>
platform since its launching in 2001, Newegg did not begin focusing on building its B2B operations until 2009 when Newegg launched
<I>NeweggBusiness.com</I>, a dedicated B2B e-commerce platform, to tap into the burgeoning B2B opportunity. With a focus on providing
office and IT equipment, <I>NeweggBusiness.com</I> offers an increasingly extensive assortment, including access to account executives
with expertise in sourcing technology for business and processing industry specific requirements. Newegg&rsquo;s B2B operations
recorded approximately $409.8 million for the year ended December 31, 2019, and approximately $141.0 million for the six months
ended June 30, 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s B2B customers span across a range of verticals,
including healthcare providers, K12 and educational institutions, government agencies, and businesses of all sizes, and its B2B
operations have been focused on providing specialized support for their industry- and business-specific needs. As a major business
development strategy, Newegg focuses its B2B efforts on serving small office / home office, or SOHO, small- and medium-sized businesses,
or SMBs, and private and public sector markets which Newegg believes are underserved by other B2B retailers. As of June 30, 2020,
Newegg had over 550,000 registered accounts on <I>NeweggBusiness.com</I>.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Currently,
while Newegg positions <I>NeweggBusiness.com </I>as its dedicated B2B website, a significant number of its B2B customers also
shop via Newegg&rsquo;s account managers, or on its flagship retail platform, <I>Newegg.com</I>. See &ldquo;&mdash;The Newegg
Platforms&mdash;B2B Platforms&rdquo; for more information about these platforms.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>How
Newegg Delivers Its Service</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
sells products to its B2C and B2B businesses through direct sales and the Marketplace.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For years since it commenced operations, Newegg operated primarily
as a direct sales e-commerce platform and built a well-recognized brand, a massive, loyal tech-focused customer base, a reliable
logistics network and strong supplier relationships. Leveraging these existing competitive advantages, the know-how and expertise
from its direct sales business, in 2010, Newegg launched Newegg Marketplace to complement its direct sales operations. Newegg Marketplace
has allowed Newegg to significantly expand its global reach and product assortment that it otherwise couldn&rsquo;t offer efficiently,
while incurring minimal inventory risk and costs associated with building additional supplier relationships. The products sourced
by it, together with those offered on the Marketplace, provide Newegg&rsquo;s customers access to an unparalleled product assortment.
Newegg&rsquo;s online platforms (direct and Marketplace) offered approximately 32.6 million SKUs as of June 30, 2020.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
believes that the integration of its direct sales and Marketplace operations have created a virtuous, self-reinforcing cycle.
The Newegg Marketplace is built on the success of its direct sales business, and Newegg believes that many sellers are
attracted to the Newegg Marketplace by its direct sales credentials. On the other hand, as the number of sellers and brands
on the Newegg Marketplace continues to grow, the choices available to customers also should increase, generating a strong
momentum for Newegg&rsquo;s continued growth. Newegg believes that this self-reinforcement, coupled with its reliable
logistics network, has made it a strong player in the e-commerce industry.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Direct
Sales</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg acquires products directly from its partners that consist
of manufacturers, distributors and wholesalers, and sells them directly to its B2C and B2B customers. For its direct sales, Newegg
sources the products, takes inventory risk, processes customer payments, prepares packages for shipment and delivery, and provides
customer service and support. Newegg stocks and ships from its own warehouses, and also drop ship directly to customers from its
partners&rsquo; warehouses.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The success of Newegg&rsquo;s direct sales business depends
largely upon its ability to secure a broad selection of products from suppliers at competitive costs. Since the commencement of
its operations, Newegg has sought and cultivated deep, longstanding relationships with some of the biggest IT brands in the world
and many of the largest, most important IT distributors. &nbsp;Newegg continuously seeks to build similar relationships with suppliers
in new and emerging categories and in new geographies. Due to Newegg&rsquo;s strong supplier relationships and Newegg&rsquo;s purchasing
volume, Newegg is able to obtain favorable pricing, early allocation of new products, preferential allocation of products in shortage,
and funding for product promotion and cooperative marketing. Newegg also enjoys exclusive arrangements with certain suppliers where
it is able to offer highly demanded products exclusively on Newegg&rsquo;s platforms. For more information about merchandise sourced
for direct sales, see &ldquo;&mdash;Merchandise Sourcing.&rdquo;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Direct sales is the basis of Newegg&rsquo;s business, generating
approximately 71% of its GMV as of June 30, 2020. Newegg leverages the traffic, customers, infrastructure, brand promise and overall
goodwill generated by its direct sales relationships to enable entry into new models, businesses and geographies. This has allowed
Newegg to continuously improve its value proposition to its customers and reach new customers and geographies, while improving
its relationships with its partners.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Marketplace</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Newegg Marketplace operations enable customers to discover
and purchase products from qualified third-party sellers from 35 countries and regions globally as of June 30, 2020. The Newegg
Marketplace operations consist of the Newegg Marketplace launched in 2010, the Newegg B2B Marketplace, the Newegg Canada Marketplace
launched in 2014 and the International Seller Program launched in 2011, a cross-border selling program designed to allow qualified
international sellers to list products on Newegg&rsquo;s platforms for sale across at least 20 countries and regions. As of June
30, 2020, the Newegg Marketplace connected B2C and B2B customers to 13,897 third-party sellers offering approximately 32.5 million
SKUs. The Newegg Marketplace offers a wide and increasing portfolio of categories, including emerging smart home automation, VR,
and lifestyle electronics, health and beauty technology products, and houses online stores of some of the most well-known brands
in the tech industry, such as HP, Dyson, and Lenovo.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Newegg Marketplace sellers can use the Newegg Marketplace Seller Portal, a unified application programming interface enabled system,
which enables sellers to manage items, orders, accounts and reports, for the day-to-day operations of their online stores, including
product listings, inventory management, order fulfillment, customer service, promotional content and service reviews and returns.
Newegg also offers the following additional features and tools to help Marketplace sellers drive traffic and maximize sales:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Curated
                                         Marketing programs</I>. Newegg has a dedicated marketing team specializing in providing
                                         sellers with both highly effective marketing tools as well as curated marketing programs,
                                         including sponsored product ads, A+ content, email communication program, social media
                                         campaigns, video creation, and more.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>On-site
                                         promotion</I>. Newegg offers Marketplace sellers numerous on-site promotion options,
                                         such as homepage banners, placements to showcase flash sales and featured products, as
                                         well as personalized post-purchase emails.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Shipped
                                         by Newegg (SBN) fulfillment</I>. Newegg gives sellers the option to use Shipped by Newegg
                                         (SBN), an efficient and price-conscious fulfillment service to have Newegg house inventory
                                         and pick, pack, and ship their products.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Shipping
                                         Label Service</I>. Newegg gives sellers the ability to fulfill their own orders and print
                                         a shipping label on their own network or in the office</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Integration
                                         Providers</I>. Newegg partners with a variety of qualified integration service providers
                                         to help Marketplace sellers fill the gaps in the integration process with item creation,
                                         inventory management, order processing, as well as returns and refunds.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><I>Newegg Elite Seller program</I>. Newegg offers the <I>Newegg Elite Seller program</I>, a membership program designed to give qualified sellers premium access to post-purchase customer engagement, Seller Store, and other numerous value-added operational services with significant discounts.</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">While
Newegg encourages Marketplace sellers to offer the most attractive prices, they have the flexibility to price the products sold
through the Newegg Marketplace. Due to Newegg&rsquo;s scale and large visitor traffic, some of the Marketplace sellers also set
aside exclusive product supplies for it and offer the most competitive pricing for its customers.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg has a rigorous process in place to assess the Newegg
Marketplace sellers. Newegg selects Marketplace sellers based on a number of factors, including service level, logistics capability,
operation efficiency, category focus, sales volume, brand assortment, customer rating and market reputation. Newegg also requires
third-party sellers to meet its strict standards and protocols in terms of product authenticity, customer services, and delivery
and fulfillment so that customers are confident that they receive the same level of buying experience and customer service that
they expect when buying directly from Newegg. See also &ldquo;Customer Service and Support&mdash;Marketplace monitoring.&rdquo;
Only those sellers that meet its criteria are selected, and any that fall below its standards will not continue to sell on the
Newegg Marketplace.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Newegg Marketplace sellers pay Newegg commissions on their
sales, with published commission rates varying according to the product category from 8% to 15%. Newegg also charges membership
fees for the additional value-added services and tools that it provides to sellers based on their enrollment.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Merchandise
Sourcing</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of June 30, 2020, Newegg offered over 32.6 million SKUs,
consisting of 131,763 direct sales SKUs sourced from at least 365 suppliers globally and 32.5 million SKUs on the Newegg Marketplace
from 13,897 third-party sellers globally. As of June 30, 2020, approximately 37.4% of Newegg&rsquo;s direct sales inventory was
purchased from distributors, 60.3% directly from manufacturers and 2.3% from other sources. As of June 30, 2020, the 10 largest
suppliers accounted for 70.9% of the merchandise Newegg purchased for direct sales.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The table below shows Newegg&rsquo;s product categories offered
through its platforms and their selected featured brands and the number of SKUs in each category:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR>
    <TD STYLE="vertical-align: bottom; width: 19%; border-bottom: black 1.5pt solid"><FONT STYLE="font-size: 10pt"><B>Category</B></FONT></TD>
    <TD STYLE="vertical-align: top; width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 34%; border-bottom: black 1.5pt solid"><FONT STYLE="font-size: 10pt"><B>Products</B></FONT></TD>
    <TD STYLE="vertical-align: top; width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 28%; border-bottom: black 1.5pt solid"><FONT STYLE="font-size: 10pt"><B>Selected
    Featured Brands</B></FONT></TD>
    <TD STYLE="vertical-align: top; width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 16%; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>SKUs
    as of <BR>
    June 30, 2020</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Computer System</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Desktops, laptops, gaming laptops, peripherals and accessories&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Asus, MSI, HP, Lenovo, Dell, Acer, Microsoft, Samsung, LG, Gigabyte, Westinghouse</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Approx. 5,804,700</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Components</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">CPU / processors, Graphic Cards, Motherboards, storage devices and computer accessories&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Intel, AMD, Asus, MSI, Corsair, Gigabyte, ASRock, EVGA, Western Digital, Seagate, Samsung,
    G.Skill</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Approx. 2,034,230</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Electronics</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Home Video, Home Audio, Headphones, Pro Audio/Video, Cellphones, Wearables, Digital Cameras&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Samsung, LG, Sony, Denon, Yamaha, Beyerdynamic</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Approx. 8,082,090</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Gaming</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Xbox, PlayStation, legacy gaming, gaming titles&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Nintendo, Sony Playstation, Microsoft Xbox&nbsp;</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Approx. 144,850</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Networking &amp; Smart Home</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Home networking, commercial networking, server &amp; components and smart home products&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Asus, TP-Link, Netgear, Linksys, SonicWall, Polycom, Plantronics, Jabra, Yealink, Cisco,
    Ruckus, Ubiquiti</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Approx. 2,486,200</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Office Solutions</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Display &amp; printing, office technology furniture, office supplies and mailing &amp; inventory
    supplies&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">HP, Brother, Epson, Xerox, Lexmark, Zebra, Honeywell, ELO Touch, Sony, Sharp, Asus, Acer,
    Samsung, Eureka Ergonomic, COUGAR</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Approx. 2,235,100</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Software &amp; Services</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Software, Digital Downloads, Warranty &amp; Services, 3rd Party Gift Cards, and Entertainment
    Products&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Microsoft, Adobe, Norton, Intuit, SquareTrade</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Approx. 111,740</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Automotive &amp; Industrial</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Car electronics, Marine and Aviation, Motorcycles and ATV, Performance Parts, Tools and
    Equipment, Wheels and Tires&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Alpine, Kenwood, 3M, Garmin, Pioneer, Boss Audio, BFGoodrich, Continental Tires, Firestone,
    Goodyear, Hankook, Michelin, Toyo</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Approx. 735,000</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Home &amp; Tools</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Home improvement tools, home appliances, kitchen utensils, outdoor &amp; garden furniture,
    and pet supplies, Generators&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Dyson, Cuisinart, Frigidaire, iRobot, Hoover, Ninja, Shark, Keurig, Caterpillar, DEWALT,
    Makita, Bosch, Milwaukee</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Approx. 5,864,600</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Health &amp; Sports</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Fitness, sports and health and beauty supplies</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Huffy, Vilano, Razor, Garmin, Barska, Tactical Scorpion Gear, Intex, GoPowerBike, Callaway
    Golf, BestMassage&nbsp;</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Approx. 1,078,300</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Apparel &amp; Accessories</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Clothing, Costumes, Maternity, Shoes, Socks, Men &amp; Women Clothing&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Adidas, Converse, Levis, Skechers, Timberland, UGG, Under Armour, Crocs</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Approx. 2,534,700</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Hobbies &amp; Toys</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Drones, learning &amp; educational materials, Action Figures, Collectibles, Board Games,
    Stem Toys, Science and Nature Toys</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Disney, Funko, Lego, Bandai Namco, Banzai, Hasbro, Razor, Spin Master, Little Tikes</FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Approx. 1,463,800</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
ensure a steady supply of products and optimized pricing and allocation, Newegg maintains multiple sourcing arrangements for most
of its products. Newegg deploys a flexible sourcing model, utilizing different distribution channels when economically and logistically
beneficial while maintaining its reseller authorizations and relationships with its brand partners. As Newegg increases in scale
in new or emerging product categories, it endeavors to increase its purchases directly from manufacturers and, where appropriate,
to become an authorized reseller, which Newegg believes provides improved product pricing and better access to preferred product
allocation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
tech savvy customer base, its online marketing and merchandising expertise and its ability to quickly and efficiently launch new
products make it the go-to channel for many manufacturers and distributors. Newegg is particularly strong in the components categories
where Newegg is one of the largest channels online or offline and it continues to gain significant traction with suppliers in
other categories, such as desktop PCs, laptops, and input/output devices.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg maintains extensive and longstanding relationships with
many of the biggest tech product brands and distributors globally. Newegg employs a team of merchandising professionals consisting
of 51 employees as of June 30, 2020, specifically trained to cultivate and manage relationships with large international IT brands,
such as Gigabyte, MSI, Asus, G.Skill, Acer, Corsair, Coolermaster, AMD, Intel, WD, Seagate, Samsung, Nvidia, HP, Lenovo, Microsoft
and EVGA. Its merchandising professionals review Newegg&rsquo;s product categories and brands on a regular basis to assess demand
and trends so that Newegg offers its customers access to the most current and desirable products. Newegg purchases its inventory
from vendors on trade accounts typically requiring payment between 15 and 45 days after the date the inventory is shipped to it.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Leveraging its scale, brand and global footprint, Newegg seeks
to enter into exclusive agreements with selected suppliers and third-party distributors for some or all of their products with
favorable terms. Newegg has created a manufacturer portal where its suppliers can access reports regarding inventory and purchase
history of the manufacturers&rsquo; products, view Newegg&rsquo;s vast record of customer reviews, and analyze information about
its customer purchases of their products. Newegg&rsquo;s suppliers can access this information to assist in their marketing and
product development effort.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Private
Labels</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2004, Newegg began to offer its private label products by launching <I>Rosewill</I>, its first private label brand on <I>Newegg.com</I>.
The private label assortment is primarily focused around categories where Newegg believes that it can compete at higher than average
margins while delivering lower cost, high quality options to its customers. Newegg offers its private label products both across
its platforms and on other e-commerce platforms, such as Walmart, Amazon, and eBay.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s major private labels currently include <I>Rosewill</I>
which is focused on offering feature rich computer components, gaming peripherals and home electronics, and <I>ABS, </I>a private
label launched in 2014 that offers high-end gaming PCs for consumers and custom configured computers for business applications
requiring the performance of a gaming GPU.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Other
Services and Solutions</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition to online retail sales, Newegg also generates revenues
from a range of ancillary value-added D2C platform services and solutions. Newegg believes by providing these services, Newegg
creates additional value for its business partners and customers and ultimately benefits the Newegg ecosystem and all its participants.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Supply
Chain Third-party (3PL) Services</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><I>Shipped by Newegg&reg; Service</I>. Newegg began to offer <I>Shipped
    by Newegg</I>, a comprehensive suite of warehousing and fulfillment services, to the Newegg Marketplace sellers in 2013. Enrolled
    Newegg Marketplace sellers deliver their products to one of Newegg&rsquo;s fulfillment centers, and Newegg handles the fulfillment
    of orders placed in the sellers&rsquo; online stores and charges service fees based on the size of the products and the shipping
    methods requested.</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Newegg
                                         Logistics</I>. Newegg launched <I>Newegg Logistics</I> in 2014, a division dedicated
                                         to providing end-to-end e-commerce logistics and supply chain solutions covering warehousing,
                                         inventory management, order processing, packing and shipping, designed to reduce inventory
                                         costs and streamline supply chain efficiencies, to Newegg&rsquo;s other business partners,
                                         manufacturers, whole-sellers, Marketplace sellers and B2B clients. Newegg typically enters
                                         into a master service agreement with its <I>Newegg Logistics </I>customers and charge
                                         service fees at a fixed rate.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Newegg
                                         Staffing</I>. Newegg launched Newegg Staffing in 2020 with a focus on providing both
                                         Direct Placement and Seasonal Placement of employees to help its partners, offering Clerical,
                                         Manufacturing and Logistics Employee placement. Offices have been launched in Southern
                                         California and Indiana.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Newegg
                                         Bridge</I>. Newegg launched Newegg Bridge in 2020 offering turnkey customer service outsourcing
                                         solutions with 24/7 support. The outsourcing solutions include Phone, Chat, and Email
                                         support, as well as Social Media monitoring. Newegg Bridge is a scalable solution that
                                         can assist &ldquo;small, medium, and larger&rdquo; customers year round or seasonally.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><I>Pure Facility Solutions</I>. Newegg launched a cleaning service business
    named Pure Facility Solutions in 2020 offering commercial facilities cleaning and sanitizing services to businesses.</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><I>Newegg PC Assembly Service</I>. Newegg expects to launch a PC building
    service which will offer professional assembly service, custom skins, and liquid cooling loops assembly service. This service
    primarily will operate in two kind of builds, BTS (Build To Stock) &amp; BTO (Build To Order).</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Marketing
Services</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg offers flexible marketing packages consisting of advertising
sales, event organization and other marketing campaigns to its brand partners. Newegg helps brands reach a potential audience by
leveraging its online portals, marketing affiliates and promotional emails. Newegg has a global professional marketing team consisting
of 62 people as of June 30, 2020, who help its brand partners and Marketplace sellers design marketing activities with highly effective
cost of sales. In addition, Newegg also utilizes social media to market its brand partners to over three million social fans across
various internet platforms, including Facebook, Twitter, YouTube and Instagram, by offering promotions, sweepstakes, and reviews
in order to maximize Newegg&rsquo;s brand partners&rsquo; exposure.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_156"></A>The
Newegg Platforms</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s websites and mobile applications, which it refers
to as the Newegg platforms, are the foundation of the Newegg ecosystem. While each Newegg platform is strategically focused on
differential market segments, customers and/or product categories, the platforms share a common Newegg brand and are supported
by its integrated logistics and fulfillment capability, operational expertise and technology infrastructure, and Newegg offers
the same level of customer service and dedication across all these platforms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>B2C
Platforms</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

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    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD><I>Newegg.com</I>. Launched in 2001 in the United States, <I>Newegg.com </I>is its first online platform and currently
    its flagship e-commerce platform. <I>Newegg.com</I> offers a typical range of IT/CE categories with the continuous addition
    of emerging categories across the internet of things (IoT) home automation, robotics, drones, auto electronics and more. While
    <I>Newegg.com </I>operates predominantly as a B2C e-commerce platform, <I>Newegg.com</I> supports both direct sales where
    Newegg sells merchandise directly to customers and the Marketplace model where third-party sellers offer their inventory to
    Newegg&rsquo;s customers. As of June 30, 2020, <I>Newegg.com</I> fulfilled orders originating from various countries, mostly
    in Asia and the Middle East region.</TD></TR>
</TABLE>


<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD><I>Newegg.ca</I>. Newegg launched <I>Newegg.ca</I> in 2008 to sell IT/CE products in Canada with a business model similar
    to that of <I>Newegg.com</I>. <I>Newegg.ca</I> is a leading e-commerce platform focusing on IT and CE products in Canada,
    with approximately 1.4 million customers as of June 30, 2020, and GMV of $71 million for the six months ended June 30, 2020.
    Currently, nearly half of orders on <I>Newegg.ca</I> are fulfilled from Newegg warehouses. Newegg also delivers to its Canadian
    customers via <I>Shipped by Newegg</I> or other third-party shipping companies. Orders for merchandise offered by Canada-based
    Marketplace sellers are fulfilled locally by such sellers in Canada as well.</TD></TR>
</TABLE>


<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

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    <TD STYLE="width: 0.25in">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&#9679;</FONT></TD>
    <TD><I>Newegg Global</I>. Newegg launched <I>Newegg Global</I> in 2017 as an expansion of its footprint in the global ecommerce
    market. <I>Newegg Global</I> can automatically detect a customer&rsquo;s IP address and offer the customer an option to go
    to their local website or to use the U.S. website. <I>Newegg Global</I> currently fulfills orders originated from 20 countries
    or regions and offers five payment methods and one to seven business day door-to-door delivery services. <I>Newegg Global
    </I>had approximately 368,000 registered customers outside North America as of June 30, 2020 and had a GMV of 27.6 million
    for the six months ended June 30, 2020.</TD></TR>
</TABLE>


<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"> &nbsp; </TD>
    <TD STYLE="width: 24px; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD>
    <TD STYLE="font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Mobile apps</I>.
Since the launch of Newegg&rsquo;s first mobile app in 2008, Newegg has accumulated millions of downloads of its mobile apps.
Newegg currently has a mobile app for Apple devices and for Android devices, and Newegg launches updated versions of its apps
periodically. As of December 4, 2020, Newegg&rsquo;s mobile app for Apple devices has a customer rating of 4.8 out of 5.0, and a customer
rating for its Android mobile app of 4.6. For more details, see &ldquo;&mdash;Technology&mdash;Newegg&rsquo;s IT Capability&mdash;Mobile
Apps.&rdquo;</FONT> </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>B2B
Platforms</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In 2009, Newegg launched <I>NeweggBusiness.com</I>, a site that
currently supports substantially all of its B2B operations. Over the years, Newegg has built <I>NeweggBusiness.com</I> into a dedicated
B2B e-commerce platform offering a full range of IT, office and industrial products and solutions with a wide customer base ranging
from government agencies, healthcare institutions, and education institutions to other businesses of all sizes. <I>NeweggBusiness.com</I>
supports both direct sales and a B2B marketplace that connects its B2B customers with over 2,000 third-party sellers globally.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Other
Platforms</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to the major Newegg platforms discussed above, Newegg also operates <I>Newegglogistics.com</I>, a platform dedicated
to providing reliable logistics and supply chain solutions through 3PL operations. For details of Newegg&rsquo;s 3PL services,
see &ldquo;&mdash;Newegg&rsquo;s Business Models&mdash;Other Services&mdash;Third-party Logistics (3PL) Services.&rdquo;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_157"></A>Logistics
and Fulfillment</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg has a reliable logistics network and infrastructure designed
to ensure timely and accurate shipment of a massive amount of orders. This has allowed it to handle seamless delivery of over 22,885
parcels per day on average, with an average accuracy rate of over 99.9%, an over 97.4% 1-business day fulfillment rate in the United
States and Canada if ordered prior to Newegg&rsquo;s 3PM local time order cut-off and a 99.5% 2-business day fulfillment rate in
the United States and Canada, as of June 30, 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg stocks and ships the vast majority of its direct sales
products. Fulfillment of orders from the Newegg Marketplace is executed by the sellers except for orders shipped through its Shipped
by Newegg (SBN) services, where the items will be shipped from one of Newegg&rsquo;s warehouses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
logistics and fulfillment infrastructure and capabilities include:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Warehouses</I></B>.
                                         Newegg believes the best approach in serving its customers is to maintain reasonable
                                         inventory levels and to ship directly from its own inventory. As of June 30, 2020, Newegg
                                         operated seven strategically-located fulfillment centers, including six warehouses located
                                         in North America and one in China, covering more than 1.6 million square feet in total.
                                         Each of Newegg&rsquo;s warehouses is able to process 13,000 inbound pieces and 10,000
                                         outbound pieces on average per day. Newegg also maintains regional warehouses in Southern
                                         California, New Jersey and Indiana and Ontario, Canada to fulfill customer orders in
                                         the United States and Canada. The geographical placement of its warehouses and its warehouses
                                         in North America enable it to reach approximately 95% of the North American population
                                         in two business days.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Cooperation
                                         with reliable logistics service providers</I></B>. Newegg capitalizes on a robust transportation
                                         framework that connects international air and sea transport, domestic over-the-road carriers,
                                         and last mile delivery to residential consumers such as United States Postal Service,
                                         Purolator, OnTrac and UPS. Newegg has also engaged and is working with multiple logistics
                                         partners to offer a wide array of flexible delivery options.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Virtual
                                         fulfillment</I></B>. Newegg ships certain products to customers directly from vendors
                                         and distributors who meet its quality fulfillment standards without going through its
                                         warehouses, a practice which Newegg refers to as virtual fulfillment. Virtual fulfillment
                                         is fully utilized to broaden Newegg&rsquo;s product assortment and avoid loss of sales
                                         when SKUs are out of stock. In the United States, virtual fulfillment accounted for approximately
                                         8.8% of direct sales as of June 30, 2020, and 8.1% of direct sales as of September 30,
                                         2020.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Its
logistics and fulfillment focus on reliable, efficient and flexible delivery.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Reliability</I></B>.
                                         Newegg has a reliable technology platform and order process flows for its fulfillment
                                         operation. Each order is verified at least twice before being shipped. Customers can
                                         track the shipping status of their purchases through links to Newegg e-mail and/or its
                                         websites and mobile applications. Newegg&rsquo;s inventory management and tracking also
                                         have redundant capabilities to enable each facility, if necessary, to fulfill most U.S.
                                         orders. This redundancy could allow it to continually fulfill most orders, albeit less
                                         efficiently, as long as a single warehouse is operational.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Efficiency</I></B>.
                                         Newegg has a well-designed, fully-customized warehousing management software system that
                                         is adopted by all warehouses, featuring smart categorization of inventory assortment
                                         in various warehouse locations to maximize logistics efficiency. When Newegg orders product
                                         from a supplier, it tracks the receipt of the merchandise and can &ldquo;material optimize,&rdquo;
                                         or direct, the inventory to a specific warehouse to match customer demand in a geographical
                                         area; when a purchase order is received, Newegg matches the order to its inventory, and
                                         distributes a specific order fulfillment assignment to one or more warehouses for processing.
                                         Newegg uses advanced, &ldquo;pick-to-light&rdquo; conveyer systems to allow its warehouse
                                         staff to fulfill orders quickly.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Flexibility</I></B>.
                                         Newegg&rsquo;s customers may choose various shipping methods including basic ground delivery
                                         and expedited overnight shipping, and Newegg has continuously optimized its delivery
                                         options available to upgrade the shopping experience of its customers. For example, in
                                         2019, in collaboration with UPS, Newegg introduced an option allowing customers to pick
                                         up the products they purchase at a nearby UPS location instead of having them delivered
                                         at their own addresses. This is a safe and convenient shipping option and reduces the
                                         waiting time customers would otherwise experience between the time an order is placed
                                         and their products are received.&nbsp;</FONT></TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_158"></A>Customer
Service and Support</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
has built its brand on the principle of superior customer service. Newegg provides high-quality customer service and support throughout
its customers&rsquo; entire engagement with it, from purchase to returns.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Customer
                                         service</I></B>. Newegg&rsquo;s in-house customer service staff are trained to resolve
                                         customers&rsquo; inquiries as quickly as possible. Newegg currently operates multilingual
                                         customer service centers in California and has customer service representatives working
                                         remotely in Nevada, focusing on serving North American buyers, and a multilingual customer
                                         service centers in China that is available 24 hours a day, seven days a week via e-mail
                                         and instant messaging. As of June 30, 2020, Newegg employed over 199 experienced customer
                                         service representatives responsible for handling general customer inquiries, taking orders
                                         and investigating the status of orders, shipments and payments. Newegg&rsquo;s multilingual
                                         customer service representatives are available by phone, live-chat, chatbot or email.
                                         During Christmas and other peak sales periods, Newegg also hires part-time personnel
                                         to meet increased sales and customer inquiries.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Marketplace
                                         monitoring</I></B>. When customers purchase items from the Newegg Marketplace sellers,
                                         Newegg wants them to be confident that they receive the same level of customer service
                                         they expect from Newegg direct sales. With that in mind, Newegg closely monitors the
                                         performance of the Newegg Marketplace sellers to ensure they abide by the Newegg Marketplace
                                         rules, provide customers with quality customer support, ship orders on time, and respond
                                         to customer queries in a timely fashion. Newegg has adopted a zero-tolerance policy on
                                         counterfeit products and has rules in place to take down allegedly counterfeit or pirated
                                         products and disqualify sellers selling counterfeit or pirated products.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Newegg
                                         Marketplace Guarantee service</I></B>. Newegg also offers a special customer service
                                         program, Newegg Marketplace Guarantee, for Marketplace orders. With Newegg Marketplace
                                         Guarantee, if a Marketplace seller fails to reimburse the customer for products that
                                         are damaged, defective or materially different from what was displayed on the Newegg
                                         platform by that seller, the customer can submit a claim directly to it and may be eligible
                                         for reimbursement of the purchase price of any product they purchase from a Newegg Marketplace
                                         seller, up to $1,000.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Return
                                         policy</I></B><I>. </I>Newegg&rsquo;s standard return policy allows certain items that
                                         are directly sold and shipped by it to be returned within 30 days of the original invoice
                                         date for a full refund or for a replacement, with restocking fees charged in both cases.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">From
a customer service perspective, in addition to customers, Newegg broadly defines its customers to also include the Newegg Marketplace
sellers, from whom Newegg earns commissions, and purchasers of its 3PL services and other ancillary e-commerce solutions and services.
See &ldquo;&mdash;The Newegg Ecosystem&mdash;Key Ecosystem Participants and How Newegg Creates Value for Them&mdash;Marketplace
Sellers&rdquo; and &ldquo;&mdash;Newegg&rsquo;s Business Models&mdash;Other Services&mdash;Third-party logistics (3PL) services&rdquo;
for more information about Newegg&rsquo;s engagement with these customers.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_159"></A>Payment</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
provides its customers with the flexibility to choose from a number of traditional online payment options, along with certain
creative payment solutions that are popular with tech enthusiasts.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>B2C
                                         payment options</I></B>. Newegg offers various mainstream online payment options to customers
                                         on its B2C platform, including credit cards, debit cards and pre-paid gift cards. Newegg
                                         offers customers the opportunity to pay for items purchased on its platforms with <I>Newegg
                                         Store Credit Card</I>, a private label credit card that Newegg launched in partnership
                                         with Synchrony Financial, a U.S. consumer financial services company. <I>Newegg Store
                                         Credit Card</I> has a revolving credit line and offers numerous attractive financing
                                         options, including, for example, zero interest for everyday purchases for up to 12 months,
                                         and up to 36 months on purchases of certain items on its platforms, which Newegg believes
                                         improves customer loyalty and purchase frequency and results in more sales amount. In
                                         addition, Newegg allows customers to use Bitcoin and Bitcoin cash to pay for purchases
                                         made on its platforms.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>B2B
                                         payment options</I></B>. B2B customers can make payment during checkout or request credit
                                         and pay on terms via the above-mentioned online payment options or via ACH, wire transfer
                                         or bank check. Newegg also offer open terms accounts for business and public sector customers.
                                         In most cases, the payment term that Newegg grants to its B2B customers is 30 days.</FONT></TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_160"></A>Sales
and Marketing</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
marketing strategy includes generating customer traffic, increasing its brand recognition, acquiring customers cost-efficiently,
building customer loyalty and maximizing repeat purchases. Newegg&rsquo;s integrated marketing framework represents a core competency
that it regards as essential to the success of its platform. Newegg is focused on continuing to enhance Newegg&rsquo;s brand awareness
through a variety of online and offline marketing and brand promotion activities, meanwhile leveraging technology to drive scalability
and sustainability and eventually achieve optimal return on investment and highly effective cost of traffic as well as sales.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Referral</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg benefits significantly from word-of-mouth referrals
and positive product reviews, and Newegg believes its reputation as a one-stop-tech-shop has led to strong word-of-mouth promotion,
especially among the tech-savvy. Newegg also provides live-streaming product reviews on its platforms, through which its customers
could see other people&rsquo;s thoughts on the product in a more straightforward way. As of June 30, 2020, Newegg attracted 54%
of its visitors without incurring a referral, click-through or advertising fee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Online
Marketing</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
conducts the majority of its marketing efforts online through targeted marketing via affiliates, search engines, promotional emails,
social media traffic, targeting and personalization and online promotion campaigns.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT> </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif"> <I>Paid
                                         search engine marketing.</I> Search engine marketing is a major driver of its traffic
                                         and customer acquisition. As of June 30, 2020, its spending on paid search engine marketing
                                         represented approximately 58% of its total marketing spending. Newegg bids for specific
                                         keywords and products on search engine sites, such as Google, Yahoo! and Microsoft Bing,
                                         for optimum visibility in the displayed results. Newegg&rsquo;s broad and evolving product
                                         selection enables it to utilize a large quantity of keywords that Newegg frequently tests
                                         and measure for their effectiveness. Newegg also uses sophisticated software to strategically
                                         manage its keyword and SKU level bids to maximize marketing performance at an efficient
                                         rate. </P></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Affiliate
                                         Marketing</I>. Newegg also engages in affiliate marketing programs where Newegg offer
                                         affiliated websites commissions for sales resulting from directing customer traffic to
                                         its websites through embedded hyperlinks. Such affiliates are typically deal sites that
                                         advertise retailer deals to their audiences. Affiliate marketing is Newegg&rsquo;s second
                                         largest paid marketing channel and represents approximately 17% of Newegg&rsquo;s total
                                         marketing expense as of June 30, 2020.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Targeting
                                         and personalization Marketing</I>. Targeting and personalization have proved to be highly
                                         effective in terms of conversion and customer acquisition. Newegg&rsquo;s CRM Marketing
                                         Team run various and highly diversified marketing programs through personalization and
                                         segmentation on multiple channels including website, email, social, paid search engine,
                                         and more. Basing on customers&rsquo; onsite behavioral data and purchase history data,
                                         Newegg are able to identify prospect customers (visitors sharing a same shopping pattern
                                         with Newegg customers) as well as existing customers and display its brand and product
                                         advertising ads to them when they are on social media or Google search or other affiliate
                                         sites.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Others</I>.
                                         Other online marketing channels include click-through based advertising on shopping comparison
                                         engines, targeted messages, email distribution, banner advertisements on high-traffic
                                         portals, social networking via major social media sites and Newegg&rsquo;s own branded
                                         portal, and onsite promotions and cross-selling opportunities on its websites, such as
                                         <I>Daily Deals</I> and <I>Marketplace Spotlight</I>. Newegg had approximately 18 million
                                         email subscribers as of June 30, 2020 and successfully delivered over 1.3 billion emails
                                         to targeted customers, which is way ahead of industry benchmarks.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Offline
Marketing</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
also devotes marketing resources in various offline formats, including displaying offline advertisement through multiple channels
and sponsoring or organizing offline events.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
leverages offline events as a way to engage its customers, vendors and brand partners to extend its brand recognition. Newegg
has launched various offline events to enhance the interaction among IT enthusiasts and to promote its products and brands,
including and the Newegg Triple Crown Royal at HyperX Esports Arena in Las Vegas, Intel Extreme Masters in Chicago and the
CLG Fortnite Challenge in New York. For example, Newegg held its 15th annual Eggie Awards gala in January 2019 at the
Hakkasan, a renowned Asian-fusion eatery &amp; club in Las Vegas, honoring key partner companies and individuals that are
important to Newegg&rsquo;s success.</FONT> Other events included the Newegg Triple Crown Royal at HyperX Esports Arena Las
Vegas, Caltopia at UC Berkeley, Intel Extreme Masters at Chicago, CLG Fortnite Challenge event in New York, and CLG Tailgate
event in West Hollywood.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_161"></A>Technology</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
technology systems are a critical component of its success and are designed to enhance efficiency and scalability. Newegg&rsquo;s
research and development team, coupled with its proprietary technology infrastructure and the large volume of data generated and
collected on its platforms, have created opportunities for continuous improvements in Newegg&rsquo;s technology capabilities,
empowering reliability, scalability and flexibility. Newegg&rsquo;s technology strategy is to develop Newegg&rsquo;s own proprietary
software and license technologies from third parties as appropriate in order to simplify and improve the shopping experience,
as well as facilitate Newegg&rsquo;s fulfillment, financial and customer service operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>IT
Infrastructure</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
has built its technology platform relying primarily on software and systems that Newegg has developed in-house and to a lesser
extent on third-party software. Its global research and development team consists of more than 450 IT professionals and engineers
as of June 30, 2020, working to design and maintain Newegg&rsquo;s IT infrastructure to support its growth. Newegg&rsquo;s technology
infrastructure is designed for scalability and reliability to support business growth. It utilizes high-availability clusters
comprising groups of servers to provide sufficient redundancy and ensure continued service in the event of single point server
failure due to hostile attacks, systematic errors or other reasons. Newegg&rsquo;s high-availability data system ensures that
back-up servers are connected to its network instantly once master servers experience technical difficulties.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
currently has two self-owned data centers in City of Industry, California and two co-located data centers at facilities in Los
Angeles, California, and New Jersey to provide redundancy for its e-commerce data. Newegg maintains over 1,500 servers stored
in its data centers and 300 network devices. Newegg&rsquo;s IT infrastructure enables it to support 54 million page views and
with the capability to process up to 0.75 million orders per day. Newegg&rsquo;s platform obtained PCI Level 1 certification in
2010.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Newegg&rsquo;s
IT Capability</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Websites</I>.
                                         Newegg&rsquo;s website incorporates proprietary technology internally developed on a
                                         primarily Microsoft.NET platform. It provides product descriptions, search and ordering
                                         functionalities and product reviews.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Mobile
                                         site and apps</I>. Customer activity on mobile devices is growing, and Newegg is investing
                                         significantly in mobile technology to increase sales to customers using mobile devices.
                                         Newegg&rsquo;s mobile app aims to create a convenient shopping experience for its customers,
                                         by, for example, enabling users to save their profiles and payment information for future
                                         purchases, and to provide helpful tools to Marketplace sellers, by for example offering
                                         a mobile dashboard allowing them to better manage their inventory and orders on the go.
                                         As of June 30, 2020, the orders placed on its mobile site and apps accounted for approximately
                                         22.5% of its total B2C orders.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Data
                                         and analytics. </I>Data collected from Newegg&rsquo;s operations, including inventory
                                         data, behavioral and transactional data and pricing data, are housed in Newegg&rsquo;s
                                         data centers. Newegg has deployed commercial business intelligence software to analyze
                                         this data and improve the shopping experience. Newegg applies various AI capabilities
                                         and deep learning technologies across its platforms to enhance the shopping experience.
                                         Newegg&rsquo;s sophisticated user behavior analysis system leverages its large customer
                                         database to create customized product recommendations, allowing it to efficiently acquire
                                         new customers and increase sales. Also, Newegg has leveraged its AI capabilities to do
                                         category extraction for different products based on the unstructured content and images,
                                         the results of which have been used to do miscategorization correction and site search
                                         relevancy improvement.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Inventory
                                         management</I>. Newegg&rsquo;s supply chain management system includes price optimization,
                                         inventory balancing, and inventory forecasting and other subsystems. It enables effective
                                         sales forecasting and inventory management that increase the efficiency of Newegg&rsquo;s
                                         supply chain and help it control costs. Newegg&rsquo;s inventory availability is coordinated
                                         through Newegg&rsquo;s technology platform and platforms. Newegg has added functionality
                                         to update Newegg&rsquo;s platforms on a real-time basis when items become out of stock
                                         in Newegg&rsquo;s fulfillment centers. This feature limits the number of orders placed
                                         for out-of-stock items, allowing it to better manage aging inventory and minimize customer
                                         dissatisfaction by eliminating backorder merchandise.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Transaction
                                         management</I>. Newegg has developed and deployed a scalable back office platform that
                                         allows it to monitor transactions and changes to financial data as well as provide Newegg&rsquo;s
                                         management with daily updates. Newegg utilizes both proprietary and third-party applications
                                         for accepting and validating purchase orders, placing and tracking orders with suppliers,
                                         managing inventory and assigning it to purchase orders and ensuring proper shipment of
                                         products to customers.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Fulfillment
                                         management. </I>Newegg has software for its fulfillment operations that tracks customer
                                         orders from placement through packing and shipping. Newegg has installed sophisticated,
                                         &ldquo;pick-to-light&rdquo; conveyor systems and associated software. Newegg has also
                                         developed software modules that efficiently manage the sorting and picking process of
                                         its products. Newegg&rsquo;s systems are integrated with those from its primary U.S.
                                         shipping vendor to facilitate tracking of the orders after shipment.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Anti-fraud
                                         monitoring</I>. Online fraud is a constant threat to security and reliability of e-commerce
                                         retailers. Newegg work with third-party vendors to monitor its network security devices
                                         and to secure its online payment systems. Newegg has developed proprietary tools in-house
                                         to monitor its online traffic for suspicious activities. Newegg&rsquo;s websites have
                                         earned certifications from organizations and agencies like Tevora, based on its meeting
                                         their information protection and fraud prevention standards.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Research
&amp; Development Team</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
global research and development team, consisting of more than 450 IT professionals and engineers as of June 30, 2020, is focused
on innovation through software development, algorithm design and development and IT infrastructure design and maintenance. Newegg&rsquo;s
research and development personnel constantly upgrade its platforms and continuously testing new features to improve its customer
experience. Newegg&rsquo;s research and development team also develop custom-built proprietary and engaged in third-party solutions
to support its specific customer, vendor and the Newegg Marketplace seller requirements, including handling heavy traffic on its
platforms and providing quick and efficient fulfillment services to meet customer expectations. In 2010, Newegg were granted with
a CMMI Level 4 maturity certification from the Capability Maturity Model Integration Institute for its research center in China.&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_162"></A>Security
and Privacy Policy</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
is committed to protecting information security across all Newegg platforms. Newegg uses a variety of techniques to protect the
integrity of its networks and the confidential data it collects and stores. Confidential information concerning Newegg&rsquo;s
customers, sellers and suppliers is encrypted and is protected using SSL encryption software. In addition, Newegg uses multiple
layers of network segregation and hierarchical levels of firewall technology to protect against attacks or unauthorized access
to its networks, servers and databases. Newegg also continues to build new procedural safeguards as part of its comprehensive
privacy program. Newegg operates in a secured and locked facility that requires all of its employees to check in and wear valid
ID badges.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
has adopted a detailed privacy policy that describes in plain language its data use practices and how privacy is protected at
Newegg, including the extent to which other Newegg users may have access to this information. Newegg requires users to acknowledge
and expressly agree to this policy when registering with its platforms.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_163"></A>Intellectual
Property</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
relies on a combination of trademark, trade secret and other intellectual property laws as well as confidentiality agreements
with its employees and suppliers for the purpose of protecting the proprietary rights associated with the products branded under
Newegg&rsquo;s private labels. Newegg controls access to use and distribution of its intellectual property through license agreements,
confidentiality procedures,&nbsp;non-disclosure&nbsp;agreements with third parties and its employment and contractor agreements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
intellectual property portfolio includes numerous domain names for websites that it uses in its business. Newegg has registered
the domain names&nbsp;newegg.com, newegg.ca and neweggbusiness.com&nbsp;and their variations. Newegg&rsquo;s &ldquo;Newegg&rdquo;
trademark and logo have also been registered with the relevant authorities in the United States, Canada and China (as well as
in other regions, such as the European Union and Brazil. Furthermore, Newegg has also registered the trademarks and logos of its
major private labels, such as Ros<I>ewill</I> and <I>ABS Computer</I>.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to the protection of its intellectual property, Newegg is focusing on ensuring that its product offerings (especially
its private label products) do not infringe on the intellectual property of others. Generally, its agreements with suppliers contain
provisions to safeguard it against potential intellectual property infringement by its suppliers and impose penalties in the event
of any infringement. Newegg reserves the right to refuse to work with or terminate its relationship with suppliers where it comes
to its attention that they are violating the intellectual property rights of a third party.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_164"></A>Competition</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
worldwide market in which Newegg competes is evolving rapidly and intensely competitive, and Newegg faces a broad array of competitors
from many different industry sectors around the world. Newegg&rsquo;s current and potential competitors include: (i)&nbsp;online,
offline and multichannel retailers, publishers, vendors, distributors, manufacturers, and producers of the products Newegg offers
and sells to customers; (ii)&nbsp;companies that provide ancillary D2C platform services and solutions, including website development,
advertising, customer service and payment processing; (iii)&nbsp;companies that provide fulfillment and logistics services for
themselves or for third parties, whether online or offline; and (iv)&nbsp;companies that design, manufacture, market, or sell
consumer electronics, telecommunication, and electronic devices.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
believe the principal competitive factors in Newegg&rsquo;s market are:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">breadth
                                         and quality of product offerings;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">pricing;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">fulfillment
                                         capabilities;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">brand
                                         recognition and reputation;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">customer
                                         services;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ability
                                         to respond more quickly to changing consumer preferences;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ability
                                         to reach a geographically broader set of customers; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ability
                                         to be more flexible in marketing to a specific set of potential customers.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Some
of Newegg&rsquo;s current and potential competitors have greater resources, longer histories, more customers, greater brand recognition,
and greater control over inputs critical to Newegg&rsquo;s various businesses. They may secure better terms from suppliers, adopt
more aggressive pricing, pursue restrictive distribution agreements that restrict Newegg&rsquo;s access to supply, direct consumers
to their own offerings instead of ours, lock-in potential customers with restrictive terms, and devote more resources to technology,
infrastructure, fulfillment, and marketing. Each of Newegg&rsquo;s businesses is also subject to rapid change and the development
of new business models and the entry of new and well-funded competitors. Other companies also may enter into business combinations
or alliances that strengthen their competitive positions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the United States, Newegg competes with retail stores and resellers, including superstores such as Best Buy, Costco and Walmart,
hardware and software vendors that sell directly to end users, online retailers such as Amazon, and other marketers and resellers
of IT and CE products. Newegg also faces competition in the international markets Newegg participates in, such as Mongkok Computer
Centre (HK), Umart (Australia) Best Bargain Computer (Singapore), Noon in the Middle East, or may enter in the future.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_165"></A>Awards
and Accolades</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Since
Newegg first launched its business, its customers have submitted a large number of positive reviews relating to their shopping
experiences with it, many of which are posted on popular consumer review sites such as ResellerRatings. Newegg has also been rated
a number of times as a top e-commerce site for IT and electronics products. For example, Newegg&rsquo;s overall customer satisfaction
rating is 9.3 out of 10 on Internet retail rating site www.ResellerRatings.com. Newegg&rsquo;s success in pleasing its customers
has also been validated in third-party surveys-sources. Newegg have been recognized as a &ldquo;Google Trusted Store&rdquo; with
a rating of 4.5 out of 5. Newegg also became a Better Business Bureau Accredited business since September 2011 with a rating of
A+.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2019 and as of June 30, 2020, Newegg received a number of national awards and ratings for its excellent customer service, including:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD>No.
                                         4 on Forrester&rsquo;s 2019 Net Promoter Score for Digital Retailers;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD>No.
                                         8 on 2019 Twice Top 100 CE Retailers;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: left">No.
                                         7 on the Multiorders 2019 Most Popular Online Marketplaces;</TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: left">No.
                                         26 on the Digital Commerce 360 2020 Top 1000 E-retailers;</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD>No.
                                         33 on the Digital Commerce 360 2020 Online Marketplaces Report; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD>No.
                                         5 on Newsweek&rsquo;s 2020 List of Best Online Shops &ndash; Consumer Electronics</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_166"></A>Employees</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of December 31, 2017, 2018 and 2019, Newegg employed a total
of 2,138, 2,081 and 1,561 full-time employees. As of June 30, 2020, Newegg employed a total of 1,508 full-time employees. The
following tables give breakdowns of its full-time employees as of June 30, 2020 by function and by region.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1.5pt solid">Function</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of Employees</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%">ABS</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">6</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Capital Markets and Investment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">CEO Office</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Customer Service</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">152</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Facilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Fulfillment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">260</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Global BSA</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Global IT</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Global MIS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">49</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Global Marketing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">62</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Global Platform</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">103</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">North Am Internal Audit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">North Am Info. Security</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Marketplace 3PL Operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">North Am B2B</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">North Am Finance</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">North Am Human Resources</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">North Am Legal</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Newegg Canada</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Newegg Logistics</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Planning &amp; Analytics</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Private Label</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Tech</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">APAC Human Resources</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">APAC Business</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">103</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">APAC Finance</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">APAC Facilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">APAC Operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">121</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">APAC Tech</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">397</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">APAC Fulfillment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">APAC Private Label</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">APAC Management Office</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">APAC Legal</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">APAC Internal Audit</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">1,508</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 10pt"><B>Region</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Number of Employees</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 88%"><FONT STYLE="font-size: 10pt">United States</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">794</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">China</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">567</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Taiwan</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">121</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Canada</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">26</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt"><B>1,508</B></FONT></TD>
    <TD>&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the holiday season, Newegg have historically added temporary workers to augment its full-time work force.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_167"></A>Facilities</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of June 30, 2020, Newegg leased the following principal
facilities:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Description
                                         of Use</B></FONT></P></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Approximate Square Footage</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Geographic Location</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Lease Expirations</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">(in&nbsp;thousands)</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; width: 41%; text-align: left">Corporate office facilities</TD><TD STYLE="text-align: left; width: 1%; vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 1%; text-align: left">&nbsp;</TD><TD STYLE="vertical-align: top; width: 12%; text-align: right">149,057</TD><TD STYLE="vertical-align: top; width: 1%; text-align: left">&nbsp;</TD><TD STYLE="text-align: left; width: 1%; vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 12%; text-align: center">North&nbsp;America</TD><TD STYLE="text-align: left; width: 1%; vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 30%; text-align: center">12/31/2022 through 11/30/2029</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="vertical-align: top; text-align: left"><P STYLE="margin: 0pt 0">Fulfillment and warehouse operations</P></TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: left">&nbsp;</TD><TD STYLE="vertical-align: top; text-align: right">1,302,738</TD><TD STYLE="vertical-align: top; text-align: left">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">North America</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">10/31/2021 through 11/30/2029</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of June 30, 2020, Newegg owned the following principal facilities:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-size: 10pt"><B>Description of Use</B></FONT></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Approximate Square Footage</B></FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Geographic Location</B></FONT></TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: bottom; width: 78%"><FONT STYLE="font-size: 10pt">Corporate office facilities</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="width: 8%; text-align: right"><P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">362,044</P></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: center"><FONT STYLE="font-size: 10pt">China</FONT></TD></TR>
<TR STYLE="background-color: white">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Corporate office facilities</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="text-align: right"><P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">3,369</P></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">Taiwan</FONT></TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Fulfillment and warehouse operations</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="text-align: right"><P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">109,473</P></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">China</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s corporate headquarters is located in City of
Industry, California. Newegg also leases additional corporate office facilities and fulfillment and warehouse operations throughout
North America, principally in California, Indiana and New Jersey in the United States and Toronto in Canada. Outside of North America,
Newegg also owns or leases corporate office facilities and fulfillment and warehouse operations, principally in China, Taiwan and
the United Kingdom. Newegg&rsquo;s Asia headquarters is in Shanghai. Newegg periodically evaluates its facility requirements as
necessary and believes its existing and planned facilities will be sufficient for its needs for at least the next twelve months.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_168"></A>Seasonality</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
business performance is subject to seasonal fluctuations. It has undergone and expects to continue to undergo an increase in activity
during the year-end holiday period. These seasonal effects cause differences in revenues and expenses among the various quarters
of any financial year, which means that the individual quarters should not be directly compared with each other or be used to
predict annual financial results. This intra-year seasonal fluctuation in demand is in accord with historic experience in the
retail and e-commerce industries, with increased volumes during the fourth calendar quarter of the year.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_169"></A>Government
Regulations</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
is subject to U.S. federal and state consumer protection laws, including laws protecting the privacy of customer non-public information
and regulations prohibiting unfair and deceptive trade practices. Other existing and future laws cover issues such as user privacy,
spyware and the tracking of consumer activities, marketing e-mails and communications, other advertising and promotional practices,
money transfers, pricing, content and quality of products and services, taxation, electronic contracts and other communications
and information security.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Particularly,
under applicable federal and state laws and regulations addressing privacy and data security, Newegg must provide notice to consumers
of its policies with respect to the collection and use of personal information, and its sharing of personal information with third
parties, and notice of any changes to its data handling practices. In some instances, Newegg may be obligated to give customers
the right to prevent sharing of their personal information with third parties. Under applicable federal and state laws, Newegg
also is required to comply with a number of requirements when sending commercial email to consumers, including identifying advertising
and promotional emails as such, ensuring that subject lines are not deceptive, giving consumers an opportunity to opt-out of further
communications and clearly disclosing its name and physical address in each commercial email. Regulation of privacy and data security
matters is an evolving area, with new laws and regulations enacted frequently. For example, California recently enacted legislation
that, among other things, requires new disclosures to California consumers, and affords such consumers new abilities to opt out
of certain sales of personal information, effective January 1, 2020. In addition, under applicable federal and state unfair competition
laws, including the California Consumer Legal Remedies Act, and U.S. Federal Trade Commission, or FTC, regulations, Newegg must
accurately identify product offerings, not make misleading claims on its platforms, and use qualifying disclosures where and when
appropriate.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
is also great uncertainty over whether or how existing laws governing issues such as property ownership, sales and other taxes,
auctions, libel and personal privacy apply to the Internet and commercial online services. For example, tax authorities in a number
of states are currently reviewing the appropriate tax treatment of companies
engaged in online commerce, and new state tax regulations may subject the Company to additional state sales and income taxes.
Additionally, new state legislation may also subject it to other types of taxes. New legislation or regulation, the application
of laws and regulations from jurisdictions whose laws do not currently apply to its business or the application of existing laws
and regulations to the Internet and commercial online services could result in significant additional taxes or regulatory restrictions
on its business or may necessitate changes to its business practices. These obligations or changes could have an adverse effect
on Newegg&rsquo;s financial position and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
international operations are subject to foreign laws and regulations addressing topics such as customs duties and taxes,
advertising and marketing practices, privacy, data protection and information security and consumer rights, as well as
additional laws and regulations, including restrictions on imports from, exports to, and services provided to persons located
in certain countries and territories, any of which might apply by virtue of Newegg&rsquo;s operations in foreign countries
and territories or its contacts with consumers in such foreign countries and territories. For example, in Canada, Newegg is
subject to labor and employment laws, laws governing advertising, privacy and data security laws, safety regulations and
other laws, including consumer protection regulations that apply to online retailers and/or the promotion and sale of
merchandise and the operation of stores and warehouse facilities. Newegg monitors changes in these laws, regulations,
treaties and agreements, and believes that Newegg is in material compliance with applicable laws.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_170"></A>Legal
Proceedings</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">From
time to time, Newegg may be involved in legal proceedings in the ordinary course of its business. Except as disclosed below, Newegg
is currently not a party to any material legal or administrative proceedings.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In February 2018, the Commonwealth of Massachusetts Department
of Revenue issued a notice of intent to assess sales/use taxes on Newegg for the period from October 1, 2017 through October 31,
2017 for a total assessment of $652,254.68 including penalties and interest. The Department of Revenue subsequently reduced this
amount to $295,910.68. In May 2020, Newegg received from the Commonwealth of Massachusetts Department of Revenue another notice
of assessment for sales and use taxes for the months of November 2017 through September 2018 in the amount of $2,721,369.77, including
penalties and interest. Newegg has appealed these assessments and Newegg intends to vigorously protest them. The outcome of this
matter or the timing of such payments, if any, cannot be predicted at this time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2017, Newegg, along with two of its subsidiaries and various third parties, were named as defendants in a case brought by
four South Korean banks in U.S. District Court for the Central District of California. The complaint alleged claims for
intentional and negligent misrepresentation, negligent supervision and unfair competition, and sought damages against, among
other entities, Newegg and two of its subsidiaries. In April 2018, the Court dismissed all claims against Newegg Trading
Limited without prejudice. In October 2018, the court granted Newegg&rsquo;s motion to dismiss all claims against Newegg and
its remaining subsidiary without leave to amend.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
December 2014, an individual plaintiff sued Newegg&rsquo;s subsidiary, Newegg.com Americas Inc. in Superior Court in Los
Angeles County, California, alleging that Newegg.com Americas Inc. had engaged in deceptive advertising practices and seeking
to certify a class action. In 2016, the trial court sustained Newegg.com Americas Inc.&rsquo; demurrer to the
plaintiff&rsquo;s claims without leave to amend. The plaintiff appealed, and in July 2018 an appellate court reversed the
decision of the trial court, thus allowing the case to proceed. The matter is now pending in the trial court, with Newegg having been added as a defendant. Newegg does not
believe that a loss is probable and intends to vigorously defend itself and its subsidiaries. Depending on the amount and
timing, an unfavorable result could materially affect Newegg&rsquo;s business, consolidated results of operations, financial
position or cash flows.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_171"></A>MANAGEMENT&rsquo;S
DISCUSSION AND ANALYSIS OF FINANCIAL</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>CONDITION
AND RESULTS OF OPERATIONS FOR THE COMPANY</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>The
following discussion should be read together with the audited financial statements and the related notes thereto of the Company
for the fiscal years ended December 31, 2019, 2018 and 2017 included elsewhere in this proxy statement/prospectus. This discussion
contains certain forward-looking statements that reflect plans, estimates and beliefs and involve numerous risks and uncertainties,
including but not limited to those described in the &ldquo;Risk Factors&rdquo; and &ldquo;Cautionary Statement Regarding Forward-Looking
Statements&rdquo; sections of this proxy statement/prospectus. Actual results may differ materially from those contained in any
forward-looking statements. You should carefully read &ldquo;Cautionary Statement Regarding Forward-Looking Statements&rdquo;
in this proxy statement/prospectus.</I></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_172"></A>Overview</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our business of product sales is divided into two parts: (i)
medical products such as CPR instruments; and (ii) mobile medicine, primarily wearable sleep respiratory solution for OSAS. For
the six months ended June 30, 2020 and 2019, our total revenues from product sales amounted to approximately $0.31 million and
$0.14 million, respectively. For the years ended December 31, 2019, 2018 and 2017, our total revenues from product sales from
continuing operations amounted to approximately $0.21 million, $0.34 million, and $0.88 million, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Since 2018, we started to earn service revenue from provision
of technical services in relation to detection and analysis of OSAS. We focused on the promotion of sleep respiratory solutions
and service in public hospitals. Our wearable sleep diagnostic products and cloud-based service are also available in medical
centers of private preventive healthcare companies in China. For the six months ended June 30, 2020 and 2019, our total service
revenues generated from provision of OSAS diagnostic services amounted to approximately $0.03 million and $0.10 million, respectively.
For the years ended December 31, 2019 and 2018, our total service revenues generated from provision of OSAS diagnostic services
amounted to approximately $0.17 million and $0.22 million, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our revenues are subject to VAT and sales returns. We deduct
these amounts from our gross revenue to arrive at our total revenue. Our net loss attributable to the Company for the six months
ended June 30, 2020 and 2019 was approximately $1.70 million and $3.31 million, respectively. For the years ended December 31,
2019, 2018 and 2017, our net loss attributable to the Company was approximately $4.45 million, $8.91 million, and $5.14 million,
respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
discontinued since 2016, as appropriate, the unprofitable medical device businesses, including assembly and sales of X-ray machines,
laryngoscope, anesthesia machines, the first-generation ventilator, monitoring devices, general medical products, oxygen therapy,
oxygen generator and telemedicine. Only a few potentially profitable businesses such as sales of CPR instruments have continued.
Our corporate and business restructuring plan aims to concentrate resources on developing our mobile health business, including
the wearable sleep respiratory device business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe these changes are crucial to improve our competitive advantages in the industry in the future. By reducing our reliance
on our less profitable medical devices assembly and distribution businesses, we are able to leverage our resources to develop
smart health products and services, which we see as a positive development and focus for the future of the Company. Our long-term
goal is to gradually decrease our production business and focus instead on developing a complete mobile health operation platform.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have continued to establish relationships with pilot hospitals to deliver our wearable solutions and products for OSAS, driving
the market growth in the hospitals in the regions where the pilot hospitals located, which helped to push forward our strategic
market expansion for public hospitals. So far, wearable diagnosis and analysis systems for OSAS have been successfully delivered
to certain major hospitals in China. We aim to intensify usage of our system in those hospitals and other institutions where we
have already successfully launched. Our target is to gradually promote our business from sleep centers, respiratory departments,
and Ear/Nose/Throat departments to other hospital departments with strong demand for sleep monitoring including those accommodating
patients seeking care (inpatient and outpatient) for key chronic diseases, such as hypertension, heart disease, diabetes and strokes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have also targeted the private physical examination centers
market. Our wearable OSAS diagnosis and analysis system has been successively launched in certain private check-up centers, such
as Ciming Aoya Hospital and Sonqao Health Checkup Institution. The number of customers for sleep diagnostic services has been
stable and we are making efforts to improve the market acceptance of our products and services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, we may explore the feasibility of cooperating with commercial health insurance companies in the development of sleep
respiratory solutions. In the long run, we expect to work with insurance companies to launch health insurance program providing
OSAS diagnosis and analysis under their insurances. We will continue to focus on sleep health with our comprehensive OSAS solution
system, aiming to become a leading domestic product and service provider in this market.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_173"></A>Recent
Developments</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>COVID-19
</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The ongoing COVID-19 pandemic that first surfaced in China
and is spreading throughout the world has had a material adverse effect on our business. All of our operating subsidiaries are
located in China, and substantially all of our employees and all of our customers and suppliers are located in China. From January
to February 2020, our service revenue plunged, as the number of patient users decreased sharply; and our revenue from the sale
of products also dropped, because our distributors and sales personnel were trapped at home and our contract manufacturers shut
down production during this period. Constrained by the epidemic, management and employees have been working from home to mitigate
the impacts of operation disruptions caused by COVID-19. As of the date of this proxy statement/prospectus, we have resumed operations
but at below normal levels. Medical check-up centers and hospitals in China that we have business relationships with have partially
resumed operations since March 2020, including the medical check-up centers in Wuhan that focus on physical examinations. In addition,
while our supply chains currently are not affected, it is unknown whether or how they may be affected if the pandemic persists
for an extended period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The COVID-19 pandemic has a limited adverse impact on our operating
results for the first six months of 2020, compared to that for the same period of 2019, but may materially adversely impact our
results of operations for the fiscal year ending December 31, 2020, depending on COVID-19&rsquo;s future developments and actions
taken to contain it. Our total revenue increased by 40% from approximately $0.24 million for the six months ended June 30, 2019
to approximately $0.34 million for the six months ended June 30, 2020, mainly due to an increase of approximately $0.17 million
in product sales, partially offset by a decrease in service revenue from the provision of OSAS diagnostic services of $74,732,
as COVID-19 caused patient users to decrease in the hospitals and medicals centers we cooperate with.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
will continue to monitor and mitigate developments affecting our workforce, our customers, and the public at large. See &ldquo;Risk
Factors&mdash;Risks Related to the Business of the Company&mdash;Risks Relating to Our Business&mdash;The outbreak of coronavirus
may have a material adverse effect on our business and the trading price of our common shares.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Management
Changes</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 1, 2020, Mr. Ping Chen resigned from his positions as Chief Executive Officer and director of the Company. Mr. Chen&rsquo;s
resignation was not a result of any disagreement with the Company on any matter relating to the Company&rsquo;s operations, policies
or practices. On the same date, Mr. Zhitao He was appointed as Chief Executive Officer of the Company. On the same date, the Company&rsquo;s
Interim Chief Financial Officer, Ms. Yingmei Yang, was appointed as a director to fill the vacancy created by Mr. Chen&rsquo;s
resignation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 24, 2020, Mr. Xiaogang Tong resigned from his positions as an independent director and member of each committee of the board
of directors. Mr. Tong&rsquo;s resignation was not a result of any disagreement with the Company on any matter relating to the
Company&rsquo;s operations, policies or practices. On the same date, the board of directors appointed Mr. Fuya Zheng as a director
and member of each committee of the board of directors, and chair of audit committee.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 12, 2020, Mr. He resigned from his positions as Chief Executive Officer, Chairman and director of the Company.&nbsp;Mr.
He&rsquo;s resignation was not a result of any disagreement with the Company on any matter relating to the Company&rsquo;s operations,
policies or practices. On August 25, 2020, the board of directors appointed Mr. Bin Lin as Chief Executive Officer and Chairman
of the Company to fill the vacancies created by Mr. He&rsquo;s resignation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Disposition
of Beijing Dehaier</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On August 13, 2020, Lianluo Connection entered into a share
transfer Agreement with China Mine United Investment Group Co., Ltd., or China Mine, pursuant to which Lianluo Connection transferred
its 100% equity interests in Beijing Dehaier to China Mine for cash consideration of RMB 0. In exchange for all of the equity interests
in Beijing Dehaier, China Mine agreed to assume all liabilities of Beijing Dehaier. The board of directors of the Company approved
the transaction after it received a written opinion rendered by Benchmark, the independent financial advisor to the board, to the
effect that, as of the date of such opinion, the consideration to be received by the Company in the sale of Beijing Dehaier is
fair to the Company&rsquo;s shareholders from a financial point of view.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Share Combination</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On October 21, 2020, we amended and restated our memorandum
and articles of association to complete a share combination of our common shares at a ratio of one-for-eight, which decreased
our outstanding Class A common shares from 17,685,475 shares to 2,210,683 shares and our outstanding Class B common shares from
11,111,111 shares to 1,388,888 shares. This share combination also decreased our authorized shares to 6,250,000 common shares
of par value of $0.021848 each, of which 4,736,111 are designated as Class A common shares and 1,513,889 are designated as Class
B common shares. Accordingly, except as otherwise indicated, all share and per share information contained in this proxy statement/prospectus
has been restated to retroactively show the effect of this share combination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_174"></A>Factors
Affecting Our Results of Operations Generally</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe the most significant factors that directly or indirectly affect our revenues and net income are:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         ability to position our products and services in different market segments, including
                                         our recent efforts to sell our products and services to hospitals and other healthcare
                                         facilities nationwide;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         ability to price our products and services at levels that provide favorable and acceptable
                                         margins amidst increasing pressure from our competitors who also seek better pricing
                                         strategy for their own benefit;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">new
                                         products and services introduced by us as well as our competitors. The introduction of
                                         new products and services by our competitors may lead to a decrease in sales and market
                                         share of our products and services, or force us to sell our products and services at
                                         reduced prices or margins;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         ability to carry out our new business initiatives effectively;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         ability to attract and retain distributors and key customers;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         ability to retain key employees, and our ability to build, expand, manage, and train
                                         our R&amp;D engineers and sales representatives;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         capability of gathering and analyzing market data, such as market capacity, new market
                                         trends, market share, and competitive landscape;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
                                         ability to establish, promote, and maintain the public relations image of the Company
                                         and product brands; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">changes
                                         in macro-economic environment, both global and domestic, as well as healthcare-related
                                         government policies and legislation.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
business is primarily conducted in China and all of our revenues are denominated in RMB. The conversion of RMB into U.S. dollars
for our financial data during the fiscal year ended December 31, 2019 is based on the middle exchange rate in China for cable
transfers of RMB as certified for customs purposes promulgated by the People&rsquo;s Bank of China. The conversion of RMB into
U.S. dollars for our financial data during the fiscal years ended December 31, 2018 and 2017 is based on the noon buying rate
in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York.
Our income statements are translated into U.S. dollars at the average exchange rates in each applicable period. To the extent
the U.S. dollar strengthens against RMB, the translation of these foreign currency-denominated transactions results in reduced
revenues, operating expenses and net income for our non-U.S. operations. Similarly, to the extent the U.S. dollar weakens against
RMB, the translation of RMB transactions results in increased revenues, operating expenses and net income for our non-U.S. operations.
We are also exposed to foreign exchange rate fluctuations as we convert the financial statements into U.S. dollars in consolidation.
We make no representation that any RMB or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or RMB,
as the case may be, at any particular rate, or at all. The government of the People&rsquo;s Republic of China imposes control
over its foreign currency reserves in part through direct regulation of the conversion of RMB into foreign exchange and through
restrictions on foreign trade. The Company does not currently engage in currency hedging transactions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
a detailed discussion of other factors that may cause our net revenues to fluctuate, see &ldquo;Risk Factors&mdash;Risks Related
to the Business of the Company&mdash;Risks Relating to Our Business.&rdquo;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_175"></A>Components
of Operating Results</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Revenues</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
total revenues are derived from our medical devices and sleep respiratory businesses. Starting from 2018, we redirected our operations
from unprofitable product sales of medical products and mobile medicines to marketing and expanding OSAS diagnosis services in
hospitals and physical examination centers.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
capture market share and execute the strategy of sales promotion, we suffered a loss from the sleep respiratory solutions business.
Our management believes that we will be able to improve the profit margins for our sleep respiratory solutions and will make the
relevant products and service an important growth driver of the Company in the coming years.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Medical
Products (Including Related Supporting Products) &ndash; Our Proprietary and Distributed Products</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
derive revenues in our medical equipment product line from the sale of general hospital products and related supporting products
and medical compressor. We continue to strategically reduce our sales of traditional medical devices, and to fully realize our
business focus shift from traditional medical equipment distribution to the market exploration of medical products and services
based on the technology of the mobile internet, including delivering comprehensive sleep respiratory solution for OSAS patient
care management other medical products. Our sale of proprietary and distributed products accounted for approximately 92% of the
total revenue for the six months ended June 30, 2020 and for approximately 55% of the total revenue for the fiscal year 2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
discontinued, as appropriate, the unprofitable medical device business, including assembly and sales of C-arm X-ray machines,
laryngoscope, anesthesia machines, the first-generation ventilator, monitoring devices, general medical products, oxygen therapy,
oxygen generator and telemedicine. We plan to maintain only a few profitable businesses on sales of our patented products including
medical air compressors, the second-generation ventilator and CPR instruments.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>OSAS
service (analysis and detection) </U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
will derive revenues in our sleep respiratory line from sales of OSAS test and service. We anticipate that, on a percentage basis,
revenues from OSAS analysis and detection business line will increase more rapidly in the near term, as we introduce new and more
advanced equipment and services and focus on the promotion of sleep respiratory solutions and service in public hospitals. Our
wearable sleep diagnostic products and cloud-based service are also available in medical centers of Chinese leading private preventive
healthcare companies in China. We strongly believe in the tremendous growth potential of this business in the coming years. During
the past year, the sleep respiratory business has achieved more progress in which we have continued to expand to public hospitals
and physical examination centers. In 2018, management focused on introducing more advanced products and penetrating the market
for sleep respiratory business. We have broadened and differentiated our target markets by cooperating with different types of
medical institutions and individual customers across China. We plan to expand our product portfolio through continued investment
in research and development and pursuing attractive opportunities to acquire complementary products and technologies and strategic
collaboration with partners. We will continue to pursue sustainable growth by enhancing our capability of delivering the systems
to more medical institutions and by promoting application of sleep respiratory systems we delivered. We will also continue to
focus on the development of the sleep respiratory systems in private physical examination chains and life insurance companies
which we believe to have large quantities of potential customers for sleep diagnosis.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We continue to devote proactive efforts to developing the wearable
OSAS solution systems by marketing and expanding OSAS diagnosis, CPAP products and post-treatment evaluation services in hospitals
and private medical examination centers nationwide, leveraging our well-established distribution network resources. Our portable
sleep diagnostic devices business accounted for approximately 8% of the total revenue for the six months ended June 30, 2020 and
for 45% of the total revenue for the year 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following represents the revenues by categories, all derived from China:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six Months Ended<BR> June
    30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Years Ended December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1.5pt solid"><B>Categories</B></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Product sales</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; text-align: left; padding-left: 13.5pt">Medical Devices</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">295,726</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">59,722</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">58,750</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">221,414</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">827,032</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 13.5pt">Mobile Medicine (sleep apnea diagnostic products)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">17,240</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">81,550</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">153,644</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">120,930</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">54,979</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Total product sales</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">312,966</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">141,272</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">212,394</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">342,344</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">882,011</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">OSAS service (analysis and detection)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">26,209</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">100,941</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">171,064</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">217,042</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Total revenues</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">339,175</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">242,213</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">383,458</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">559,386</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">882,011</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Cost
of Revenues</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Cost of revenues primarily includes costs of materials, wages,
depreciation on our production plant and equipment and depreciation expenses of fixed assets for the provision of services, other
expenses associated with the distribution of product, and amortization of software copyrights and other software related to our
products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Selling
Expenses</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Selling
expenses consist primarily of salaries and related expenses for personnel engaged in sales, marketing and customer support functions,
and costs associated with advertising and other marketing activities, and depreciation expenses related to equipment used for
sales and marketing activities. As our growth strategies shift, we believe selling expenses will be lower than the current level
which would improve profitability of our operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>General
and Administrative Expenses</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">General
and administrative expenses primarily consist of salaries and benefits and related costs for our administrative personnel and
management, stock-based compensation, expenses associated with our research and development, registration of patents and intellectual
property rights in China and abroad, fees and expenses of our outside advisers, including legal, audit and register expenses,
expenses associated with our administrative offices, and the depreciation of equipment used for administrative purposes. We expect
that in the near future, our general and administrative expenses will be lower than the current level which would improve profitability
of our operations.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_176"></A>Results
of Operations</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Starting
from 2018, we redirected our operations from unprofitable product sales of medical products and mobile medicines to marketing
and expanding OSAS diagnosis services in hospitals and physical examination centers. However, the provision of these OSAS diagnosis
services is still in its early stage and we may need to invest more marketing efforts in order to build up and consolidate our
partnership with hospitals and physical examination centers in China.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Six Months Ended June 30, 2020 and 2019</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table sets forth the components of our results
of operations both in U.S. dollar amounts and as a percentage of total revenues for the periods indicated.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the Six Months Ended
    June 30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Changes</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">USD</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">USD</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">USD</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; font-weight: bold">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">339,175</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">100.00</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">242,213</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">100.00</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">96,962</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">40.03</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt">Cost of revenues</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(580,572</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(171.17</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(418,227</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(172.67</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">162,345</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">38.82</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Gross loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(241,397</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(71.17</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(176,014</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(72.67</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">65,383</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">37.15</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Selling expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(43,725</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12.89</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(556,213</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(229.64</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(512,488</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(92.14</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">General and administrative&nbsp;expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,200,494</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(353.95</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,753,718</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(724.04</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(553,224</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(31.55</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Provision for doubtful accounts</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(28,963</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(8.54</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(43,873</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(18.11</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(14,910</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(33.98</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Operating loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,514,579</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(446.55</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,529,818</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,044.46</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,015,239</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(40.13</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Financial expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(570</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.17</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,911</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3.27</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,341</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(92.79</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Other income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,682</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8.95</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(21,682</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(100.00</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(24,021</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7.08</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(18,044</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7.45</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,977</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33.12</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Unrealized loss on securities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">143,478</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">42.30</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(678,304</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(280.04</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(534,826</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(78.85</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Change in fair value of warrants liability</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(300,304</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(88.54</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(99,820</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(41.21</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">200,484</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">200.85</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt">Net loss</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(1,695,996</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(500.04</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(3,312,215</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(1,367.48</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(1,616,219</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(48.80</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Revenues</I>. Our total revenue increased by 40% from approximately
$0.24 million for the six months ended June 30, 2019 to approximately $0.34 million for the six months ended June 30, 2020, mainly
due to the increase of approximately $0.17 million in revenue from product sales, partially offset by the decrease in service
revenue from the provision of OSAS diagnostic services of $0.07 million. In the first half of 2020, our revenue from sale of medical
equipment and provision of technical services in relation to OSAS was approximately $0.31 million and $0.03 million, respectively,
compared to approximately $0.14 million and $0.10 million for the same period last year. The revenue of CPR increased mainly due
to an order from one of our major customers. The revenue of OSAS diagnostic services decreased due to the spread of COVID-19,
as patient users in the hospitals and physical examination centers we cooperate with decreased.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Costs of Revenue</I>. Our costs of revenue increased by
39% from approximately $0.42 million for the six months ended June 30, 2019 to approximately $0.58 million for the six months
ended June 30, 2020. The increase in cost of revenues was generally in line with the increase of revenues<I>.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Gross Loss</I>. Our gross loss was approximately $0.18 million,
or 73% of our total revenue for the six months ended June 30, 2019 while our gross loss is approximately $0.24 million, or 71%
of our total revenue in the same period of 2020. We incurred significant amounts of relatively fixed costs of revenues, in particular
depreciation of our long-lived assets related to our product and service revenues in 2020 and 2019, resulting in a high gross
loss both in dollar terms and percentage terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Selling Expenses</I>. Our selling expenses decreased by
92% from approximately $0.56 million for the six months ended June 30, 2019 to approximately $0.04 million for the six months
ended June 30, 2020. The decrease in selling expenses was mainly due to dismissal of sales personnel and reducing participation
in medical device exhibitions due to COVID-19.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>General and Administrative Expenses</I>. Our general and
administration expenses decreased by 32% from approximately $1.75 million for the six months ended June 30, 2019 to approximately
$1.20 million for the six months ended June 30, 2020. The decrease was mainly due to the reduction of headcount in 2020 and resulting
in reduced expenses, which decreased from approximately $1.04 million in the six months ended June 30, 2019 to approximately $0.64
million in the same period of 2020. In addition, the company&rsquo;s rent and property expenses also decreased from approximately $0.19
million for the six months ended June 30, 2019 to approximately $0.06 million for the same period of 2020 after termination of
some lease agreements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Provision for Doubtful Accounts</I>. Our provision for doubtful
accounts decreased by 34% from the amount of $43,873 for the six months ended June 30, 2019 to $28,963 for the six months ended
June 30, 2020. A reserve for doubtful accounts on our receivable, if required, is based on a combination of historical experience,
aging analysis, and an evaluation of the collectability of specific accounts. Management considers that receivables over 1 year
to be past due. Accounts receivable balances are charged off against the reserve after all means of collection have been exhausted
and the potential for recovery is considered remote.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Operating Loss</I>. As a result of the foregoing, we incurred
an operating loss of approximately $1.51 million in the six months ended June 30, 2020, compared to an operating loss of approximately
$2.53 million in the same period of 2019, representing a decrease of 40%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Unrealized Gain (Loss) on Securities</I>. Equity investments
with readily determinable fair values are measured at fair value. We had an unrealized gain of approximately $0.14 million for
the six months ended June 30, 2020, due to the rise of the share price of our marketable investments, compared to an unrealized
loss of approximately $0.68 million as a result of the fall of the share price of those investments in the same period of 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Change in Fair Value of Warrants Liability</I>. For the
six months ended June 30, 2019, the loss related to changes in the fair value of warrants liability was approximately $0.10 million,
compared to a loss of approximately $0.30 million for the six months ended June 30, 2020, relating to the warrants issued to our
major shareholder, Hangzhou Lianluo, in 2016. The warrants, together with restricted common shares, were issued pursuant to a
securities purchase agreement with Hangzhou Lianluo in August 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Taxation</I>. We incurred operating losses in the six months
ended June 30, 2020 and 2019, and thus, had no income tax expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Net Loss</I>. As a result of the foregoing, we had net loss
and net loss attributable to the Company of approximately $1.70 million for the six months ended June 30, 2020, compared to approximately
$3.31 million in the same period of 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Years Ended December 31, 2019, 2018 and 2017</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth the components of our results of operations both in U.S. dollar amounts (in thousands) and as a percentage
of total revenues for the years indicated.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="22" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the Years Ended December
    31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Changes</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Changes</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019 vs. 2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018 vs. 2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">USD</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">USD</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">USD</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">USD</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">USD</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">(&rsquo;000)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">(&rsquo;000)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">(&rsquo;000)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">(&rsquo;000)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">(&rsquo;000)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 20%; font-weight: bold; text-indent: -9pt; padding-left: 9pt">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; text-align: right">383</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; text-align: right">100</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; text-align: right">559</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; text-align: right">100</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; text-align: right">882</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; text-align: right">100</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; text-align: right">(176</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; text-align: right">(31</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; text-align: right">(323</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; text-align: right">(37</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Cost of revenues</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(744</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(194</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(758</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(136</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,656</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(188</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(14</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">(2</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(898</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">(54</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt">Gross loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(361</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(94</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(199</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(36</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(774</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(88</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(162</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(81</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">575</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">74</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Service income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">56</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(56</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(100</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Service expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(100</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Selling expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(835</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(218</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,083</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(373</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,170</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(132</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,248</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(60</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">913</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">78</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">General and administrative&nbsp;expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,594</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(677</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,675</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(657</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,192</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(362</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,081</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(29</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">483</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">(Provision for) recovery from doubtful accounts</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(22</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(41</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(45</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(196</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Impairment loss for intangible assets</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,282</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(587</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,282</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">(100</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,282</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Operating loss</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,803</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(993</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(9,261</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,657</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(5,058</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(573</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,458</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">59</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(4,203</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">(83</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Financial (expenses) income</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(38</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(7</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">57</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">39</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">103</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(95</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">(167</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Other income (expense), net</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(32</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(8</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(211</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(38</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">94</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">11</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(179</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">(85</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(305</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">(324</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Unrealized loss on marketable securities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,357</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(354</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,357</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Change in fair value of warrants
    liability</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">740</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">193</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">600</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">107</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(229</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(26</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">140</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">23</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">829</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">361</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Net loss</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(4,451</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(1,162</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(8,910</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(1,594</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(5,136</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(582</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">4,459</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: right">50</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(3,774</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: right">(73</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Fiscal
Year Ended December 31, 2019 Compared to Fiscal Year Ended December 31, 2018</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Revenues.
</I>Our total revenues from continuing operations decreased by 31% from $0.56 million for the fiscal year ended December 31, 2018
to $0.38 million for the fiscal year ended December 31, 2019. The decrease in revenue was caused by a reduction of product sales
by $0.13 million. Starting from 2018, we redirected our operations from unprofitable product sales of medical products and mobile
medicines to marketing and expanding OSAS diagnosis services in hospitals and physical examination centers.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Cost
of Revenues. </I>Our cost of revenues from continuing operations decreased by 2% from $0.76 million for the fiscal year ended
December 31, 2018 to $0.74 million for the fiscal year ended December 31, 2019. The decrease in cost of revenues was less than
the decrease in revenue, mainly because a significant part of cost of revenues is relatively fixed, such as the depreciation and
amortization of our long-lived assets related to our service revenues.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Gross
Loss. </I>Our gross loss from continuing operations increased from $0.20 million in 2018 to $0.36 million in 2019. Gross loss
as a percentage of income increased from 36% in 2018 to 94% in 2019. We incurred significant amounts of relatively fixed costs
of revenues, in particular depreciation and amortization of our long-lived assets related to our product and service revenues,
in 2019 and 2018, resulting in a high gross loss both in dollar terms and in percentage terms.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Selling
Expenses. </I>Our selling expenses from continuing operations decreased by 60% from $2.08 million for the year ended December
31, 2018 to $0.84 million for the year ended December 31, 2019. The decrease in selling expenses was mainly due to dismissal of
certain sales personnel and reducing participation in medical device exhibitions during 2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>General
and Administrative Expenses. </I>Our general and administration expenses from continuing operations decreased by 29% from $3.68
million for the year ended December 31, 2018 to $2.59 million for the year ended December 31, 2019. The decrease is mainly because
we incurred $0.94 million in 2018 for expenses relating to merger and acquisition activities, while we did not expend any on similar
activities in 2019. In addition, we dismissed some of our employees in 2019, resulting in reduced expenses. Research and development
expenses from continuing operations were $0 and $301,713 for the years ended December 31, 2019 and 2018, respectively. We expect
that in the near future, our general and administrative expenses will be lower than the current level in order to improve profitability
of our operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>(Provision
for) Recovery from Doubtful Accounts. </I>Our provision for doubtful accounts was $13,011 for the year ended December 31, 2019,
as compared to a provision from doubtful accounts from continuing operations of $22,229 for the year ended December 31, 2018.
A reserve for doubtful accounts on our accounts receivable, if required, is based on a combination of historical experience, aging
analysis, and an evaluation of the collectability of specific accounts. Management considers that receivables over 1 year to be
past due. Accounts receivable balances are charged off against the reserve after all means of collection have been exhausted and
the potential for recovery is considered remote.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Impairment
Loss for Intangible Assets. </I>We recorded impairment on our intangible assets from our continuing operations of $0 and $3,281,779
for the years ended December 31, 2019 and 2018, respectively. These intangible assets related to the software copyright of new-type
ventilators. In 2018, we suspended the research and development due to lower-than-expected product marketability and profitability,
and we determined not to further update and maintain its software copyright and patent. The unamortized intangibles were fully
impaired in 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Operating
Loss. </I>As a result of the foregoing, we incurred an operating loss of approximately $3.80 million in 2019, compared to approximately
$9.26 million in 2018, representing a decrease of 59%.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Change
in Fair Value of Warrants Liability. </I>For the year ended December 31, 2019, the fair value gain on warrants issued to our major
shareholder, Hangzhou Lianluo was $0.74 million, compared to a fair value gain of $0.60 million in 2018, relating to the warrants
issued to Hangzhou Lianluo and other investors and placement agents in 2016. The warrants, together with restricted common shares,
were issued pursuant to a securities purchase agreement with Hangzhou Lianluo in August 2016. The change in fair value of warrants
liability is mainly due to the share price decline since August 2016.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Taxation.
</I>We had no income tax expense in 2019 and 2018 as we incurred taxable loss in both years. And we made full valuation allowance
on deferred tax asset resulting from losses because it is more likely than not, we will not be able to utilize the tax benefits
in the foreseeable future.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Net
Loss and Net Loss Attributable to Company. </I>As a result of the foregoing, we had net loss and net loss attributable to the
Company of approximately $4.45 million in 2019, compared to approximately $8.91 million in 2018.&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Fiscal
Year Ended December 31, 2018 Compared to Fiscal Year Ended December 31, 2017</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Revenues.
</I>Our total revenues from continuing operations decreased by 37% from $0.88 million for the fiscal year ended December 31, 2017
to $0.56 million for the fiscal year ended December 31, 2018. The decrease in revenue was caused by a reduction of product sales
by $0.54 million, partially offset by service revenue from the provision of OSAS diagnostic services of $0.22 million. In 2018,
we redirected our operations from unprofitable product sales of medical products and mobile medicines to marketing and expanding
OSAS diagnosis services in hospitals and physical examination centers.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Cost
of Revenues. </I>Our cost of revenues from continuing operations decreased by 54% from $1.66 million for the fiscal year ended
December 31, 2017 to $0.76 million for the fiscal year ended December 31, 2018. The decrease in cost of revenues was generally
in line with the decrease of revenues.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Gross
Loss. </I>Our gross loss from continuing operations decreased from $0.77 million in 2017 to $0.20 million in 2018. Gross loss
as a percentage of income decreased from 88% in 2017 to 36% in 2018. We incurred significant amounts of relatively fixed costs
of revenues, in particular depreciation and amortization of our long-lived assets related to our product and service revenues,
in 2018 and 2017, resulting in a high gross loss both in dollar terms and in percentage terms.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Service
Income. </I>Our service income dropped from $0.06 million in 2017 to $0 in 2018. Service income represents the income of repair
service and technical service.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Selling
Expenses. </I>Our selling expenses from continuing operations increased by 78% from $1.17 million for the year ended December
31, 2017 to $2.08 million for the year ended December 31, 2018. The increase in selling expenses was mainly due to devoting more
resources in market development for the sleep respiratory business, such as employing more salesmen and participating in more
medical device exhibitions during 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>General
and Administrative Expenses</I>. Our general and administration expenses from continuing operations increased by 15% from $3.19
million for the year ended December 31, 2017 to $3.68 million for the year ended December 31, 2018. The increase is mainly due
to stock-based compensation to non-employees of $0.94 million incurred in 2018 for management consulting, merger and acquisition
planning and strategy implementation, partially offset by a decrease in stock-based compensation to employees by $0.43 million
in 2018, as compared to 2017. Research and development expenses from continuing operations were $301,713 and $344,575 for the
years ended December 31, 2018 and 2017, respectively. We expect that in the near future, our general and administrative expenses
will be lower than the current level in order to improve profitability of our operations.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>(Provision
for) Recovery from Doubtful Accounts. </I>Our provision for doubtful accounts was $22,229 for the year ended December 31, 2018,
as compared to a recovery from doubtful accounts from continuing operations of $23,608 for the year ended December 31, 2017. A
reserve for doubtful accounts on our accounts receivable, if required, is based on a combination of historical experience, aging
analysis, and an evaluation of the collectability of specific accounts. Management considers that receivables over 1 year to be
past due. Accounts receivable balances are charged off against the reserve after all means of collection have been exhausted and
the potential for recovery is considered remote.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Impairment
Loss for Intangible Assets. </I>We recorded impairment on our intangible assets from our continuing operations of $3,281,779 and
$0 for the years ended December 31, 2018 and 2017. During the year ended December 31, 2018, as a result of our lower-than-expected
revenue performance, we determined not to further update and maintain our software copyright and patent for the therapy products
of sleep respiratory business. The unamortized software copyright and patent and others of $3,281,779 were fully impaired.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Operating
Loss. </I>As a result of the foregoing, we incurred an operating loss of approximately $9.26 million in 2018, compared to approximately
$5.06 million in 2017, representing an increase of 83%.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Change in Fair Value of Warrants Liability. </I>For the
year ended December 31, 2018, the fair value gain on warrants issued to our major shareholder, Hangzhou Lianluo was $0.60 million,
compared to a fair value loss of $0.23 million for the year ended December 31, 2017, relating to the warrants issued to Hangzhou
Lianluo and other investors and placement agents in 2016. The warrants, together with restricted common shares, were issued pursuant
to a securities purchase agreement with Hangzhou Lianluo in August 2016. The warrants issued to other investors and placement
agents were redeemed during 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Taxation.
</I>We had no income tax expense in 2018 and 2017 as we incurred taxable loss in both years.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Net
Loss from Continuing Operations. </I>As a result of the foregoing, we had net loss from continuing operations of approximately
$8.91 million in 2018, compared to approximately $5.14 million in 2017.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Net
Loss and Net Loss Attributable to Company. </I>As a result of the foregoing, we had net loss and net loss attributable to the
Company of approximately $8.91 million in 2018, compared to approximately $5.14 million in 2017.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_177"></A>Liquidity
and Capital Resources</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Cash
Flows and Working Capital</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of June 30, 2020 and December 31, 2019, we had cash and
cash equivalents of $6.40 million and $0.02 million, respectively. We have suffered a net loss of $1.70 million and used $1.66
million of cash in operating activities for the six months ended June 30, 2020. This condition has raised substantial doubt about
our ability to continue as a going concern. The ability to continue as a going concern is dependent upon our profit generating
operations in the future and/or obtaining the necessary financing to meet our obligations and repay our liabilities arising from
normal business operations when they become due. Our consolidated financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.
Our consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset
amounts and classification of liabilities that might be necessary should we be unable to continue as going concern.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our principal sources of liquidity have been proceeds from
issuances of equity securities and loans from related parties. We had a working capital of $4.64 million as of June 30, 2020.
In February and March 2020, we obtained approximately $7.2 million from equity financings, net of placement agent&rsquo;s commissions
and other expenses. Considering the equity financings and our cost cutting activities, we believe that our current cash and cash
equivalents and our anticipated cash flows from operations will be sufficient to meet our anticipated working capital requirements
for the next 12 months.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On January 30, 2020, the World Health Organization declared
a public health emergency of international concern due to the COVID-19 outbreak and the risks to the international community as
the virus spreads globally. In March 2020, the World Health Organization classified the COVID-19 outbreak as a pandemic, based
on the rapid increase in exposure globally.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our service was suspended due to restrictions and hospital
closures except for essential services in February 2020 and recovered gradually since March 2020 as hospitals gradually resumed
business. The outbreak of COVID-19 and the business downturn since 2019 have had an adverse effect on our operations. The full
impact of the COVID-19 outbreak continues to evolve as of the date of this proxy statement/prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth a summary of our cash flows for the periods indicated:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 0; padding-right: 0; padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six Months Ended<BR> June
    30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Years Ended December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 0; padding-right: 0; padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>

<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-top: 0; width: 40%; text-align: left; padding-right: 0; padding-left: 10pt; text-indent: -10pt">Net cash
    used in operating activities</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(1,662,688</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(1,042,599</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(1,670,903</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(3,629,567</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(5,408,997</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-top: 0; text-align: left; padding-right: 0; padding-left: 10pt; text-indent: -10pt">Net cash provided by
    (used in) investing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(68,698</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,016</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,225,827</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,686,855</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-top: 0; text-align: left; padding-right: 0; padding-left: 10pt; text-indent: -10pt">Net cash provided by
    financing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,035,146</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">818,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,362,681</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,700,493</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,972,858</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding: 0 0 1.5pt 10pt; text-align: left; text-indent: -10pt">Effect of exchange rate fluctuations on cash and
    cash equivalents</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,196</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(130,964</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(169,269</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(177,275</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">139,656</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-top: 0; text-align: left; padding-right: 0; padding-left: 10pt; text-indent: -10pt">Net increase (decrease)
    in cash and cash equivalents</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,373,654</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(423,761</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(454,475</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,332,176</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,983,338</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding: 0 0 1.5pt 10pt; text-align: left; text-indent: -10pt">Cash and cash equivalents at beginning of period</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">22,834</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">477,309</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">477,309</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6,809,485</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">10,792,823</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding: 0 0 4pt 10pt; text-align: left; text-indent: -10pt">Cash and cash equivalents at end of period</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">6,396,488</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">53,548</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">22,834</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">477,309</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">6,809,485</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Operating
Activities</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net cash used in operating activities was $1,662,688 for the
six months ended June 30, 2020, as compared to $1,042,599 for the same period in 2019. The reason for this increase in cash outflows
is mainly due to an increase in accrued expenses and other current liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: left">Net cash used in operating
activities was $1,670,903 for the year ended December 31, 2019, compared to $3,629,567 for the year ended December 31, 2018. The
reasons for this change are mainly as follows: (i) net loss from operations was $4,450,994 in 2019, a decrease of approximately
$4.4 million from net loss of $8,910,002 for 2018; (ii) inventory decreased by $255,592 in 2019, while it increased by $137,464
in 2018; (iii) accrued expenses and other current liabilities from operations increased by $553,354 in 2019, compared with an
increase of $214,245 in 2018; and (iv) the value of non-cash items, including stock-based compensation, impairment loss and unrealized
loss on investments, decreased to approximately $1.6 million in 2019, from $4.7 million in 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Investing
Activities</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net cash used in investing activities for the six months ended
June 30, 2020 was $0, compared to $68,698 for the same period of 2019. The cash used in investing activities in the six months
ended June 30, 2019 was mainly attributable to the loans of $85,000 to a related party, Digital Grid.</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash provided by investing activities for the fiscal year 2019 was $23,016 compared to net cash of $6,225,827 used in investing
activities for the fiscal year 2018. The cash provided by investing activities in 2019 was all attributable to proceeds from disposal
of equipment. The cash used in investing activities in 2018 was mainly attributable to our capital expenditures of $0.8 million
and a loan of $5.4 million, net of repayment, to a related party.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Financing
Activities</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net cash provided by financing activities for the six months
ended June 30, 2020 was $8,035,146, which was a result of obtaining approximately $7.2 million from equity financings and short-term
loans of $0.84 million from Mr. Ping Chen. Net cash provided by financing activities for the six months ended June 30, 2019 was
$818,500, which was a result of obtaining short-term loans of $728,500 from Hangzhou Lianluo and $90,000 from a related party,
Digital Grid for twelve months.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net cash provided by financing activities in 2019 was $1,362,681,
which was mainly a result of obtaining short-term loans of $0.94 million from Hangzhou Lianluo, and $0.24 million from Mr. Ping
Chen. Net cash provided by financing activities in 2018 was $3,700,493, which was mainly a result of obtaining short-term loans
of $3.7 million from Hangzhou Lianluo.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of December 31, 2019, the Company has borrowings of $931,450
due to Hangzhou Lianluo. The loans due as of February 1, 2020, March 6 and April 7, 2020, totaling $167,661, were extended, interest-free
and without specific repayment date, which is based upon both parties&rsquo; agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Capital Expenditures</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We made capital expenditures of approximately $0 million, $0.78
million and $0.04 million in 2019, 2018 and 2017, respectively. We did not have any capital expenditures during the six months
ended June 30, 2020 and 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Holding
Company Structure</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is a holding company with no material operations of its own. We conduct all of our operations through our PRC subsidiary.
We are permitted under PRC laws and regulations to provide funds to our PRC subsidiary through capital contributions or loans,
subject to applicable government registration and approval requirements.&nbsp;The ability of our PRC subsidiary to make dividends
or other cash payments to us is subject to various restrictions under PRC laws and regulations. For more details regarding restrictions
and limitations on liquidity and capital resources as a result of our holding company structure, see &ldquo;Risk Factors&mdash;Risks
Related to the Business of the Company&mdash;Risks Relating to Doing Business in China&rdquo; of this proxy statement/prospectus.
If the Company requires material amounts of cash being transferred to it in the future, we will assess the feasibility and plan
cash transfers in accordance with foreign exchange regulations, taking into account of tax consequences.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_178"></A>Research
and Development</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our research and development capabilities have allowed us to
introduce new and more advanced products at competitive prices. Research and development costs from continuing operations were
$0, $301,713 and $344,575 for the years ended December 31, 2019, 2018 and 2017, respectively. There were no research and development
costs incurred for the year ended December 31, 2019 or for the six months ended June 30, 2020 and 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_179"></A>Off-Balance
Sheet Arrangements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties.
We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder&rsquo;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 research and development services with us.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_180"></A>Tabular
Disclosure of Contractual Obligations</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The table below shows our material contractual obligations
as of June 30, 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-bottom: 1.5pt; font-weight: bold">Contractual&nbsp;Obligations</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Payments Due by Period</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt; font-weight: bold"></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Less than <BR> 1&nbsp;year</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">1-3&nbsp;years</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">More than <BR> 3&nbsp;years</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; text-align: left; padding-bottom: 1.5pt">Operating lease obligations</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">17,753</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">17,753</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">Total</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">17,753</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">17,753</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
leased properties are principally located in the PRC, and we use such properties for product centers, administration and warehouse
facilities. The leases are renewable subject to negotiation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Critical
Accounting Policies </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
prepare financial statements in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions that
affect the reported amounts of our assets and liabilities and the disclosure of our contingent assets and liabilities at the end
of each fiscal period and the reported amounts of revenues and expenses during each fiscal period. We continually evaluate these
judgments and estimates based on our own historical experience, knowledge and assessment of current business and other conditions,
our expectations regarding the future based on available information and assumptions that we believe to be reasonable, which together
form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates
is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our
accounting policies require a higher degree of judgment than others in their application.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
selection of critical accounting policies, the judgments and other uncertainties affecting application of those policies and the
sensitivity of reported results to changes in conditions and assumptions are factors that should be considered when reviewing
our financial statements. For further information on our significant accounting policies, see notes to our consolidated financial
statements. We believe the following accounting policies involve the most significant judgments and estimates used in the preparation
of our financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Basis
of Consolidation</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company transactions
and balances are eliminated in consolidation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Accounts
Receivable</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounts
receivable are initially recorded at invoiced amount. Accounts receivable terms typically are net 60-180 days from the end of
the month in which the services were provided, or when goods were delivered. The Company generally does not require collateral
or other security to support accounts receivable. A reserve, if required, is based on a combination of historical experience,
aging analysis, and an evaluation of the collectability of specific accounts. Management considers that receivables over 1 year
to be past due. Accounts receivable balances are charged off against the reserve after all means of collection have been exhausted
and the potential for recovery is considered remote.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Warrant
Liability</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
warrants that are not indexed to the Company&rsquo;s stock, the Company records the fair value of the issued warrants as a liability
at each balance sheet date and records changes in the estimated fair value as a non-cash gain or loss in the consolidated statement
of operations and comprehensive income. The warrant liability is recognized in the balance sheet at the fair value (level 3).
The fair value of these warrants has been determined using the Black-Scholes pricing mode. The Black-Scholes pricing model provides
for assumptions regarding volatility, call and put features and risk-free interest rates within the total period to maturity.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Inventories</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inventories
are stated at the lower of cost or net realizable value and consist of assembled and unassembled parts relating to medical devices.
Cost is determined on a weighted-average basis. Management compares the cost of inventories with the net realizable value and
writes down their inventories to net realizable value, if lower. Net realizable value is based on estimated selling prices in
the ordinary course of business less cost to sell. These estimates are based on the current market and economic condition and
the historical experience of selling products of similar nature. It could change significantly as a result of changes in customer
taste and competitor actions in response to any industry downturn. The management of the Company reassesses the estimations at
the end of each reporting period.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Impairment
of Long-Lived Assets</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company reviews the long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount
of an asset may no longer be recoverable. When these events occur, the Company compares the carrying value of the long-lived assets
to the estimated undiscounted future cash flows expected to result from the use of the asset and eventual disposition. If the
sum of the expected future cash flows is less than the carrying amount of the asset, an impairment loss, equal to the excess of
the carrying amount over the fair value of the asset, is recognized. Fair value is generally determined using the asset&rsquo;s
expected future discounted cash flows or market value, if readily determinable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Intangible
Assets</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Intangible
assets subject to amortization are reviewed for impairment whenever events or circumstances indicate that the carrying amount
of an asset may not be fully recoverable. These intangible assets include the trade mark registered in the PRC and purchased software
which are amortized on a straight-line basis over a useful life of ten year. An impairment loss would be recognized if the sum
of the long-term undiscounted cash flows is less than the carrying amount of the long-lived asset being evaluated. Any write-downs
are treated as permanent reductions in the carrying amount of the assets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Based
on its review, the Company determined that, as of December 31, 2018, impairment loss for intangible assets was $3,281,779.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Equity
Securities</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s equity securities represent equity investments in Guardion Health Sciences, Inc., or GHSI, made in November 2017.
The Company holds less than 5% of the GHSI&rsquo;s total shares. For additional details, see the notes to our consolidated financial
statements. The equity securities were accounted for as non-marketable securities in 2018 on the balance sheets and as marketable
securities in 2019 when GHSI went public in April 5, 2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to January 1, 2018, the Company accounted for the equity securities at cost and only adjusted for other-than-temporary declines
in fair value and distributions of earnings. An impairment loss was recognized in the consolidated statements of operations equal
to the excess of the investment&rsquo;s cost over its fair value at the balance sheet date of the reporting period for which the
assessment was made. The fair value would then become the new cost basis of investments.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 1, 2018, the Company adopted Accounting Standards Update, or ASU, 2016-01 which changed the way it accounts for equity
securities. Non-marketable equity securities do not have readily determinable fair value and are accounted for under the measurement
alternative method of accounting. These non-marketable investments are measured at cost, less any impairment, plus or minus any
changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer.
Any cash or stock dividends paid to us on such investments are reported as noninterest income. Marketable equity securities have
readily determinable fair value and are accounted at fair value, with changes in fair value recorded through earnings.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of June 30, 2020, the investment was accounted at fair value
with changes recorded through earnings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Revenue
Recognition</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
May 2014 the Financial Accounting Standards Board, or FASB, issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic
606) (ASC 606), which supersedes all existing revenue recognition requirements, including most industry specific guidance. This
new standard requires a company to recognize revenues when it transfers goods or services to customers in an amount that reflects
the consideration that the company expects to receive for those goods or services.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
new revenue standards became effective for the Company on January 1, 2018 and were adopted using the modified retrospective method.
The adoption of the new revenue standards as of January 1, 2018 did not change the Company&rsquo;s revenue recognition as the
majority of its revenues continue to be recognized when the customer takes control of its product or services. As the Company
did not identify any accounting changes that impacted the amount of reported revenues with respect to its product revenues, no
adjustment to accumulated deficit was required upon adoption.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the new revenue standards, the Company recognizes revenues when its customer obtains control of promised goods or services, in
an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues
following the five step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance
obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations
in the contract; and (v) recognize revenues when (or as) the Company satisfies the performance obligation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following is a description of principal activities from which the Company generates revenue and related revenue recognition policies:</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sale
                                         of Medical Equipment</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company recognized revenue after it distributes products to customers and the control of products sold transfers to customers
upon shipment from the Company&rsquo;s facilities, and the Company&rsquo;s performance obligations are satisfied at that time.
Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfillment
activity rather than a promised service to the customer. The Company typically sells its branded products with standard warranty
terms covering 12 months after purchase. The warranty requires the Company to repair all mechanical malfunctions and, if necessary,
replace defective components. The Company also provides after-sale services for medical equipment, such as sleep apnea machines,
ventilator air compressors and laryngoscope in China.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluates its arrangements with distributors and determines that it is primarily obligated in the sales of distributed
products, is subject to inventory risk, has latitude in establishing prices, and assumes credit risk for the amount billed to
the customer, or has several but not all of these indicators. In accordance with ASC 606, the Company determines that it is appropriate
to record the gross amount of product sales and related costs. As the Company is a principal and it obtains control of the specified
goods before they are transferred to the customers, the revenues should be recognized in the gross amount of consideration to
which it expects to be entitled in exchange for the specified goods transferred.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Provision
                                         of Sleep Diagnostic Services</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
2018, the Company started to earn service revenue from provision of technical services in relation to detection and analysis of
OSAS. The Company is focused on the promotion of sleep respiratory solutions and service in public hospitals. Its wearable sleep
diagnostic products and cloud-based service are also available in medical centers of Chinese private preventive healthcare companies
in China. Revenue is recognized when all of the revenue recognition criteria are met, which is generally when the Company&rsquo;s
diagnostic services are provided to the user at medical centers and public hospitals.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the PRC, VAT of 13% of the invoice amount is collected in respect of the sales of goods on behalf of tax authorities. The VAT
collected is not revenue of the Company; instead, the amount is recorded as a liability on the balance sheet until such VAT is
paid to the authorities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Foreign
Currency Transaction</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accounts of the Company, Beijing Dehaier, and Lianluo Connection are measured using the currency of the primary economic environment
in which the entity operates (the functional currency). The accompanying consolidated financial statements are presented in US
dollars.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Foreign
currency transactions are translated into the functional currency using exchange rates in effect at the time of the transaction.
Generally, foreign exchange gains and losses resulting from the settlement of such transactions are recognized in the consolidated
statements of operations and comprehensive loss. The financial statements of the Company&rsquo;s foreign operations are translated
USD in accordance with ASC 830-10, &ldquo;Foreign Currency Matters&rdquo;. Assets and liabilities are translated at applicable
exchange rates quoted by the People&rsquo;s Bank of China at the balance sheet dates and revenues, expenses and cash flow items
are translated at average exchange rates in effect during the periods. Equity is translated at the historical exchange rates.
Resulting translation adjustments are recorded as other comprehensive income (loss) and accumulated as a separate component of
equity.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Stock-Based
Compensation</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company accounts for stock-based share-based compensation awards to employees at fair value on the grant date and recognizes the
expense over the employee&rsquo;s requisite service period. The Company&rsquo;s expected volatility assumption is based on the
historical volatility of Company&rsquo;s stock or the expected volatility of similar entities. The expected life assumption is
primarily based on historical exercise patterns and employee post-vesting termination behavior. The risk-free interest rate for
the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend
is based on the Company&rsquo;s current and expected dividend policy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Share-based
compensation expenses for stock-based share-based compensation awards granted to non-employees are measured at fair value at the
earlier of the performance commitment date or the date service is completed, and recognized over the period during which the service
is provided. The Company applies the guidance in ASC 718 to measure share options and restricted shares granted to non-employees
based on the then-current fair value at each reporting date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_181"></A>MANAGEMENT&rsquo;S
DISCUSSION AND ANALYSIS OF FINANCIAL<BR>
CONDITION AND RESULTS OF OPERATIONS FOR NEWEGG</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>The
following discussion should be read together with the audited financial statements and the related notes thereto of Newegg for
the fiscal years ended December 31, 2019, 2018 and 2017 included elsewhere in this proxy statement/prospectus. This discussion
contains certain forward-looking statements that reflect plans, estimates and beliefs and involve numerous risks and uncertainties,
including but not limited to those described in the &ldquo;Risk Factors&rdquo; and &ldquo;Cautionary Statement Regarding Forward-Looking
Statements&rdquo; sections of this proxy statement/prospectus. Actual results may differ materially from those contained in any
forward-looking statements. You should carefully read &ldquo;Cautionary Statement Regarding Forward-Looking Statements&rdquo;
in this proxy statement/prospectus.</I></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_182"></A>Newegg&rsquo;s
Business Overview and COVID-19 Update</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg is a tech-focused e-commerce company in North
America, and ranked second after Best Buy as the global top electronics online marketplace according to Web Retailer&rsquo;s report, as measured by 32.4 million
visits per month in 2019. Through Newegg.com, its flagship retail site, and other online platforms, Newegg connects its global
customer base to a wide and increasing assortment of tech products and a massive pool of brands, sellers, suppliers,
manufacturers, distributors and third-party service providers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Headquartered in California, Newegg&rsquo;s reach is global.
Leveraging its extensive fulfillment and warehousing network and the global footprint of its suppliers and sellers, Newegg is
able to offer merchandise sourced from over 35 countries and regions to customers located in over 20 countries and regions, and
deliver customer services in multiple languages.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg has built a massive base of loyal and highly engaged
customers. As of June 30, 2020, Newegg had 3.7 million active customers (defined as unique email addresses with at least one item
purchased on its platforms in the past 12 months), with a 32.5% repeat purchase rate, as measured by the percentage of customers
who made at least two purchases in the preceding year, and an average order value of $296, as calculated by dividing sales by
transactions during the relevant 12-month measurement period. Newegg achieves this through its deep understanding of its customers&rsquo;
needs, preferences and tastes and its ability to offer an extensive product assortment, superior customer services, flexible payment
options, and speedy, reliable and efficient shipping and fulfilment. As of June 30, 2020, Newegg offered 32.6 million SKUs across
over 1,730 categories, which Newegg believes makes it one of the top online shopping destinations for tech consumers. Newegg also
maintains a global fulfilment network that ensures speedy and reliable delivery, supported by its six strategically located
warehouses in the United States and Canada. Newegg has the capacity to deliver goods to essentially 100% of the population in
the United States and to approximately 84% of the population in Canada within just two business days using multiple service level
offerings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg maintains longstanding and extensive relationships
with its suppliers, sellers and business partners to source merchandise at competitive pricing with early or preferential
access to the latest, highly sought-after tech products, fulfilling its promise to provide its customers with all things
tech. Newegg is a trusted partner and the go-to channel for many leading tech product brands and is increasingly establishing
relationships with brands in a growing number of other product categories. As of June 30, 2020, Newegg sourced merchandise
from at least 2,117 brand partners for its direct sales business, and Newegg featured the official online stores of various
brand partners, including some of the most well-known IT/CE brands, such as Intel, AMD, HP, Asus, Acer, Lenovo, MSI, Nvidia,
and Samsung.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg strategically employs a dynamic mix of its established
direct sales business and a scalable marketplace model. Built upon its success in direct sales, Newegg Marketplace has grown in
recent years and significantly complemented its direct sales business. As the number of sellers and brands on its Marketplace continues
to grow, the choices available to customers should also increase, generating a strong momentum for its continued growth. As of
June 30, 2020, the Newegg Marketplace connected its customers to over 13,897 third-party sellers from 35 countries and regions
offering approximately 32.45 million SKUs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For the years ended December 31, 2017, 2018, 2019, and for
the six months ended June 30, 2020, Newegg recorded net sales of $2.2 billion, $2.0 billion, $1.5 billion, and $0.9 billion, respectively.
For the same periods, its total GMV was approximately $2.5 billion, $2.4 billion, $1.9 billion, and $1.1 billion, respectively.
Newegg recorded net loss of $12.0 million, $33.6 million, and $17.0 million for the years ended December 31, 2017, 2018, and 2019,
and net income of $18.9 million for the six months ended June 30, 2020. For the same periods, its adjusted EBITDA was $2 million,
$(17.8) million, $1.4 million, and $25 million, respectively. See &ldquo;&mdash;Non-GAAP Financial Measures.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The spread of COVID-19, which was declared a pandemic by the
World Health Organization in March 2020, has caused different countries and cities to mandate curfews, including &ldquo;shelter-in-place&rdquo;
and closures of most non-essential businesses as well as other measures to mitigate the spread of the virus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s online business and warehouse operations have
remained active to serve its customers during the COVID-19 outbreak, and to-date, it has seen increased demand for its products
and services during the outbreak. By contrast, some of Newegg&rsquo;s brick-and-mortar competitors have been forced to close down
at least some of their retail locations temporarily, while some competitors have de-emphasized certain lines of business, such
as computers and electronics, which represent Newegg&rsquo;s core business. However, the course of the outbreak remains uncertain,
and a prolonged global economic slowdown and increased unemployment could have a material adverse impact on economic conditions,
which in turn could lead to a reduced demand for Newegg&rsquo;s products and services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a consequence of the COVID-19 outbreak, Newegg has experienced occasional supply constraints, primarily in the form of delays
in shipment of inventory. Newegg has also experienced some increases in the cost of certain products, as well as a drop in promotions
by some manufacturers. While Newegg considers such events to be relatively minor and temporary, continued supply chain disruptions
could lead to delayed receipt of, or shortages in, inventory and higher costs, and negatively impact sales in fiscal year 2020.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">COVID-19
impacted the supply chain of Newegg&rsquo;s brand partners and Marketplace sellers, and its ability to timely fulfill orders and
deliver such orders to its customers, particularly as a result of mandatory shutdowns in different countries and cities to mitigate
the spread of the virus.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Although
Newegg cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time, if the pandemic continues, it
may have an adverse effect on Newegg&rsquo;s results of future operations. The potential impact of COVID-19 on its operations
remain uncertain and potentially wide-spread.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_183"></A>Newegg&rsquo;s
Business Model</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">GMV is the primary driver of Newegg&rsquo;s net sales, as it
derives a significant majority of net sales from the GMV transacted on its online platforms, net of cancellations and returns.
Newegg defines GMV as the total dollar value of products sold on Newegg&rsquo;s websites, directly to customers and by its Marketplace
sellers through Newegg Marketplace, net of returns, discounts, taxes, and cancellations. Newegg generates GMV and net sales primarily
from the following sources:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Direct
                                         sales, where Newegg controls inventories sourced from suppliers and directly sells goods
                                         to its customers on Newegg platforms or certain other third-party platforms. Newegg&rsquo;s
                                         direct sales revenues include net sales generated from sales of products directly by
                                         it to customers on its Newegg platforms (including wholesale where Newegg sells inventories
                                         in bulk and mostly at a discount), sales through third-party websites of products Newegg
                                         sources from suppliers, and freight revenues from fees Newegg charges for delivery of
                                         goods that Newegg directly sells to customers.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
                                         Marketplace, where third-party sellers sell products through the Newegg Marketplace,
                                         and Newegg recognizes commission and service fees from such third-party sellers in its
                                         net sales. The published commission rates are based on a percentage of the GMV transacted,
                                         exclusive of the shipping fees charged, which commission rates range from 8% to 15%,
                                         depending on the product category. Newegg refers to the net sales generated from Newegg
                                         Marketplace as Marketplace revenues.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>





<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">D2C
                                         Platform Services, where Newegg generates net sales primarily by charging service fees
                                         for a range of e-commerce services and solutions rendered to the vendor partners, Marketplace
                                         sellers and various types of customers and businesses, including third-party logistics
                                         (3PL) and other fulfilment and logistics services, advertising services, and online marketing
                                         services. Newegg refers to such net sales as services revenues.</FONT></TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_184"></A>Factors
Affecting Newegg&rsquo;s Results of Operations</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
financial condition and results of operations have been, and will continue to be, affected by a number of important factors, including
the following:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Newegg&rsquo;s
ability to grow its customer base and increase their engagement level</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
believes the principal factors necessary to maintain and grow its GMV and net sales include the number of visits to its online
platforms, its ability to convert those visits to orders, and the level of its customers&rsquo; engagement with its platforms.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
monitors the following key operating metrics to evaluate its user traffic, its ability to convert visits into orders, and the
size and engagement of its customer base:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>For the Six
    Months Ended/<BR>
    As of June 30,</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>2020</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>2019</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-top: 0; padding-right: 0; padding-left: 0; text-indent: 0"><FONT STYLE="font-size: 10pt"><B>Key Operating
    Data:</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-top: 0; padding-left: 0; padding-right: 0; text-indent: 0"><FONT STYLE="font-size: 10pt">Total visits<SUP>(1)</SUP></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="white-space: nowrap; text-align: right"><FONT STYLE="font-size: 10pt">163.9 million</FONT></TD>
    <TD STYLE="white-space: nowrap">&nbsp;</TD>
    <TD STYLE="white-space: nowrap">&nbsp;</TD>
    <TD STYLE="white-space: nowrap">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; text-align: right"><FONT STYLE="font-size: 10pt">126.3 million</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-top: 0; padding-left: 0; padding-right: 0; text-indent: 0"><FONT STYLE="font-size: 10pt">Number of customers<SUP>(2)</SUP></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="white-space: nowrap; text-align: right"><FONT STYLE="font-size: 10pt">35.6 million</FONT></TD>
    <TD STYLE="white-space: nowrap">&nbsp;</TD>
    <TD STYLE="white-space: nowrap">&nbsp;</TD>
    <TD STYLE="white-space: nowrap">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; text-align: right"><FONT STYLE="font-size: 10pt">33.6 million</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-top: 0; padding-left: 0; padding-right: 0; text-indent: 0"><FONT STYLE="font-size: 10pt">Number of active
    customers<SUP>(3)</SUP></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="white-space: nowrap; text-align: right"><FONT STYLE="font-size: 10pt">3.8 million</FONT></TD>
    <TD STYLE="white-space: nowrap">&nbsp;</TD>
    <TD STYLE="white-space: nowrap">&nbsp;</TD>
    <TD STYLE="white-space: nowrap">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; text-align: right"><FONT STYLE="font-size: 10pt">3.7 million</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-top: 0; width: 78%; padding-left: 0; padding-right: 0; text-indent: 0"><FONT STYLE="font-size: 10pt">Conversion
    rate<SUP>(4)</SUP></FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 10pt">2.6</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 10pt">2.6</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-top: 0; padding-left: 0; padding-right: 0; text-indent: 0"><FONT STYLE="font-size: 10pt">Repeat purchase
    rate<SUP>(5)</SUP></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">30.7</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">30.4</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding: 0 0 1.5pt; text-indent: 0"><FONT STYLE="font-size: 10pt">Average Order Value<SUP>(6)</SUP></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">296</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">297</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="white-space: nowrap; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>For
    the Year Ended / As of December 31,</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap; padding-bottom: 1.5pt"><FONT STYLE="font-size: 10pt"><B>Key Operating Data:</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>2019</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>2018</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>2017</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 0.25in; text-indent: -0.25in"><FONT STYLE="font-size: 10pt">Total visits<SUP>(1)</SUP></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">262.8&nbsp;million</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">261.6&nbsp;million</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">263.3&nbsp;million</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 0.25in; text-indent: -0.25in"><FONT STYLE="font-size: 10pt">Number of customers<SUP>(2)</SUP></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">34.4 million</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">32.7 million</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">30.8 million</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 0.25in; text-indent: -0.25in"><FONT STYLE="font-size: 10pt">Number of active customers<SUP>(3)</SUP></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">3.2 million</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">3.9 million</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">4.0 million</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="width: 64%; padding-left: 0.25in; text-indent: -0.25in"><FONT STYLE="font-size: 10pt">Conversion rate<SUP>(4)</SUP></FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">2.4</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">3.2</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">3.4</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 0.25in; text-indent: -0.25in"><FONT STYLE="font-size: 10pt">Repeat purchase rate<SUP>(5)</SUP></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">30.0</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">30. 9</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">32.8</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-bottom: 1.5pt; padding-left: 0.25in; text-indent: -0.25in"><FONT STYLE="font-size: 10pt">Average Order
    Value<SUP>(6)</SUP></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">310</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">299</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">286</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Note:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Measured
    by total traffic across all Newegg platforms, excluding search bots from competitors by filtering visits of less than three
    seconds.</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Calculated
    by the total number of registered accounts on all Newegg platforms.</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Active
    customers as of a given date are calculated by unique customer ID with at least one transaction purchased on Newegg platforms
    during the relevant 12-month measurement period.</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Calculated
    by dividing transactions over the total number of visits across all Newegg platforms, excluding visits less than three seconds.</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(5)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Measured
    by the percentage of customers who made at least two purchases on Newegg platforms during the relevant 12-month measurement
    period.</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(6)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Calculated
    by dividing sales volume by number of transactions during the relevant 12-month measurement period.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
uses conversion rates to measure its ability to convert visits to orders. Newegg&rsquo;s conversion rates have varied from
time to time, and there are a number of factors that may affect conversion rates, including overall economic trends, product
mix, new product releases, the level of competition Newegg faces, its merchandise sourcing ability and the purchasing
patterns of consumers. The numbers of customers and active customers and repeat purchase rates are indicators of the size and
engagement of its customer base. Total active customers have been relatively stable over the last two years.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Newegg&rsquo;s
product mix</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">While Newegg is a tech-focused e-retailer, Newegg also offers
merchandise in a broad and increasing number of product categories, including apparel and accessories, home furnishings, personal
goods and certain other products of IT&ndash; adjacent categories. As of June 30, 2020, Newegg offered a total of 32.6 million
SKUs across over 1,730 categories. Products are offered on its online platforms across a range of types, brands and price points.
Newegg believes that customers are attracted to its online platforms primarily by the breadth and depth of its product offerings,
a critical component of its ability to increase sales and drive long-term profitability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s results of operations are affected by its merchandise
mix, as products of different categories, brands and price points have a range of margin and profitability profiles. For example,
categories where the company holds lower market share and the company strives to grow at an accelerated rate over market may offer
relatively lower margins. Newegg&rsquo;s merchandise mix may shift over time due to the combination of a variety of factors, including
consumer demands and preferences, average selling prices, its ability to maintain and expand its supplier relationships, its ability
to forecast market trends, and its marketing and promotional efforts. Newegg continuously monitors the GMV and margin mix of its
product offerings and Newegg seeks to increase the percentage of GMV and net sales from categories and brands with attractive
margin profiles.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Expansion
of Newegg Marketplace&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">A key component of Newegg&rsquo;s long-term strategy is to
continue to grow its Newegg Marketplace, which Newegg believes is an important driver of future profitable growth.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Newegg Marketplace has grown in recent years with
an increasing contribution to Newegg&rsquo;s total sales. In 2017, 2018, 2019, and for the six months ended June 30, 2020, the
Newegg Marketplace generated GMV of $412.8 million, $472.1 million, $495.2 million, and $335.0 million, respectively, representing
a compound annual growth rate of 6% for the years 2017 to 2019, and accounted for approximately 16.7%, 19.6%, 25.6%, and 29.3%,
respectively, of its total GMV. During the same periods, the Newegg Marketplace generated net sales of $37.2 million, $43.2 million,
$46.0 million, and $33.5 million, respectively, representing a compound annual growth rate of 7% for the years 2017 to 2019, and
accounted for 1.8%, 2.2%, 3.0%, and 3.9%, respectively, of its total net sales. Over time, Newegg expects its Marketplace GMV,
both in absolute amount and as a percentage of total GMV, to continue to grow.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg believes the Marketplace model provides it with a number
of benefits. As compared with direct sales, the use of the marketplace model contributes to its working capital and cash flow
as there is no need to maintain inventory. Additionally, as the number of sellers and brands on the Newegg Marketplace continues
to expand, the choices available to customers also should grow, generating strong momentum for its continued growth. Newegg believes that the integration of
its direct sales and Marketplace operations has created a virtuous, self-reinforcing cycle.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
results of operations have been, and will continue to be, influenced by shifts over time in the GMV mix between direct sales and
Marketplace. This is primarily due to the difference in revenue recognition - Newegg recognizes revenues from direct sales on
a gross basis, while Newegg recognizes revenues from the Newegg Marketplace on a net basis. See &ldquo;&mdash;Key Components of
Results of Operations&rdquo; for details. Accordingly, for the same amount of GMV, direct sales generates more net sales than
Marketplace and, therefore, an increase in the GMV contribution of Marketplace as a portion of the total GMV would have a negative
impact on its net sales.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Newegg&rsquo;s ability to forecast consumer needs and
preferences </I></B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
IT/CE e-commerce market in North America and globally is characterized by rapidly evolving technologies, fast-changing consumer
requirements and preferences and frequent releases of new products and introductions of updated industry standards and practices.
Newegg must effectively respond to these changes to remain competitive. Newegg may have difficulty anticipating consumer demand
and preferences, and the goods offered on its online platforms may not be accepted by the market or may be rendered obsolete or
uneconomical. Newegg&rsquo;s inability to adapt to these developments may lead to excessive or deficient inventories or a failure
to attract new customers and retain existing customers, which could materially and adversely affect its financial condition and
results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Newegg&rsquo;s
ability to source products from key suppliers on favorable terms</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of June 30, 2020, Newegg offered over 131,763 direct
sales SKUs sourced from at least 365 suppliers globally. Newegg maintains extensive, long-standing and mutually beneficial
relationships with many of the biggest tech product brands and distributors globally. However, its contracts or arrangements
with such suppliers generally do not guarantee the availability of merchandise, or provide for the continuation of particular
pricing or other practices. Newegg&rsquo;s suppliers may not continue to sell their inventory to it on current terms or at
all, and, if the terms are changed, Newegg may not be able to establish new supply relationships on similar or better
terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
competes with other retailers and direct marketers for favorable product allocations and vendor incentive programs from product
manufacturers and distributors. Some of its competitors could enter into exclusive or favorable distribution arrangements for
certain products with its vendors, which would deny it complete or partial access to those products and marketing and promotional
resources. In addition, some vendors whose products are offered on its online platforms also sell their products directly to customers.
If Newegg is unable to develop and maintain relationships with suppliers that permit it to obtain sufficient quantities of desirable
merchandise on favorable terms, its results of operations could be adversely impacted.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_185"></A>Segment
Information</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
chief operating decision maker (i.e. chief executive officer) reviews financial information presented on a consolidated
basis, accompanied by disaggregated information about revenue by countries or regions&nbsp;for purposes of allocating
resources and evaluating financial performance. There are no segment managers who are held accountable for operations,
operating results and plans for levels or components below the consolidated unit level. Based on qualitative and quantitative
criteria established by Accounting Standards Codification, or ASC, 280, &ldquo;Segment Reporting&rdquo;, Newegg considers it
to be operating within one reportable segment.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_186"></A>Key
Components of Results of Operations</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Net
Sales</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
net sales consist of direct sales revenues, Marketplace revenues and services revenues. See &ldquo;&mdash;Newegg&rsquo;s Business
Model&rdquo; for more information about these sources of net sales.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
net sales are reported net of anticipated discounts, returns, allowances, sales tax and credit card chargebacks, which are all
estimated from historical experience. Newegg also offers customer promotional programs, which Newegg records as reductions in
sales based on anticipated redemption rates estimated from historical experience.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth the components of its net sales in absolute amounts and as percentages of total net sales, for the
periods indicated.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the Six Months Ended
    June 30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center">(in millions, except for percentages)</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt; font-weight: bold">Net sales</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; text-align: left">Direct sales revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">812.2</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">94.1</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">770.9</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">96.7</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Marketplace revenues</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33.5</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.9</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21.0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.6</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Services revenues</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">17.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5.5</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0.7</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-bottom: 4pt">Total</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">862.7</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">100.0</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">797.4</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">100.0</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="22" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the Year Ended December
    31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="22" STYLE="font-weight: bold; text-align: center">(in millions, except for percentages)</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt; font-weight: bold">Net sales</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; text-align: left">Direct sales revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,476.7</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">96.3</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,966.3</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">97.2</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">2,104.6</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">97.5</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Marketplace revenues</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">46.0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">43.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">37.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.7</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Services revenues</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">11.2</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0.7</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">12.9</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0.7</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">16.3</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0.8</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-bottom: 4pt">Total</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">1,533.9</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">100.0</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">2,022.4</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">100.0</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">2,158.1</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">100.0</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Cost
of Sales</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The largest component of its cost of sales is the purchase
price of goods that Newegg directly sells to customers. Cost of sales also includes (i) costs relating to its service revenues,
which include personnel expenses and other costs relating to its third-party logistics services; (ii) inbound and outbound freight
costs; and (iii) inventory write-offs relating to refurbished, slow-moving and obsolete inventories and adjustments for vendor
incentives related to inventory still on hand at the reporting date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cost
of sales is partially offset by payments Newegg earns under vendor incentive programs, or VIPs, such as purchase rebates, marketing
development funds that vendors give it to advertise their products, cooperative marketing programs jointly funded with vendors,
and price protection refunds to offset reductions in the manufacturer&rsquo;s suggested retail price. These VIPs are sometimes
tied to the volume of its purchases or sales and represent a reduction of the selling price of the suppliers&rsquo; products.
Therefore, Newegg treats these program payments as reductions to cost of sales.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth the components of its cost of sales, in absolute amounts and as percentages of total net sales, for
the periods indicated.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the Six Months Ended
    June 30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center">(in millions, except for percentages)</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">Cost of sales</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; text-align: left">Purchase price of goods sold by it directly</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">687.2</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">93.1</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">682.6</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">95.0</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Costs relating to service revenues</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.7</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Inbound and outbound freight costs</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">36.3</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.9</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33.7</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.7</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Inventory write-downs</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2.4</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0.3</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2.3</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0.3</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-bottom: 4pt">Total</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">738.1</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">100.0</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">718.8</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">100.0</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="22" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the Year Ended December
    31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="22" STYLE="font-weight: bold; text-align: center">(in millions, except for percentages)</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">Cost of sales</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; text-align: left">Purchase price of goods sold by it directly</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">1,300.4</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">95.0</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">1,739.5</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">95.8</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">1,853.9</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">96.3</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Costs relating to service revenues</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.7</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.7</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.1</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Inbound and outbound freight costs</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">67.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.9</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">71.7</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.9</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">72.6</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.8</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Inventory write-downs</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0.4</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3.9</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0.2</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3.2</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(0.2</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-bottom: 4pt">Total</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">1,369.0</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">100.0</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">1,816.8</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">100.0</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">1,926.0</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">100.0</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Other
Operating Income / (Expense) </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During 2019, Newegg entered into a sale leaseback transaction
for one of its real estate properties in the United States. Newegg sold the property for a gross proceed of $38.5 million, and
recognized a gain of $28.8 million from the transaction, which is included as other operating income in its consolidated statement
of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Selling,
General and Administrative Expenses </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
largest component of its selling, general and administrative expenses, or SG&amp;A expenses, is salary and other compensation
costs, consisting of expenses relating to the employment of its employees, as well as temporary personnel to meet its needs in
areas such as customer service and fulfillment during seasonal peaks in orders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
significant components of SG&amp;A expenses include advertising and marketing expenses, payment and credit card processing fees,
depreciation, rent expenses, warehouse costs, office expenses, legal expenses and other general corporate costs.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth the components of its SG&amp;A expenses, in absolute amounts and as percentages of net sales, for the
periods indicated.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the Six Months Ended
    June 30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center">(in millions, except for percentages)</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt; font-weight: bold">Selling, general and administrative expenses</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; text-align: left">Salary and other compensation costs</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">47.1</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">43.9</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">53.4</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">46.2</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Payment and credit card processing fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22.0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20.5</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19.1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16.5</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Advertising and marketing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11.7</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10.9</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15.3</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13.2</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Depreciation and amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.5</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.4</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.7</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">Others</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">22.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">20.5</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">22.3</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">19.3</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-bottom: 4pt">Total</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">107.3</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">100.0</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">115.5</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">100.0</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="22" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the Year Ended December
    31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="22" STYLE="font-weight: bold; text-align: center">(in millions, except for percentages)</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt; font-weight: bold">Selling, general and administrative expenses</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">%</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; text-align: left">Salary and other compensation costs</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">107.2</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">46.8</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">103.5</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">41.9</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">96.6</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">39.3</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Payment and credit card processing fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">37.6</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16.4</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">44.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17.9</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">45.4</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18.4</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Advertising and marketing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25.8</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11.3</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34.8</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14.1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">38.0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15.4</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Depreciation and amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10.7</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.7</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10.6</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.3</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">Others</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">47.9</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">20.8</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">54.5</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">22.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">55.5</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">22.6</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-bottom: 4pt">Total</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">229.2</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">100.0</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">247.2</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">100.0</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">246.1</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">100.0</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Interest
Income and Expense</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Interest
income is earned on (i) its loans to affiliates; and (ii) cash invested in money market accounts or certificates of deposit. See
&ldquo;Transactions with Related Persons&rdquo; for more information about its loans to affiliates. Interest expense represents
the interest Newegg is charged on its borrowings, including term loan, line of credit and capital leases.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Other income, net</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg recorded other income, net of $2.8 million, $4.2 million,
$1.6 million, and $1.1 million for the six months ended June 30, 2020 and for the years ended December 31, 2019, 2018, and 2017,
respectively. For the six months ended June 30, 2019, other income, net, primarily consisted of insurance proceeds from the fire
loss in one of the warehouses in the U.S., and vendor incentives, and property rental income in China. In 2019, its other income
mainly consisted of insurance proceeds primarily related to the fire loss in one of Newegg&rsquo;s warehouses in the U.S., and
property rental income in China. Other income, net of $1.6 million in 2018 primarily consisted of property rental income in China
while Newegg recorded other income, net of $1.2 million in 2017 primarily from business interruption insurance recovery in connection
with several instances of distributed denial-of-service attacks that Newegg experienced in November 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Gain&nbsp;from
Sale of and Equity Income from Equity Method Investments</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg accounts for investment under the equity method for
investees over which Newegg has the ability to exercise significant influence but does not have a controlling interest. Newegg
recorded a gain on equity method investment of $0.2 million, $9.6 million and $21.8 million, respectively, in 2017, 2018 and 2019.
Newegg&rsquo;s gain on equity method investment in 2018 was attributed to the equity income from its equity method investment
in Mountain Capital Fund L.P., or Mountain Capital. The gain in 2019 primarily included gains from the partial sale of its investment
in Mountain Capital. Mountain Capital sold a portion of its investment in One97 Communication Limited, or One97, a leading Indian
e-wallet provider and one of Mountain Capital&rsquo;s portfolio companies, to various third-party buyers. Newegg&rsquo;s ownership
percentage in Mountain Capital was approximately 8.0% as of June 30, 2020 and December 31, 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_187"></A>Results
of Operations</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table summarizes Newegg&rsquo;s consolidated results of operations in absolute amounts and as percentages of its net
sales for the periods indicated. Period-to-period comparisons of historical results of operations should not be relied upon as
indicative of future performance.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the Six Months Ended
    June 30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center">(in millions, except for percentages, per share&nbsp;data,
    and average number of shares)</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">% of Net Sales</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">% of Net Sales</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; font-weight: bold; text-align: left">Net sales</TD><TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left">$</TD><TD STYLE="width: 9%; font-weight: bold; text-align: right">862.7</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font-weight: bold; text-align: right">100.0</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left">$</TD><TD STYLE="width: 9%; font-weight: bold; text-align: right">797.40</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font-weight: bold; text-align: right">100.0</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt">Cost of sales</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">738.1</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">85.6</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">718.80</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">90.1</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">124.6</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14.4</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">78.60</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9.9</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other operating income (expense)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-size: 10pt">Selling, general and administrative expenses<SUP>(1)</SUP></FONT></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">107.1</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">12.4</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">115.5</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">14.5</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Gain (Loss) from operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17.7</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(36.9</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-4.6</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Interest income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.6</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.4</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2.0</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-0.3</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Other income, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.8</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.3</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.5</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.4</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Gain from sale of and equity income from equity method investments</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">24.1</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Gain (loss) before provision for income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20.7</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.4</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11.1</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-1.4</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Provision for income taxes</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1.8</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0.2</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4.4</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0.6</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt">Net income (loss)</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">18.9</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">2.2</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">(15.5</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">-1.9</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Basic earnings per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.30</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(18.22</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Diluted earnings per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.16</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(18.22</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Weighted average shares used in computation of earnings per share:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 9pt">Basic</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">849,159</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">849,159</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">Diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,577,308</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">849,159</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 0; text-align: left; padding-right: 0; padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="22" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the Year Ended December
    31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 0; text-align: left; padding-right: 0; padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 0; text-align: left; padding-right: 0; padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="22" STYLE="font-weight: bold; text-align: center">(in millions, except for percentages, net loss per share, and
    average number of share)</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-top: 0; padding-right: 0; padding-left: 10pt; text-indent: -10pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">% of Net Sales</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">% of Net Sales</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">% of Net Sales</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-top: 0; width: 40%; font-weight: bold; text-align: left; padding-right: 0; padding-left: 10pt; text-indent: -10pt">Net
    sales</TD><TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left">$</TD><TD STYLE="width: 7%; font-weight: bold; text-align: right">1,533.9</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; font-weight: bold; text-align: right">100.0</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left">$</TD><TD STYLE="width: 7%; font-weight: bold; text-align: right">2,022.4</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; font-weight: bold; text-align: right">100.0</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left">$</TD><TD STYLE="width: 7%; font-weight: bold; text-align: right">2,158.1</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; font-weight: bold; text-align: right">100.0</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding: 0 0 1.5pt 10pt; text-indent: -10pt">Cost of sales</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,369.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">89.3</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,816.8</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">89.8</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,926.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">89.2</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-top: 0; text-align: left; padding-right: 0; padding-left: 10pt; text-indent: -10pt">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">164.9</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10.7</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">205.6</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">232.1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10.8</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-top: 0; text-align: left; padding-right: 0; padding-left: 10pt; text-indent: -10pt">Other operating Income/(expense)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28.3</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.8</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.6</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.1</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding: 0 0 1.5pt 10pt; text-align: left; text-indent: -10pt"><FONT STYLE="font-size: 10pt">Selling, general and
    administrative expenses<SUP>(1)</SUP></FONT></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">229.2</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">14.9</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">247.2</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">12.2</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">246.1</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">11.4</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-top: 0; text-align: left; padding-right: 0; padding-left: 10pt; text-indent: -10pt">Loss from operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(36.0</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2.4</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(43.1</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2.0</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13.8</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.6</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-top: 0; text-align: left; padding-right: 0; padding-left: 10pt; text-indent: -10pt">Interest income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.6</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.5</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.8</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.1</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-top: 0; text-align: left; padding-right: 0; padding-left: 10pt; text-indent: -10pt">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2.9</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.2</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.6</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.1</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.1</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.1</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-top: 0; text-align: left; padding-right: 0; padding-left: 10pt; text-indent: -10pt">Other income, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">0.3</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.6</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.1</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding: 0 0 1.5pt 10pt; text-align: left; text-indent: -10pt">Gain from sale of and equity income from equity
    method investments</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">21.8</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1.4</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">9.6</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0.5</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0.2</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-top: 0; text-align: left; padding-right: 0; padding-left: 10pt; text-indent: -10pt">Loss before provision
    for income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12.4</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.8</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(32.0</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.6</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11.8</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.6</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding: 0 0 1.5pt 10pt; text-align: left; text-indent: -10pt">Provision for income taxes</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4.6</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0.3</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1.6</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0.1</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0.2</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding: 0 0 4pt 10pt; font-weight: bold; text-align: left; text-indent: -10pt">Net loss</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">(17.0</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">(1.1</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">(33.6</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">(1.7</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">(12.0</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">(0.6</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-top: 0; text-align: left; padding-right: 0; padding-left: 10pt; text-indent: -10pt">Less: Dividend or deemed
    dividend paid to Series A convertible Preferred Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.0</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(20.0</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.0</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(19.2</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.9</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-top: 0; text-align: left; padding-right: 0; padding-left: 10pt; text-indent: -10pt">Net loss attributable
    to common stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(17.0</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.1</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(53.6</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2.6</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(31.2</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.4</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-top: 0; text-align: left; padding-right: 0; padding-left: 10pt; text-indent: -10pt">Net loss per share,
    basic and diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(20.0</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(80.7</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(44.0</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-top: 0; text-align: left; padding-right: 0; padding-left: 10pt; text-indent: -10pt">Weighted average number
    of common stock outstanding used in computing per share amounts, basic and diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">849,159</P></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">663,899</P></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">708,760</P></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Note:
&nbsp;</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(1)</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Includes
                                         share-based compensation expenses of $0.7 million, $3.9 million, and $4.0 million, respectively,
                                         in 2019, 2018 and 2017.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Six Months Ended June 30, 2020 Compared to Six Months
Ended June 30, 2019</I></B></P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I><U>Net sales</U></I></P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net sales increased by 8.2% for the six months ended June 30,
2020 compared to the comparable prior year period from $797.4 million in 2019 to $862.7 million in 2020, which was mainly due
to the increase in GMV from its U.S.-focused direct sales platforms from $888.3 million for the six months ended June 30, 2019,
to $1,043.9 million for the six months ended June 30, 2020.</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Such increase in GMV was primarily due to (i) a change in buying
behavior of consumers from brick-and-mortar stores to online retailers due to the COVID-19 pandemic; and (ii) strong demand in
computer components as a result of working and schooling from home.</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I><U>Cost of Sales &amp; Gross profit </U></I></P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For the six months ended June 30, 2020, its cost of sales increased
by 2.7% compared to the comparable prior year period from $718.8 million in 2019 to $738.1 million in 2020, generally reflective
of the increase in its net sales. During the same period, its gross profit increased by 58.5% from $78.6 million for the six months
ended June 30, 2019 to $124.6 million for the six months ended June 30, 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s profit margin increased from 9.9% for the six
months ended June 30, 2019 to 14.4% for the six months ended June 30, 2020, primarily due to a strategy change where Newegg focused
on selling high margin products such as desktop PCs and gaming notebooks. Newegg also moved over its low margin products, such
as TVs, from its direct sale business to marketplace, where Newegg can receive a higher commission. Newegg also ceased selling
low margin video game console categories and applied a minimum margin policy to components, storage, and memory products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I><U>Selling, general and administrative expenses</U></I></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of June 30, 2020, SG&amp;A expenses decreased from $115.5 million in 2019 to $107.1 million in 2020, which mainly resulted from
(i) a decrease in personnel expenses from $53.4 million in 2019 to $47.1 million in 2020, and (ii) a decrease in advertising and
marketing expenses from $15.3 million in 2019 to $11.7 million in 2020, which was due to more effective control over marketing
and branding efforts. These decreases were partially offset by an increase in credit card charges from $19.1 million in 2019 to
$22.0 million in 2020, which is directly related to the increase in net sales in 2020.</FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I><U>Interest income and expense</U></I></P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For the six months ended June 30, 2020, interest income increased
from $0.2 million in 2019 to $0.6 million in 2020. This increase was primarily driven by an increase of $0.4 million in interest
income on its loan to an affiliate.</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Interest expense decreased from $2.0 million for the six months
ended June 30, 2019 to $0.4 million for the six months ended June 30, 2020, which was generally due to a decrease in the average
outstanding debt balance in 2020, as compared to that of 2019.</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I><U>Other income, net</U></I></P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For the six months ended June 30, 2020, Newegg recorded other
income, net of $2.8 million, compared to other income, net of $3.5 million for the six months ended June 30, 2019. This decrease
was mainly due to the insurance proceeds of $0.9 million received in 2019 from the fire loss in one of Newegg&rsquo;s warehouses
in the U.S.</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I><U>Gain from sale of and equity income from equity method
investments</U></I></P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg did not record an equity income from equity method investments
for the six months ended June 30, 2020. For the six months ended June 30, 2019, Newegg recorded a gain on equity method investment
of $24.1 million. This gain was mainly due to a gain on the sale of equity method investment in Mountain Capital.</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I><U>Provision for income taxes</U></I></P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s provision for income taxes decreased from $4.4
million for the six months ended June 30, 2019, to $1.8 million for the six months ended June 30, 2020. The decrease in its provision
for income taxes was mainly due to the expense of withholding tax in first half of 2019 associated with the sale of its investment
in One97 through Mountain Capital.</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I><U>Net Income</U></I></P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of June 30, 2020, Newegg recorded a net income of $18.9
million in 2020, as compared to a net loss of $15.5 million for the same period in 2019. The increase in net income is
primarily driven by a growth in its net sales, improvement in gross margin, and improvement in selling, general, and
administrative expenses in 2020 compared to 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Year
Ended December 31, 2019 Compared to Year Ended December 31, 2018</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Net
sales</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net sales decreased by 24.2%, from $2,022.4 million in 2018
to $1,533.9 million in 2019, which was mainly due to a decline in the GMV from its U.S.-focused direct sales platforms from $1,745.3
million in 2018 to $1,293.5 million in 2019. Such decline in GMV was also due to the reduced price competitiveness of its product
offerings as Newegg expanded the collection of sales tax in an increasing number of U.S. states in 2019. As of December 31, 2019,
Newegg collected sales tax in 42 states whereas as of December 31, 2018 Newegg collected sales tax in 25 states.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The decline in the GMV from its U.S.-focused platforms was
primarily due to (i) softening demand in computer components; (ii) increased import tariffs that resulted in price increases;
and (iii) shortages in supply, particularly in CPU and VGA graphic cards.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The increase in the GMV contribution by the Newegg Marketplace
to the total GMV was mainly due to (i) an increase in the amount of GMV from the Newegg Marketplace on its U.S.-focused platforms
from $441.4 million in 2018 to $460.5 million in 2019, reflective of its strategic focus in growing its Marketplace operations
and adding new sellers to expand the total product offerings on its platforms; and (ii) a partial shift in orders from the direct
sales model to the Newegg Marketplace model.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Cost
of Sales &amp; Gross profit </U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">From 2018 to 2019, Newegg&rsquo;s cost of sales decreased by
24.6% from $1,816.8 million to $1,369.1 million, generally reflective of the decline in its net sales. During the same period,
its gross profit decreased by 19.8% from $205.6 million to $164.9 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s profit margin increased from 10.2% in 2018 to
10.7% in 2019, primarily due to a strategy change where the company focused on selling high margin products such as desktop PCs
and gaming notebooks. Newegg also moved over its low margin products, such as TVs, from its direct sale business to marketplace,
where the company can receive a higher commission. Newegg also ceased selling low margin video game console categories and applied
a minimum margin policy to components, storage, and memory products.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I><U>Selling, general and administrative expenses</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">SG&amp;A expenses decreased from $247.2 million in 2018 to
$229.2 million in 2019, which mainly resulted from (i) a decrease in advertising and marketing expenses from $34.8 million in
2018 to $25.8 million in 2019, which was due to more effective control over marketing and branding efforts; (ii) a decrease in
credit card fees from $44.2 million in 2018 to $37.6 million in 2019, which are directly related to the decrease in sales; and
(iii) a decrease in stock-based compensation from $3.9 million to $0.7 million due to an adjustment made in 2018 as part of a
repurchase of shares. These decreases were partially offset by an increase in bonus from $1.6 million in 2018 to $5.6 million
in 2019, primarily due to the profit sharing and bonus related to the sale of its equity investment in Mountain Capital in 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
2019, Newegg entered into a sale leaseback transaction for one of its real estate properties in United Sates. Newegg sold the
property for a gross proceed of $38.5 million, and recognized a gain of $28.8 million from the transaction, which is included
as other operating income in its consolidated statement of operations. The Company concurrently leased back the property from
the buyer under a lease agreement for ten years, resulting in ROU lease asset of $14.1 million and a lease liability of $13.9
million as of the lease commencement date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Interest
income and expense</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Interest
income decreased from $1.5 million in 2018 to $0.6 million in 2019. This decrease was primarily driven by a decrease of $0.9 million
in interest income on its loans to affiliates, resulting from significant amounts paid by such affiliate to it under these loans
in 2019.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Interest
expense increased from $1.6 million in 2018 to $2.9 million in 2019, which was generally due to an increase in the average outstanding
debt balance in 2019, as compared to that of 2018. In 2018, Newegg entered into a number of credit agreements and a long-term
revolving loan agreement with certain financial institutions; see &ldquo;&mdash;Liquidity and Capital Resources &mdash;Cash flows
and working capital&rdquo; and &ldquo;Contractual Obligation&rdquo; for more details of these agreements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Other
income, net</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Other income, net was $4.2 million in 2019, compared to other
income, net of $1.6 million in 2018. In 2019, its other income mainly consisted of insurance proceeds of approximately $2.0 million
primarily related to the fire loss in one of Newegg&rsquo;s warehouses in the U.S., property rental income of $1.2 million from
one of its idle warehouses in China, and government subsidies of an insignificant amount, while Newegg recorded other income,
net of $1.6 million in 2018 mainly from property rental income of $1.0 million from one of its idle warehouses in China, and government
subsidies of an insignificant amount partially offset by other expense of $0.5 million.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Gain
from sale of and equity income from equity method investments</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg recorded a gain on equity method investment of $21.8
million in 2019, as compared to $9.6 million in 2018. This increase was mainly due to a gain on the sale of equity method investment
in Mountain Capital of $21.8 million. Mountain Capital sold a portion of its investment in One97 to various third-party buyers,
which resulted in disposal of all of Newegg&rsquo;s investment in One97. The proceeds from the sale of the investment were distributed
to Newegg in 2019. In 2018, Newegg accounted for the Mountain Capital investment under the equity method, and recognized a gain
on this equity method investment of $9.6 million.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Provision
for income taxes</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
provision for income taxes increased significantly from $1.6 million in 2018 to $4.6 million in 2019. The increase in its provision
for income taxes was mainly due to the expense of withholding tax since Newegg was generating losses and may not be able to use
the tax credit. The tax withholding is for the gain from the sale of its investment in One97 through Mountain Capital and equity
income from equity method investments.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Net
Loss</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result of the foregoing, Newegg recorded a net loss of $17.0 million in 2019, as compared to a net loss of $33.6 million in
2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Year
Ended December 31, 2018 Compared to Year Ended December 31, 2017</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Net
sales</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net sales decreased by 6.3% from $2,158.1 million in 2017 to
$2,022.4 million in 2018, which was mainly due to (i) a decline in the GMV from its U.S.-focused direct sales platforms from $1,900.1
million in 2017 to $1,745.3 million in 2018; (ii) partially offset by an increase in the contribution by the Newegg Marketplace
to the total United States GMV from 17.2% in 2017 to 20.2% in 2018 that provided an increase of $5.7 million in Net Sales ; and(iii)
partially offset by an increase in GMV generated from its internationally-focused platforms from $183.1 million in 2017 to $216.4
million in 2018.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
discussed in &ldquo;&mdash;Factors Affecting Newegg&rsquo;s Results of Operations&mdash;Expansion of Newegg Marketplace,&rdquo;
due to the difference in revenue recognition model, an increase in the GMV contribution from Newegg Marketplace versus direct
sales tends to have a negative impact on its net sales. Such decline in GMV was also due to the reduced price competitiveness
of its product offerings as Newegg began to collect sales tax in an increasing number of states in 2018. As of December 31, 2018,
Newegg collected sales tax in 25 states whereas as of December 31, 2017 Newegg collected sales tax in only five states.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The decline in the GMV from its U.S.-focused direct sales platforms
was primarily due to (i) a softening of demand for graphic cards and a shortage in CPUs that resulted in a $51.6 million decline
in GMV for these two categories, which historically accounted for a significant portion of its sales.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The increase in the GMV contribution by the Newegg Marketplace
to the total GMV was mainly due to (i) an increase in the amount of GMV from the Newegg Marketplace on its U.S.-focused platforms
from $393.5 million in 2017 to $441.4 million in 2018 or an increase of $5.7 million in Net Sales, reflective of its strategic
focus in growing its Marketplace operations and adding new sellers to expand the total product offerings in its platforms; and
(ii) a partial shift in orders from the direct sales model to the Newegg Marketplace model.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
increase in GMV generated from its internationally-focused platforms was driven by its increased international marketing and branding
initiatives. In November 2017, Newegg launched its <I>Global 50</I> initiative, a sales and marketing campaign designed to increase
its shipment destinations to up to 50 countries and regions globally and to increase its brand awareness and its ability to offer
dedicated local currency pricing in those markets. The <I>Global 50</I> initiative had its first full year of operations in 2018,
expanding from 46 countries to 50 by the end of 2018, which significantly boosted the growth in the GMV from internationally-focused
platforms. In 2018, Newegg achieved GMV of $38.0 million attributable to its <I>Global 50</I> initiative, as compared to $13.9
million in 2017. The remaining increase in international net sales is driven by growth in Canada, with GMV from Canada growing
from $169.2 million in 2017 to $178.4 million in 2018, as the company continued growing market share in the country.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Cost
of Sales &amp; Gross profit </U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">From
2017 to 2018, Newegg&rsquo;s cost of sales decreased by 5.7% from $1,926.0 million to $1,816.8 million, generally reflective of
the decline in its net sales. During the same period, its gross profit decreased by 11.4% from $232.1 million to $205.6 million.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s profit margin decreased from 10.8% in 2017 to
10.2% in 2018, primarily due to a decrease in the sales of high-margin products in 2018 as compared to 2017. In 2017, driven by
price spikes of crypto currencies, Newegg had a significant increase in the sales of high-margin crypto miners and other crypto
related products, including graphic cards, motherboards and CPUs, in the fourth quarter of 2017, which significantly improved
its profit margin on a full year basis. The decrease in its profit margin between 2017 and 2018 was also due to its increased
sales with promotional pricing to offset the impact of the softening demand for IT/CE products in 2018 and increased competition
for market share from competitors. In addition, freight margin declined, as Newegg moved towards more free shipping and faster
delivery to customers to match its competition. Freight margin contributed 30 basis points to the decrease in margins, with product
mix contributing 60 basis points, partially offset by 30 basis points of improvement from increased proportion of marketplace
sales.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>






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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Selling,
general and administrative expenses</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">SG&amp;A expenses increased slightly from $246.1 million in
2017 to $247.2 million 2018, which mainly came from (i) an increase in salary and other compensation costs from $96.6 million
in 2017 to $103.5 million in 2018, mainly driven by increased headcount to support Newegg&rsquo;s initiatives to grow its B2B
business and marketplace operations; and (ii) an increase in other expenses from $55.5 million in 2017 to $54.5 million in 2018,
primarily due to a $2.2 million lease closure liability recorded as a result of the closure of one of its warehouses. The number
of Newegg&rsquo;s employees increased from 2,308 as of December 31, 2017 to 2,476 as of December 31, 2018. These increases were
partially offset by (i) a decrease in advertising and marketing expenses from $38.0 million in 2017 to $34.8 million in 2018,
which was due to more effective control over marketing and branding efforts; and (ii) a decrease in credit card fees from $45.4
million in 2017 to $44.2 million in 2018 primarily due to realized cost savings from negotiations with payment service providers
and a decrease in GMV.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Although
SG&amp;A expenses remained generally flat between 2017 and 2018, Newegg&rsquo;s SG&amp;A expense as a percentage of net sales
increased from 11.4% in 2017 to 12.2% in 2018, primarily due to the decrease in net sales and the fixed nature of the majority
of its SG&amp;A expenses.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Interest
income and expense</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Interest
income decreased from $1.8 million in 2017 to $1.5 million in 2018. This decrease was primarily driven by (i) a decrease in the
interest income on Newegg&rsquo;s loans to affiliates, resulting from significant amounts paid by such affiliates to it under
these loans in 2018; and, (ii) to a lesser extent, a decrease in the interest income generated from cash and cash equivalents
invested in money market accounts.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Interest
expense increased from $1.1 million in 2017 to $1.6 million in 2018, which was generally due to (i) an increase in the average
outstanding debt balance in 2018, as compared to that of 2017; and (ii) an increase in its weighted average interest rate during
the same period. In 2018, Newegg entered into a number of credit agreements and a long-term revolving loan agreement with certain
financial institutions; see &ldquo;&mdash;Liquidity and Capital Resources&mdash;Cash flows and working capital&rdquo; and &ldquo;Contractual
Obligation&rdquo; for more details of these agreements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Other
income, net</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
income, net was $1.6 million in 2018, compared to $1.2 million in 2017. In 2018, its other income mainly consisted of property
rental income of $1.0 million from one of its idle warehouses in China, and government subsidies of an insignificant amount partially
offset by other expenses, totaling $1.6 million, while Newegg recorded other income, net of $1.3 million in 2017 from business
interruption insurance recovery in connection with several instances of distributed denial-of-service attacks that Newegg experienced
in November 2015.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Gain
from sale of and equity income from equity method investments</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg recorded a gain on equity method investment of U$9.6
million in 2018, as compared to $0.2 million in 2017. This increase was mainly due to an increase in the value of its investment
in Mountain Capital, which in turn was driven by the performance of One97 in 2018.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Provision
for income taxes</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
provision for income taxes increased from $0.2 million in 2017 to $1.6 million in 2018. The increase in its provision for income
taxes was mainly due to the change of the valuation allowance Newegg recorded against the net deferred tax assets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Net
Loss</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result of the foregoing, Newegg recorded a net loss of $33.6 million in 2018, as compared to a net loss of $12.0 million in
2017.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_188"></A>Non-GAAP
Measures</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
has included GMV and Adjusted EBITDA, non-GAAP financial measures, in this proxy statement/prospectus. Newegg believes that these
are key measures used by its management and board of directors to evaluate its operating performance, generate future operating
plans, and make strategic decisions regarding the allocation of capital.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>GMV</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">GMV is the total dollar value of products sold on Newegg&rsquo;s
websites, directly to customers and by its Marketplace sellers through Newegg Marketplace, net of returns, discounts, taxes, and
cancellations, and excluding the following: (i) sales by Newegg&rsquo;s Asia subsidiaries, (ii) service revenues, and (iii) sales
of Rosewill and Nutrend products made through third party platforms. GMV helps Newegg assess and analyze changes in revenues,
and if reviewed in conjunction with net sales&nbsp;and other GAAP financial measures, it can provide more information in evaluating
Newegg&rsquo;s current performance and in assessing its future performance. See &ldquo;Newegg&rsquo;s Business Model.&rdquo;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>For
                                         the Six Months Ended </B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>June
                                         30,</B></FONT></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center">(in millions)</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font-weight: bold; text-align: left">Net Sales</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">862.70</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">797.4</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">Adjustments:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt">GMV - Marketplace</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">335.0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">238.7</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Marketplace Commission</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(33.5</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(21.0</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt">Deferred Revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8.6</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12.2</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Service Revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(17.0</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5.5</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt">Asia Net Sales</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.0</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2.5</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Rosewill and Nutrend sales through third party platforms</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(17.1</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(15.0</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; padding-left: 9pt">Other</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(0.8</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-bottom: 4pt">GMV</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">1,142.6</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">979.1</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the Year Ended December
    31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center">(in millions)</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-weight: bold; text-align: left">Net Sales</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,533.9</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">2,022.4</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">2,158.1</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">Adjustments:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt">GMV - Marketplace</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">495.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">472.1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">412.8</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Marketplace Commission</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(46.0</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(43.2</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(37.2</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt">Deferred Revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6.5</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.5</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.8</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Service Revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11.2</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13.0</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(16.3</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt">Asia Net Sales</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3.9</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(21.7</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(35.9</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Rosewill and Nutrend sales through third party platforms</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(31.1</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(29.8</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(25.5</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; padding-left: 9pt">Other</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2.9</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">11.6</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">16.0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-bottom: 4pt">GMV</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">1,933.4</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">2,403.0</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">2,476.7</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Adjusted
EBITDA</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Adjusted
EBITDA is a financial measure that includes the removal of various one-time, irregular, and non-recurring items from EBITDA. Newegg
believes that exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating performance comparisons on a
period-to-period basis and excludes items that Newegg does not consider to be indicative of its core operating performance. Accordingly,
Newegg believes that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating its operating
results in the same manner as its management and board of directors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Adjusted
EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of its
results as reported under U.S. GAAP. Some of these limitations are:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">although
                                         depreciation and amortization are non-cash charges, the assets being depreciated and
                                         amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect
                                         cash capital expenditure requirements for such replacements or for new capital expenditure
                                         requirements;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Adjusted
                                         EBITDA does not reflect changes in, or cash requirements for, its working capital needs;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Adjusted
                                         EBITDA does not consider the potentially dilutive impact of stock-based compensation;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Adjusted
                                         EBITDA does not reflect tax payments that may represent a reduction in cash available
                                         to it; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
                                         companies, including companies in its industry, may calculate Adjusted EBITDA differently,
                                         which reduces its usefulness as a comparative measure.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Because
of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash
flow metrics, operating profit and Newegg&rsquo;s other U.S. GAAP results.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table reflects the reconciliation of net loss to Adjusted EBITDA for each of the periods indicated.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>For
                                         the Six Months Ended </B></FONT> </P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>June
                                         30,</B></FONT> </P></TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"> 2020 </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"> 2019 </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center"> (in millions) </TD><TD STYLE="font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font-weight: bold; text-align: left"> Net income (loss) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 9%; text-align: right"> 18.9 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 9%; text-align: right"> (15.5 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold"> Adjustments: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt"> Stock-based compensation expenses </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.0 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.4 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt"> Interest (income) expense, Net </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.2 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.8 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt"> Income tax provision </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.8 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 4.4 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt"> Depreciation and amortization </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 4.5 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 5.4 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; padding-left: 9pt"> Gain from sale of and equity income from equity
    method investments </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> (24.1 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt"> Adjusted EBITDA </TD><TD STYLE="font-weight: bold; padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right"> 25.0 </TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right"> (27.6 </TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left"> ) </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> For the Year Ended December
    31, </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 2019 </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 2018 </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 2017 </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> $ </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> $ </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> $ </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center"> (in millions) </TD><TD STYLE="font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-weight: bold; text-align: left"> Net loss </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 9%; text-align: right"> (17.0 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 9%; text-align: right"> (33.6 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 9%; text-align: right"> (12.0 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold"> Adjustments: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt"> Stock-based compensation expenses </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.7 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.9 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.9 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt"> Interest (income) expense, Net </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2.4 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.1 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.7 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt"> Income tax provision </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 4.6 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.6 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.2 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt"> Depreciation and amortization </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 10.7 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 10.2 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 10.6 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt"> Gain from sale of and equity income from equity method investments </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (21.8 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (9.6 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.2 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt; text-indent: 9pt"> Gain from sale of real estate property </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> (28.8 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt"> Adjusted EBITDA </TD><TD STYLE="font-weight: bold; padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right"> (49.2 </TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left"> ) </TD><TD STYLE="font-weight: bold; padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right"> (27.4 </TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left"> ) </TD><TD STYLE="font-weight: bold; padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right"> 1.8 </TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_189"></A>Liquidity
and Capital Resources</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Cash
Flows and Working Capital</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
has historically funded its operations through existing working capital, credit facilities, bank loans, return from investing
activities, and equity financings. See Note 7 and 8 to its consolidated financial statements included elsewhere in this proxy
statement/prospectus for more information about the line of credit and long-term debt that Newegg obtains from financial institutions
and Notes 11 and 12 to its consolidated financial statements included elsewhere in this proxy statement/prospectus for more information
about its equity financings.</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
cash and cash equivalents consist primarily of cash on deposit, certificates of deposit, and money market accounts. Cash equivalents
are all highly liquid investments with original maturities of three months or less. Amounts receivable from credit card processors
are also considered cash equivalents as they are both short term and highly liquid in nature, and are typically converted to cash
within three business days. Amounts due to it from credit card processors that are classified as cash and cash equivalents totaled
$13.2 million and $9.2 million at June 30, 2020 and December 31, 2019, respectively. Newegg anticipates that its existing cash
and funds generated from operations will be sufficient to meet its working capital needs and expected capital expenditures for
at least 12 months from the date of the filing of this proxy statement/prospectus. Newegg&rsquo;s cash and cash equivalents are
primarily denominated in U.S. dollars.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
historically experiences higher sales in the fourth quarter due to the holiday season. In anticipation of such higher sales, Newegg
typically begins building up its inventory levels in the late third quarter. Such inventory build-up may require it to expend
cash faster than Newegg generates by its operations during these periods. Also as a result of this inventory build-up and faster
inventory turnover during the fourth quarter, its accounts payable are typically at their highest levels at year-end, as compared
to the first, second and third quarters when sales are lower. The COVID-19 pandemic has resulted in a higher accounts payable
balance at June 30, 2020 than expected, due to an increased purchase volume to meet its increased sales demand.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
intends to finance its future working capital requirements and capital expenditures from cash generated from operating activities
and funds raised from financing activities, including the net proceeds Newegg will receive from this Offering, and return from
investing activities. Newegg&rsquo;s future capital requirements may, however, vary materially from those now planned or anticipated.
Changes in its operating plans, lower than anticipated net sales, increased expenses or other events, including those described
in &ldquo;Risk Factors,&rdquo; may cause it to seek additional debt or equity financing in the future. If its existing cash is
insufficient to meet its requirements, Newegg may seek to issue debt or equity securities or obtain additional credit facilities.
Financing may not be available on acceptable terms, on a timely basis, or at all, and its failure to raise adequate capital when
needed could negatively impact its growth plans and its financial condition and results of operations. Issuance of additional
equity securities, including convertible debt securities, would dilute its earnings per share. The incurrence of debt would divert
cash for working capital and capital expenditures to service debt obligations and could result in operating and financial covenants
that restrict its operations and its ability to pay dividends to its shareholders. If Newegg is unable to obtain additional equity
or debt financing as required, its business operations and prospects may suffer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Historical
Cash Flows</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table sets forth its selected consolidated cash
flow data for the six months ended June 30, 2020 and 2019, and the years ended December 31, 2017, 2018 and 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For
                                         the Six Months Ended </B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>June
                                         30,</B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">Summary Consolidated Cash Flow Data:</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center">(in millions)</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Net cash provided by (used in) operating activities</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">64.9</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(46.2</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Net cash provided by (used in) investing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2.5</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">54.8</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Net cash provided by (used in) financing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.1</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7.4</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Foreign currency effect on cash, cash equivalents and restricted cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.1</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.9</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Net increase in cash and cash equivalents</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">62.2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15.1</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Cash, cash equivalents and restricted cash at beginning
    of the year</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">80.5</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">56.7</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt">Cash, cash equivalents and restricted cash at end of
    the year</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">142.7</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">71.8</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the Year Ended December
    31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">Summary Consolidated Cash Flow Data:</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center">(in millions)</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left">Net cash (used in) operating activities&#9;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(10.1</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(62.9</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(21.2</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Net cash provided by (used in) investing activities&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">84.7</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(16.0</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(55.1</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Net cash provided by (used in) financing activities&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(49.7</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">144.0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Foreign currency effect on cash, cash equivalents and restricted cash&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.1</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.8</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.1</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Net increase (decrease) in cash and cash equivalents&#9;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23.8</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(77.7</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">66.6</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Cash, cash equivalents and restricted cash at beginning
    of the year</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">56.7</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">134.4</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">67.8</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt">Cash, cash equivalents and restricted cash at end of
    the year</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">80.5</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">56.7</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">134.4</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Operating
Activities</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net cash provided by operating activities was $64.9 million
for the six months ended June 30, 2020. The adjustments for non-cash expenses are primarily comprised of (i) $4.5 million of depreciation
and amortization that was associated with property and equipment; and (ii) $1.0 million of provision for obsolete and excess inventory.
The changes in operating assets and liabilities represented a $39.3 million increase in cash provided by (i) a decrease in accounts
receivable of $15.5 million; (ii) an increase in accounts payable of $56.0 million; (iii) a decrease in accrued liabilities and
other liabilities of $2.9 million; and (iv) an increase in deferred revenue of $11.1 million, partially offset by (i) an increase
in inventory of $33.9 million; and (ii) an increase in prepaid expenses and other assets of $6.4 million.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net
cash used in operating activities was $10.1 million in 2019. Net loss was $17.0 million in 2019. The adjustments for non-cash
expenses are primarily comprised of (i) $10.7 million of depreciation and amortization that was associated with property and equipment;
(ii) $4.3 million of provision for obsolete and excess inventory; and (iii) $21.8 million of gain on equity method investment.
The changes in operating assets and liabilities represented a $42.8 million cash provided by (i) a decrease in accounts receivable
and inventory of $33.1 million and $110.1 million, respectively; and (ii) an increase in accrued liabilities and other liabilities
of $8.0 million, partially offset by (i) a decrease in accounts payable of $100.7 million, and (ii) a decrease in deferred revenue
of $11.2 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash used in operating activities was $62.9 million in 2018. Net cash used in operating activities consists of net loss as adjusted
for non-cash expenses and changes in operating assets and liabilities. Net loss was $33.6 million in 2018. The adjustments for
non-cash expenses are primarily comprised of (i) $10.2 million of depreciation and amortization associated with property and equipment;
(ii) $9.6 million of gain on equity method investment; and (iii) $3.9 million of stock-based compensation. Changes in operating
assets and liabilities represented a $39.2 million use of cash, primarily comprised of (i) a decrease in accounts payable of $18.5
million; (ii) an increase in inventories of $6.3 million; and (iii) a decrease in the accrued liabilities and other liabilities
of $5.9 million, partially offset by a decrease in prepaid expenses and other assets of $2.2 million.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash used in operating activities was $21.2 million in 2017. Net loss was $12.0 million in 2017. The adjustments for non-cash
expenses are primarily comprised of (i) $10.6 million of depreciation and amortization that was associated with property and equipment;
(ii) $4.0 million of stock-based compensation; and (iii) $3.6 million of provision for obsolete and excess inventory. Changes
in operating assets and liabilities represented a $28.5 million use of cash, primarily comprised of (i) a decrease in accounts
payable of $25.9 million; and (ii) an increase in inventories of $16.9 million, partially offset by (i) an increase in deferred
revenue of $10.1 million; and (ii) an increase in accrued liabilities and other liabilities of $4.9 million.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Investing
Activities</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net cash used in investing activities was $2.5 million for
the six months ended June 30, 2020, which was primarily attributable to the payments made to acquire property and equipment of
$2.6 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net cash provided by investing activities was $84.7 million
in 2019, which was mainly due to (i) proceeds on disposal of a warehouse of $38.6 million, and (ii) proceeds on sales of equity
method investment of $77.5 million, partially offset by (i) payments of $10.3 million made to acquire property and equipment;
(ii) equity investments of $7 million; and (iii) loans to an affiliate of $15 million. See &ldquo;Transactions with Related Persons.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash used in investing activities was $16.0 million in 2018, which was mainly attributable to (i) equity investments of $58.0
million in connection with its investment in Mountain Capital and Bitmain; (ii) loans to an affiliate of $20.0 million; and (iii)
payments of $8.0 million made to acquire property and equipment, primarily for ongoing maintenance and upkeep of technology infrastructure,
partially offset by loan repayments from an affiliate of $70.0 million. Newegg entered into several term loan agreements with
one of its affiliates; as of December 31, 2018, there was no outstanding principal balance receivable from affiliate. See &ldquo;Transactions
with Related Persons.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash used in investing activities was $55.1 million in 2017, which was primarily attributable to (i) loans to an affiliate of
$62.6 million; and (ii) payments made to acquire property and equipment of $5.4 million, partially offset by loan repayments from
an affiliate of $12.0 million. In April 2017, Newegg loaned $12.0 million to one of its affiliates under a term loan agreement
with a maturity date of April 18, 2017. In June 2017, Newegg loaned $50.0 million to such affiliate under a term loan agreement
with a maturity date of June 15, 2018. See &ldquo;Transactions with Related Persons.&rdquo;</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Financing
Activities</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net cash used in financing activities was $0.1 million for
the six months ended June 30, 2020, due to the repayment of its long-term debt.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash used in financing activities was $49.7 million in 2019, which was mainly due to (i) net repayment under its line of credit
of $36.4 million; and (ii) repayment of its long-term debt of $13.3 million.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net cash provided by financing activities was $2.0 million
in 2018, which was mainly due to (i) borrowings under its line of credit of $123.3 million; and (ii) borrowings of long-term debt
of $13.0 million, partially offset by (i) repayments under its line of credit of $88.7 million; and (ii) payment for share repurchases
of $45.1 million.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net cash provided by financing activities was $144.0 million
in 2017, which was mainly attributable to (i) net proceeds from issuance of preferred stock of $168.6 million; and (ii) borrowings
under its line of credit of $63.3 million, partially offset by (i) repayments under its line of credit of $67.5 million; and (ii)
repayments of long-term debt of $17.7 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>




<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_190"></A>Capital
Expenditures</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s capital expenditures are incurred primarily
in connection with purchases of property and equipment and leasehold improvements. Newegg&rsquo;s capital expenditures were $5.4
million, $8.0 million, $10.3 million, and $2.6 million in 2017, 2018, 2019, and for the six months ended June 30, 2020, respectively.
Newegg intends to fund its future capital expenditures with its existing cash balance and proceeds from the public offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_191"></A>Credit
Agreements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
July 2018, Newegg entered into a credit agreement with East West Bank and PCN Bank that provided a revolving credit facility of
up to $100.0 million with a maturity date of July 27, 2021. Prior to July 27, 2020 and subject to certain terms and conditions,
the Maximum Revolving Advance Amount, as defined in the loan agreement, could be increased up to $140.0 million. The revolving
credit facility includes a letter of credit sublimit of $25.0 million, which can be used to issue standby and trade letters of
credit, and a $10.0 million sublimit for swingline loans. Advances from this line of credit will be subject to interest at LIBOR
plus the Applicable Margin, as defined in the loan agreement, or the Alternate Base Rate (to be defined as the highest of the
financial institution&rsquo;s prime rate, the Overnight Bank Funding Rate plus 0.50%, or the daily LIBOR plus 1.0%) plus the Applicable
Margin. For LIBOR loans, Newegg may select interest periods of one, two, or three months. Interest on LIBOR loans shall be payable
at the end of the selected interest period. Interest on Alternate Base Rate loans is payable monthly. The line of credit is guaranteed
by certain of Newegg&rsquo;s U.S. subsidiaries and is collateralized by certain of the assets of Newegg. Such assets include all
Receivables, equipment and fixtures, general intangibles, Inventory, Subsidiary Stock, securities, investment property, and financial
assets, contract rights, and ledger sheets, as defined in the loan agreement. To maintain availability of funds under the loan
agreement, Newegg will pay on a quarterly basis, an unused commitment fee of either 0.25% of the difference between the amount
available and the amount outstanding under the facility if the difference is less than one-third of the Maximum Revolving Advance
Amount or 0.40% of the difference between the amount available and the amount outstanding under the facility if the difference
is equal to or greater than one-third of the Maximum Revolving Advance Amount. As of December 31, 2019, there was no balance outstanding
under this line of credit. The credit facility contains customary covenants, including covenants that limit or restrict Newegg&rsquo;s
ability to incur capital expenditures and lease payments, make certain investments, enter into certain related-party transactions,
and pay dividends. The credit facility also requires Newegg to maintain certain minimum financial ratios and maintain an operation
banking relationship with the financial institutions. As of December 31, 2019, Newegg was in compliance with all financial covenants
related to the line of credit.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_192"></A>Contractual
Obligations</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table sets forth its contractual obligations
and commitments as of June 30, 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="18" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Payments Due by Years Ending</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Less than 1 year</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">1-3 years</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">3-5 year</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">More than 5 years</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="18" STYLE="text-align: center">(in thousand)</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; text-align: left">Long-term debt payment</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">2,422</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">270</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">552</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">573</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,027</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Operating Leases</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">41,363</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">9,977</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">14,837</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6,499</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">10,050</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Total contractual obligations&#9;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">43,785</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">10,247</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">15,389</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">7,072</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">11,077</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_193"></A>Off-Balance
Sheet Commitments and Arrangements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
does not have any off-balance sheet financing arrangements or liabilities, guarantee contracts, retained or contingent interests
in transferred assets, or any obligation arising out of a material variable interest in an unconsolidated entity. Newegg does
not have any majority-owned subsidiaries that are not included in its consolidated financial statements.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_194"></A>Quantitative
and Qualitative Disclosure about Market Risk</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
does not use financial instruments for speculative trading purposes, and does not hold any derivative financial instruments that
could expose it to significant market risk. Newegg&rsquo;s primary market risk exposures are changes in interest rates and foreign
currency fluctuations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Interest
Rate Risk</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg&rsquo;s main interest rate exposure relates to long-term
borrowings that Newegg obtains from banks and financial institutions to meet its working capital expenditure requirements. Newegg
also has interest-bearing assets, including cash and cash equivalents, restricted cash and loans to affiliates. Newegg manages
its interest rate exposure with a focus on reducing its overall cost of debt and exposure to changes in interest rates. As of
June 30, 2020 and as of December 31, 2019, Newegg had outstanding long-term borrowings in the aggregate amount of $ 2.4 million
and $2.5 million, respectively, with the majority of its long-term borrowings having floating interest rates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
has not used derivative financial instruments to hedge the interest rate risk. Newegg has not been exposed to material risks due
to changes in market interest rates. However, Newegg cannot provide assurance that Newegg will not be exposed to material risks
due to changes in market interest rate in the future.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Foreign
Currency Risk</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
has currency fluctuation exposure arising from both sales and purchases denominated in foreign currencies. Significant changes
in exchange rates between foreign currencies in which Newegg transacts business and the U.S. dollar may adversely affect its results
of operations and financial condition. Historically, Newegg has not entered into any hedging activities, and, to the extent that
Newegg continues not to do so in the future, Newegg may be vulnerable to the effects of currency exchange-rate fluctuations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg expects its exposure to foreign currency risk will increase
as Newegg increases its operations and sales in Canada and other countries and regions. Although the effect of currency fluctuations
on its financial statements has not been material in the past, there can be no assurance that the effect of currency fluctuations
will not be material in the future. For the years ended December 31, 2017, 2018, 2019, and for the six months ended June 30, 2020,
Newegg recorded foreign exchange gain of $0.2 million, loss of $1.6 million, loss of $0.5 million, and gain of $0.3 million, respectively.
Based on the balance of its foreign-denominated cash and cash equivalents, as of December 31, 2017, 2018, 2019, and June 30, 2020,
an assumed 10% negative currency movement would not have a material impact.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
date, Newegg has not entered into any hedging transactions in an effort to reduce its exposure to foreign currency exchange risk.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Inflation
Risk</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
does not believe that inflation has had a material effect on its business, financial condition or results of operations. Although
Newegg does not expect it to have such an impact in the near future, Newegg cannot assure you that its business will not be affected
by inflation in the future.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_195"></A>Related
Party Transactions</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
a description of its related party transactions, see &ldquo;Related Party Transactions&rdquo; as discussed in the notes to the
consolidated financial statements within this registration statement.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_196"></A>Critical
Accounting Policies, Judgments and Estimates</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of its financial statements requires
it to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales, costs and expenses, as
well as the disclosure of contingent assets and liabilities and other related disclosures. Newegg bases its estimates on historical
experience and on various other assumptions that Newegg believes to be reasonable under the circumstances, the results of which
form the basis for making judgments about carrying values of its assets and liabilities that are not readily apparent from other
sources. In many instances, Newegg could have reasonably used different accounting estimates. Actual results could differ from
those estimates, and Newegg includes any revisions to its estimates in its results for the period in which the actual amounts
become known.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
believes the critical accounting policies described below affect the more significant judgments and estimates used in the preparation
of its consolidated financial statements. Accordingly, these are the policies Newegg believes are the most critical to aid in
fully understanding and evaluating its historical consolidated financial condition and results of operations:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Revenue
Recognition</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
adopted Accounting Standards Update No. 2014-09 Revenue From Contracts with Customers (Topic 606) as of January 1, 2018. Revenue
recognition is evaluated through the following five step process:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 48px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Identification
    of the contract with a customer;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 48px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Identification
    of the performance obligations in the contract;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 48px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Determination
    of the transaction price;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 48px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Allocation
    of the transaction price to the performance obligations in the contract; and</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 48px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recognition
    of revenue when or as a performance obligation is satisfied.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue
is recognized when control of a promised product or service transfers to a customer, in an amount that reflects the consideration
to which Newegg expects to be entitled in exchange for transferring those products or services. Revenue is recognized net of sales
taxes and discounts. Newegg primarily generates revenue through product sales on its platforms and through fees earned for facilitating
marketplace transactions and extended warranty sales on its platforms.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg recognizes revenue on product sales at a point in time
to customers when control of the product passes to the customer upon delivery to the customer or when service is provided. Newegg
fulfills orders with its own inventory or with inventory sourced through its suppliers. The vast majority of the Company&rsquo;s
product sales are fulfilled from its own inventory. The amount recognized in revenue represents the expected consideration to be
received in exchange for such goods or services. For orders fulfilled with inventory sourced through its suppliers, and where the
products are shipped directly by the supplier to its customer, Newegg evaluates the criteria outlined in ASC 606-10-55, Principal
versus Agent Considerations, in determining whether revenue should be recognized on a gross or net basis. Newegg determined that
it is the principal in these transactions as it controls the specific good before it is transferred to the customer. Newegg is
the entity responsible for fulfilling the promise to provide the specified good to the customer and takes responsibility for the
acceptability of the goods, assumes inventory risk before the specified good has been transferred to the customer, has discretion
in establishing the price, and selects the suppliers of products sold. Newegg accounts for product sales under these arrangements
on a gross basis upon receipt of the product by the customer. Product sales exceeded 95% of consolidated net sales in each of the
years ended December 31, 2017, 2018 and 2019. Product sales for the six months ended June 30, 2020 slightly decreased to 94% of
consolidated sales as Newegg expands its D2C platform services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
generally requires payment by credit card upon placement of an order, and to a limited extent, grants credit to business customers
typically on a 30-day term. Shipping and handling is considered a fulfillment activity, as it takes place before the customer
obtains control of the goods. Amounts billed to customers for shipping and handling are included in net sales upon completion
of the performance obligation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg&rsquo;s
product sales contracts include terms that could cause variability in the transaction price such as sales returns and credit card
chargebacks. As such, the transaction price for product sales includes estimates of variable consideration to the extent it is
probable that a significant reversal of revenue recognized will not occur. Sales are reported net of estimated returns and allowances
and credit card chargebacks, based on historical experience.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
also earns fees for facilitating marketplace transactions and extended warranty sales on its platforms. For marketplace transactions,
its websites host third-party sellers and the Company also provides the payment processing function. Newegg recognizes revenue
upon sale of products made available through its marketplace store. Newegg is not the principal in this arrangement and does not
control the specific goods sold to the customer. Newegg reports the net amount earned as commissions, which are determined using
a fixed percentage of the sales price or fixed reimbursement amount. Newegg also offers extended warranty programs for various
products on behalf of an unrelated third party. Newegg reports the net amount earned as revenue at the time of sale, as it is
not the principal in this arrangement and does not control the specific goods sold to the customer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg offers its customers the opportunity to purchase goods
and services on its website using deferred financing promotional programs provided by a third-party financing company. These programs
include an option to make no payments for a period of six, twelve, eighteen or twenty-four months. The third-party financing company
makes all decisions to extend credit to the customer under a separate agreement with the customer, owns all such receivables from
the customer, assumes all risk of collection, and has no recourse to it in the event the customer does not pay. The third-party
financing company pays Newegg for the purchase price on behalf of the customer, less certain transaction fees. Accordingly, sales
generated through these programs are not reflected in Newegg&rsquo;s receivables once payment is received from the third-party
financing company. The transaction fee paid by it to the third-party financing company is recognized as a reduction of revenue.
These transaction fees for the years ended December&nbsp;31, 2017, 2018 and 2019, and for the six months ended June 30, 2020 were
immaterial.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
the extent that Newegg sells its products on third-party platforms, Newegg incurs incremental contract acquisition costs in the
form of sales commissions paid to the platforms. The commissions are generally determined based on the sales price and an agreed-upon
commission rate. Newegg elects the practical expedient under Accounting Standards Update No. 2014-09 Revenue From Contracts with
Customers (Topic 606) to recognize sales commission as an expense as incurred, as the amortization period of the asset that Newegg
otherwise would have recognized is less than one year.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg has three types of contractual liabilities: (1)
amounts collected, or amounts invoiced and due, related to product sales where receipt of the product by the customer has not
yet occurred or revenue cannot be recognized. Such amounts are recorded in the consolidated balance sheets as deferred
revenue and are recognized when the applicable revenue recognition criteria have been satisfied. For all of the product
sales, Newegg ships a large volume of packages through multiple carriers. Actual delivery dates may not always be available
and as such, Newegg estimates delivery dates as needed based on historical data. (2) amounts collected for its now
discontinued Premier membership services, which were typically paid upfront for membership benefits over a 3-month, 6-month,
or 12-month period, including free 3-day shipping, free return, rush processing and dedicated customers services. Such
amounts were initially recorded as deferred revenue and were recognized as revenue ratably over the subscription period.
Newegg discontinued its Premier membership services in 2019, resulting in no balance of deferred revenue related to this
program as of December 31, 2019. The amount of deferred revenue related to the Premier membership services was immaterial as
of December 31, 2018. (3) unredeemed gift cards, which are initially recorded as deferred revenue and are recognized in the
period they are redeemed. Subject to governmental agencies&rsquo; escheat requirements, certain gift cards not expected to be
redeemed, also known as &ldquo;breakage&rdquo;, are recognized as revenue based on the historical redemption pattern. These
gift cards breakage revenue for the six months ended June 30, 2020 and for the years ended December 31, 2019, 2018 and 2017
were immaterial.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Incentives
Earned from Vendors</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
participates in various vendor incentive programs that include, but are not limited to, purchasing-based volume discounts, sales-based
volume incentives, marketing development funds, including for certain cooperative advertising, and price protection agreements.
Vendor incentives are recognized in the consolidated statements of operations as an offset to marketing and promotional expenses
to the extent that they represent reimbursement of advertising costs incurred by it on behalf of the vendors that are specific,
incremental, and identifiable. Reimbursements that are in excess of such costs and all other vendor incentive programs are accounted
for as a reduction of cost of sales, or if the related product inventory is still on hand at the reporting date, inventory is
reduced in the consolidated balance sheets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Equity
Investments</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investments
are accounted for using the equity method if the investment provides Newegg with the ability to exercise significant influence,
but not control, over an investee. Significant influence is generally deemed to exist if Newegg has an ownership interest in the
voting stock of the investee between 20% and 50%, although other factors are considered in determining whether the equity method
is appropriate. Also, investment in limited partnerships of more than 3% to 5% are generally viewed as more than minor and are
accounted for using the equity method.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
investments for which Newegg is not able to exercise significant influence over the investee and which do not have readily determinable
fair values were accounted for under the cost method prior to the adoption of ASU 2016-01 Financial Instruments-Overall (Subtopic
825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. Subsequent to the adoption of this standard
as of January 1, 2018, Newegg has elected the measurement alternative to measure such investments at cost, less any impairment,
plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment
of the same issuer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Stock-based
Compensation Expense and Valuation of Shares of its Common Stock</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
measurement and recognition of compensation expense for all stock-based payment awards made to employees, consultants and directors, including
employee stock options and restricted stock, is based on estimated fair value of the awards on the date of grant. The value of
awards that are ultimately expected to vest is recognized as expense on a straight line basis over the requisite service periods
in the consolidated statements of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Stock-based compensation includes stock option awards issued
under Newegg&rsquo;s 2005 Incentive Award Plan and restricted stock issued under a Significant Shareholder Incentive Plan, which
was adopted in 2016. See &ldquo;Compensation of Executive Officers and Directors&mdash;Equity Incentive Plans&mdash;Newegg Plans&rdquo;
for a summary of the key terms and conditions of the Newegg&rsquo;s 2005 Incentive Award Plan and the Significant Shareholder Incentive
Plan.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Common
Stock Valuations</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
exercise prices of stock options granted were determined contemporaneously by Newegg&rsquo;s Board of Directors, in conjunction
with an independent valuation firm, based on its best estimated fair value of the underlying Class A Common Stock as of the date
of each option grant, including but not limited to, the following factors: (i) the rights, preferences and privileges of its preferred
stock relative to the common stock; (ii) its performance and stage of development; (iii) the prices paid for its preferred stock
in recent issuances of its preferred stock; and (iv) the likelihood of achieving a liquidity event for the shares of common stock
underlying these stock options.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Valuations of the Class A Common Stock were based on a combination
of the income approach and the market approach, which were used to estimate its total enterprise value. The income approach quantifies
the present value of the future cash flows that management expects to achieve from continuing operations. These future cash flows
are discounted to their present values using a rate corresponding to its estimated weighted average cost of capital. Newegg&rsquo;s
weighted average cost of capital is calculated by weighting the required return on interest-bearing debt and common equity capital
in proportion to their estimated percentages in its capital structure. The market approach considers multiples of financial metrics
based on acquisition values or quoted trading prices of comparable public companies. An implied multiple of key financial metrics
based on the trading and transaction values of publicly traded peers is applied to its similar metrics in order to derive an indication
of value. A marketability discount is then applied to reflect the fact that its Class A Common Stock is not traded on a public
exchange. The amount of the discount varies based on its management&rsquo;s expectation of effecting a public offering of Newegg&rsquo;s
Class A Common Stock within the ensuing 12 months. The enterprise value indications from the income approach and market approach
were used to estimate the fair value of its Class A Common Stock in the context of its capital structure as of each valuation
date. Each valuation was based on certain estimates and assumptions. If different estimates and assumptions had been used, these
valuations could have been different.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Preferred
Stock Valuations</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Valuations of Newegg&rsquo;s Series A preferred stock and Series
AA preferred stock were based on a combination of the income approach and market approach, which were used to estimate its total
enterprise value. The income approach quantifies the present value of the future cash flows that management expects to achieve
from continuing operations. These future cash flows are discounted to their present values using a rate corresponding to its estimated
weighted average cost of capital. Newegg&rsquo;s weighted average cost of capital is calculated by weighting the required return
on interest-bearing debt and common equity capital in proportion to their estimated percentages in its capital structure. The market
approach considers multiples of financial metrics based on acquisition values or quoted trading prices of comparable public companies.
An implied multiple of key financial metrics based on the trading and transaction values of publicly traded peers is applied to
its similar metrics in order to derive an indication of value. A marketability discount is then applied to reflect the fact that
Newegg&rsquo;s Series A preferred stock and Series AA preferred stock are not traded on a public exchange. The enterprise value
indications from the income approach and market approach were used to estimate the fair value of its Series A preferred stock and
Series AA preferred stock in the context of its capital structure as of each valuation date. Each valuation was based on certain
estimates and assumptions. If different estimates and assumptions had been used, these valuations could have been different.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_197"></A>Recent
Accounting Pronouncements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
detailed discussion on recent accounting pronouncements, see Note 2 to the consolidated financial statements of Newegg included
elsewhere in this proxy statement/prospectus.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_198"></A>DIRECTORS
AND EXECUTIVE OFFICERS</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_199"></A>Directors
and Executive Officers Following the Merger</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Following
is information about persons who will serve as directors and executive officers of the combined company following the merger.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 25%"><FONT STYLE="font-size: 10pt"><B>NAME</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; width: 2%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 7%; text-align: center"><FONT STYLE="font-size: 10pt"><B>AGE</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; width: 2%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 64%"><FONT STYLE="font-size: 10pt"><B>POSITION</B></FONT></TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">Anthony Chow</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">55</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">Director and Chief Executive Officer</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">Robert Chang</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">52</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">Chief Financial Officer </FONT></TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">Jamie Spannos</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">43</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">Chief Operating Officer </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">Montaque Hou</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">40</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">Chief Technology Officer </FONT></TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">Matt Strathman</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">51</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">General Counsel </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">Zhitao &ldquo;Tom&rdquo; He</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">38</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">Chairman of the Board</FONT></TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">Fred Faching Chang</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">63</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">Director</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">Yingmei Yang</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">50</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">Director </FONT></TD></TR>
<TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">Gregory Moore</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">70</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">Independent Director </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">Paul Wu</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">50</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">Independent Director </FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Mr. Anthony Chow</I></B>. Mr. Chow is the Global Chief
Executive Officer of Newegg. He sets the company&rsquo;s strategic direction and works closely with Newegg&rsquo;s executives to
ensure consistent execution across the organization. In addition to Mr. Chow&rsquo;s role as Global CEO, he also serves on the
company&rsquo;s board of directors. Mr. Chow&rsquo;s leadership has guided Newegg through some of the company&rsquo;s most transformative
years. He first served as Vice President of Newegg&rsquo;s North American business from 2006 until 2008, before moving to Shanghai
to oversee Newegg&rsquo;s China operation, as well as OZZO Logistics, a Newegg subsidiary providing third-party logistics (3PL)
support for other e-commerce companies based in China. In 2011, Mr. Chow left Newegg to become CEO of OTTO Group China, the Chinese
subsidiary of Germany&rsquo;s largest online retailer of fashion and lifestyle products. In this role, he helped the company extend
its reach beyond Europe and into key parts of Asia. Then in 2015, he was appointed Vice President of Haier China, a global home
appliance and consumer electronics manufacturer based in Qingdao, China. Upon rejoining Newegg in 2019, Mr. Chow made sweeping
changes to position the company for continued success in the rapidly expanding e-commerce space. Consequently, Newegg remains one
of the leading tech e-commerce companies with strong market share in consumer sales, and a growing portfolio of services for the
company&rsquo;s vendor partners, marketplace sellers and 3PL clients. Mr. Chow holds a Bachelor&rsquo;s degree in Electrical &amp;
Electronics Engineering from the University of Toledo, and a Master of Business Administration from the UCLA Anderson School of
Management.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Mr.
Robert Chang</I></B>. Mr. Chang is the Chief Financial Officer of Newegg. In this role, he is responsible for overseeing all aspects
of the company&rsquo;s financial performance, including forecasting, evaluation and reporting. Mr. Chang has served the company
in various finance-related roles for more than two decades, first joining the company in 1999 and later being appointed to the
CFO role in 2015. Prior to Newegg, Mr. Chang spent five years as an Operational Analyst at Taiwan YFY Paper Manufacturers. Mr.
Chang holds a Bachelor&rsquo;s degree in Economics from Soochow University, and a Master&rsquo;s degree in Finance from University
of La Verne.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Mr. Jamie Spannos</I></B>. Mr. Spannos is the Global Chief
Operating Officer of Newegg. In this role, he is responsible for the strategic direction and operational development of Newegg&rsquo;s
supply chain operations, managing end-to-end operations for the company&rsquo;s 45M+ SKUs in more than 1,665 product categories
sold into 20 countries across the globe. Mr. Spannos also oversees Newegg Logistics, a separate Newegg business unit that provides
third-party logistics (3PL) services to other e-commerce companies. Prior to joining Newegg in 2018, Mr. Spannos was Senior Vice
President of North America Fulfillment and Logistics at FTD.com, where he oversaw all FTD.com and sub-brand operations across 103
drop-ship and internal distribution centers. Before his time at FTD.com, Mr. Spannos spent five years heading up distribution for
Kraft Heinz Company, managing the company&rsquo;s robust network of 26,500 3PL and Kraft Heinz employees across 128 distribution
locations. In that role, he also played an instrumental part in providing strategic and executional direction in optimizing the
company&rsquo;s warehousing infrastructure, in turn unifying several distribution partnership models related to a multitude of
company mergers and divestitures. And before Kraft Heinz, he served as GM/VP/Managing Director of Home Depot&rsquo;s Import and
Domestic Distribution Field Operations, helping to build the foundation of Home Depot&rsquo;s supply chain during his 12-year tenure
with the company. He holds the distinction of being the youngest at Home Depot to ascend to the GM role at the time. His experience
of more than 20 years across a broad range of business functions uniquely qualifies Mr. Spannos to continue and expand Newegg&rsquo;s
operational excellence, positively impacting Newegg&rsquo;s customers and the many businesses that rely on Newegg&rsquo;s 3PL support.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Mr.
Montaque Hou</I></B>. Mr. Hou serves as the Chief Technical Officer of Newegg since 2016. In this role, he is responsible for all
technical aspects of the Newegg shopping experience, including the website, mobile app and other touchpoints including SMS
and email interaction. Mr. Hou&rsquo;s global technology team of more than 500 engineers designs, develops and deploys the
technology that underpins site design, customer service, Newegg&rsquo;s marketplace, resource planning, logistics and
inventory management of more than 100M unique SKUs. The technical development under Mr. Hou&rsquo;s direction infuses the
latest data science, machine learning and artificial intelligence to enhance the shopping experience with search
personalization and product recommendations, as well as safeguards that deter fraudulent activity and eliminate counterfeit
product listings on Newegg&rsquo;s marketplace. Under Mr. Hou&rsquo;s stewardship, Newegg built and maintains its reputation
of pioneering new e-commerce user experiences through customer-driven innovations, personalizing the shopping experience to
deliver an intuitive, rewarding shopping experience. Newegg recently became the first major e-commerce company to offer a
native Dark Mode, further cementing the company&rsquo;s position as a leading e-commerce innovator. Prior to Mr. Hou&rsquo;s
tenure as CTO, he held various technical positions at Newegg, including Solutions Architect, Director of Technology Strategy
and Chief Architecture Engineer. Mr. Hou holds a Master of Science in&nbsp;analytical chemistry from Tongji University in
Shanghai.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Mr.
Matt Strathman</I></B>. Mr. Strathman is the General Counsel of Newegg. In this role, he is responsible for overseeing all aspects
of the company&rsquo;s legal matters, including compliance and litigation. Mr. Strathman has served the company in various legal
roles for more than ten years, first joining the company in 2008. Prior to Newegg, Mr. Strathman worked as Sr. Counsel for Empire
Companies, and prior to that worked as a business attorney in private practice. Mr. Strathman holds bachelor&rsquo;s degrees in
Economics and History from the University of California, Riverside, and a Juris Doctor from Loyola Law School.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Mr.
Zhitao He</I></B>.<B>&nbsp;</B>Mr. He has served as the director of Newegg since March 2017 and the chairman of Newegg&rsquo;s
board of directors since March 2018. In addition, Mr. He was the former chairman of the Company&rsquo;s board of directors from
October 2016 to August 2020, and the Company&rsquo;s former Chief Executive Officer since April 1, 2020 to August 2020.&nbsp;Mr.
Zhitao He is also the Chairman of the Board of Lianluo Interactive, a China-listed company and a major shareholder of the Company.
Mr. Zhitao He successfully led Lianluo Interactive to list on China&rsquo;s A share market (ticker: 002280). Mr. Zhitao He was
named one of the &ldquo;10 Top Entrepreneurs of Post-1980s&rdquo; by Hurun Report and &ldquo;Top Ten Entrepreneurial Leader of
Listed Companies&rdquo; by Securities Times. In the past two years, under his leadership, Lianluo Interactive has moved into the
field of smart hardware, including the purchase of Newegg (http://www.newegg.com), investments in American virtual reality device
manufacturer Avegant (www.avegant.com) and hardware corporation Razer (http://www.razerzone.com), and promotion of the world&rsquo;s
biggest VR Operating System OSVR in China together with Razer. This investment plan has allowed Lianluo Interactive to become
a closed loop of &ldquo;Software and Hardware + Platform + Channels&rdquo;. Mr. He currently serves on the board of directors
of Lianluo Interactive, Newegg Inc., Avegant Light Field Technology, Beijing Digital Grid Technology Co., Ltd., Shenzhen Ailianluo
Investment Co., Ltd., Hangzhou Lianluo Holding CO., Ltd., Beijing Lianluo Youjia Technology Co., Ltd. and Shenyang Zhitongrong
Networking Technology Co., Ltd. Mr. He received his master&rsquo;s degree from Beijing University of Posts and Telecommunications.
Mr. He founded Lianluo Interactive in 2007 which was known as Beijing Digital Grid Technology Co.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Mr. Fred Faching Chang (or Mr. Fred Chang)</I></B>. Mr.
Chang currently serves as the Vice Chairman of Newegg&rsquo;s board of directors and the chairman of strategy committee. He was
previously a director of Newegg from 2005 to August 2018, and was a member of Newegg&rsquo;s board&rsquo;s compensation committee
from 2017 to August 2018. During the periods of 2005 to 2008, January 2013 to January 2015, and October 2019 to March 2020, Mr.
Chang had also been Newegg&rsquo;s Chief Executive Officer.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Ms. Yingmei Yang</I></B>.<B>&nbsp;</B> Ms. Yang has served
as our interim Chief Financial Officer since March 15, 2018 and on our board of directors since April 1, 2020. Upon completion
of the merger, Mr. Yang will resign from her position as interim Chief Financial Officer. Ms. Yang has also served as the director
of Newegg since July 2018. In addition, she has acted as the Vice President of Hangzhou Lianluo since February, 2018. From January,
2015 to February, 2018, Ms. Yang has served as Chief Financial Officer and Vice President of Hangzhou Lianluo. From February, 2013
to January, 2015, Ms. Yang was the Chief Financial Officer and Secretary of Board of Beijing Digit Horizon Technology Limited,
the predecessor of Hangzhou Lianluo.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Mr. Gregory Moore</I></B>. Mr. Greg Moore has been a
member of Newegg&rsquo;s board of directors since 2011. He currently serves as the chair of Newegg&rsquo;s audit and nominating
&amp; governance committees and as a member of its compensation committee. He previously served as chair of the compensation committee.
Mr. Moore previously served as the Senior Vice President and Controller of Yum! Brands, Inc. until he retired in 2005. Yum! Brands
is the world-wide parent company of Taco Bell, KFC and Pizza Hut. Prior to becoming Yum! Brands&rsquo; Controller, Mr. Moore was
the Vice President and General Auditor of Yum! Brands. Before that, he was with PepsiCo, Inc. and held the position of Vice President,
Controller of Taco Bell and Controller of PepsiCo Wines &amp; Spirits International, a division of PepsiCola International. Before
joining PepsiCo he was an Audit Manager at Arthur Young &amp; Company in its New York, New York and Stamford, Connecticut offices.
Mr. Moore also serves on the board of EF&amp;TRH Restaurants (HK) Holding Limited, a Texas Roadhouse, Inc. joint-venture in China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Mr. Paul Wu</I></B>. Mr. Paul Wu joined Newegg&rsquo;s
board of directors in February 2020. He currently serves as the chair of Newegg&rsquo;s compensation committee and as a member
of its audit and nominating &amp; governance committees. Mr. Wu is the founder and CEO of Carota, a supplier of connected car services.
Mr. Wu is also the co-founder of the MOX mobile accelerator. He previously served as the CEO of Pocketnet Tech, a mobile content
provider, and has also served in various roles with MediaTek, Hon Hai Foxconn Technology Group and Hong Kong Hutchison Wampoa&rsquo;s
TOM Group. Mr. Wu obtained his degree from the Department of Agricultural Economics at Taiwan University, and obtained an MBA from
RSM Rotterdam Business School in the Netherlands.</P>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_200"></A>Board
of Directors</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
board of directors will consist of 7 directors upon the closing of the merger.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
director may vote in respect of any contract or transaction in which he is interested, provided, however that the nature of the
interest of any director in any such contract or transaction shall be disclosed by him at or prior to its consideration and any
vote on that matter. A general notice or disclosure to the directors or otherwise contained in the minutes of a meeting or a written
resolution of the directors or any committee thereof of the nature of a director&rsquo;s interest shall be sufficient disclosure
and after such general notice it shall not be necessary to give special notice relating to any particular transaction. A director
may be counted for a quorum upon a motion in respect of any contract or arrangement which he shall make with our company, or in
which he is so interested and may vote on such motion. There are no membership qualifications for directors. Further, there are
no share ownership qualifications for directors unless so fixed by us in a general meeting.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The listing rules of NASDAQ generally require that a majority
of an issuer&rsquo;s board of directors must consist of independent directors. However, the listing rules permit foreign private
issuers like us to follow &ldquo;home country practice&rdquo; in certain corporate governance matters. We rely on this &ldquo;home
country practice&rdquo; exception and do not have a majority of independent directors serving on our board of directors. Mr. Gregory
Moor, Mr. Paul Wu, and [&nbsp;&nbsp;&nbsp;&nbsp;] are our independent directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We do not have a lead independent director because we believe
our independent directors are encouraged to freely voice their opinions on a relatively small company board. We believe this leadership
structure is appropriate because we are a smaller reporting company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The amended and restated memorandum and articles of incorporation
to be adopted at the special meeting provides that, subject to compliance with applicable laws and NASDAQ rules, Digital Grid
and the &ldquo;Minority Representative&rdquo;, which is initially Mr. Fred Faching Chang, shall be entitled to designate nominees
to our board of directors in a number that is proportionate to the voting power of Digital Grid and its affiliate, and certain
legacy stockholders of Newegg in the Company, respectively. </P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Digital Grid has nominated Mr. Zhitao He, Ms. Yingmei Yang
and Mr. Paul Wu, and Mr. Fred Faching Chang has nominated Mr. Fred Faching Chang, Mr. Greg Moore and Mr. Anthony Chow to serve
as the directors of the post-closing issuer. Digital Grid is currently looking for an additional candidate to be nominated as
an independent director. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
are no other arrangements or understandings pursuant to which our directors are selected or nominated.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_201"></A>Duties
of Directors</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
BVI law, our directors have duties to act honestly, in good faith and with a view to our best interests. Our directors also have
a duty to exercise the care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances.
In fulfilling their duty of care to us, our directors must ensure compliance with our amended and restated memorandum and articles
of association. We have the right to seek damages if a duty owed by our directors is breached. The functions and powers of our
board of directors include, among others:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">appointing
                                         officers and determining the term of office of the officers;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">authorizing
                                         the payment of donations to religious, charitable, public or other bodies, clubs, funds
                                         or associations as deemed advisable;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">exercising
                                         the borrowing powers of the Company and mortgaging the property of the Company;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">executing
                                         checks, promissory notes and other negotiable instruments on behalf of the Company; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">maintaining
                                         or registering a register of mortgages, charges or other encumbrances of the Company.</FONT></TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_202"></A>Limitation
of Director and Officer Liability</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">BVI
does not limit the extent to which a company&rsquo;s memorandum and articles of association may provide for indemnification of
officers and directors, except to the extent any such provision may be held by the BVI courts to be contrary to public policy,
such as to provide indemnification against civil fraud or the consequences of committing a crime.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
our amended and restated memorandum and articles of association, we may indemnify our directors, officers and liquidators against
all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in
connection with civil, criminal, administrative or investigative proceedings to which they are party or are threatened to be made
a party by reason of their acting as our director, officer or liquidator. To be entitled to indemnification, these persons must
have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings,
they must have had no reasonable cause to believe their conduct was unlawful.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Insofar
as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing
provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in
the Securities Act and is therefore unenforceable as a matter of United States law.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_203"></A>Involvement
in Certain Legal Proceedings</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 6, 2020, Hangzhou Lianluo and Mr. Zhitao He received an investigation notice from the CSRC for alleged violation of laws
and regulations regarding information disclosures of Hangzhou Lianluo. Hangzhou Lianluo is a PRC company with shares listed on
Shenzhen Stock Exchange. Mr. He is the Chairman and Chief Executive Officer of Hangzhou Lianluo. Hangzhou Lianluo is also the
largest shareholder of the Company and Mr. He was the former Chairman and the former Chief Executive Officer of the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hangzhou
Lianluo has announced this investigation on August 7, 2020 and stated that it will fully cooperate with CSRC in the investigation.
On September 28, 2020, Hangzhou Lianluo announced that it has received a letter of advance notice of administrative punishment
from Zhejiang Regulatory Bureau of CSRC, which provides, among others, that (i) Hangzhou Lianluo is receiving a warning and required
to correct its unlawful acts and pay a fine of RMB 300,000 and (ii) Mr. Zhitao He is receiving a warning and required to pay a
fine of RMB 400,000.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
the best of our knowledge, except as disclosed herein, none of our directors or executive officers has been convicted in a criminal
proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding
during the past ten years that resulted in a judgment, decree or final order enjoining the person from future violations of, or
prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities
or commodities laws, any laws respecting financial institutions or insurance companies, any law or regulation prohibiting mail
or wire fraud in connection with any business entity or been subject to any disciplinary sanctions or orders imposed by a stock,
commodities or derivatives exchange or other self-regulatory organization, except for matters that were dismissed without sanction
or settlement.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_204"></A>Family
Relationship</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
are no family relationships among any of the persons named above, and there are no arrangements or understandings with major shareholders,
customers, suppliers or others, pursuant to which any such person was selected as a director or member of senior management.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_205"></A>Terms
of Directors and Executive Officers</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
of our directors holds office until a successor has been duly elected and qualified unless the director was appointed by the board
of directors, in which case such director holds office until the next following annual meeting of shareholders at which time such
director is eligible for re-election. All of our executive officers are appointed by and serve at the discretion of our board
of directors.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_206"></A>Qualification</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
is currently no shareholding qualification for directors, although a shareholding qualification for directors may be fixed by
our shareholders by ordinary resolution.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_207"></A>Committees
of the Board of Directors</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Currently,
three committees have been established under the board: the audit committee, the compensation committee and the nominating committee
and corporate governance committee. Each committee&rsquo;s members and functions are described below.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Audit
Committee</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
the closing of the merger, Mr. Gregory Moore, Mr. Paul Wu and [&nbsp;&nbsp; ]&nbsp;will become the members of our audit committee.
Mr. Moore will be the chairman of our audit committee. We have determined that Mr. Moore, Mr. Wu and [&nbsp;&nbsp; ] satisfy the
&ldquo;independence&rdquo; requirements of Section 5605(a)(2) of the NASDAQ Listing Rules and Rule 10A-3 under the Exchange Act.
Our board also has determined that Mr. Moore qualifies as an audit committee financial expert within the meaning of the SEC rules
or possesses financial sophistication within the meaning of the NASDAQ Listing Rules. The audit committee oversees our accounting
and financial reporting processes and the audits of the financial statements of our company. The audit committee is responsible
for, among other things:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">appointing
                                         the independent auditors and pre-approving all auditing and non-auditing services permitted
                                         to be performed by the independent auditors;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
                                         with the independent auditors any audit problems or difficulties and management&rsquo;s
                                         response;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">discussing
                                         the annual audited financial statements with management and the independent auditors;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
                                         the adequacy and effectiveness of our accounting and internal control policies and procedures
                                         and any steps taken to monitor and control major financial risk exposures;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
                                         and approving all proposed related party transactions;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">meeting
                                         separately and periodically with management and the independent auditors; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">monitoring
                                         compliance with our code of business conduct and ethics, including reviewing the adequacy
                                         and effectiveness of our procedures to ensure proper compliance.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Compensation
Committee</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
the closing of the merger, Mr. Gregory Moore, Mr. Paul Wu and [&nbsp;&nbsp; ] will become the members of our compensation committee.
Mr. Wu will be the chairman of our compensation committee. The compensation committee assists the board in reviewing and approving
the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our chief executive
officer may not be present at any committee meeting during which his compensation is deliberated. The compensation committee is
responsible for, among other things:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
                                         and approving to the board with respect to the total compensation package for our most
                                         senior executive officers;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">approving
                                         and overseeing the total compensation package for our executives other than the most
                                         senior executive officers;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
                                         and recommending to the board with respect to the compensation of our directors;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
                                         periodically and approving any long-term incentive compensation or equity plans;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">selecting
                                         compensation consultants, legal counsel or other advisors after taking into consideration
                                         all factors relevant to that person&rsquo;s independence from management; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
                                         programs or similar arrangements, annual bonuses, employee pension and welfare benefit
                                         plans.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Nominating
and Corporate Governance Committee.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
the closing of the merger, Mr. Gregory Moore, Mr. Paul Wu and [&nbsp;&nbsp; ] will become the members of our nominating and corporate
governance committee. [&nbsp;&nbsp; ] will be the chairperson of our nominating and corporate governance committee. The nominating
and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and
in determining the composition of the board and its committees. The nominating and corporate governance committee is responsible
for, among other things:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">identifying
                                         and recommending nominees for election or re-election to our board of directors or for
                                         appointment to fill any vacancy;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing
                                         annually with our board of directors its current composition in light of the characteristics
                                         of independence, age, skills, experience and availability of service to us;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">identifying
                                         and recommending to our board the directors to serve as members of committees;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">advising
                                         the board periodically with respect to significant developments in the law and practice
                                         of corporate governance as well as our compliance with applicable laws and regulations,
                                         and making recommendations to our board of directors on all matters of corporate governance
                                         and on any corrective action to be taken; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">monitoring
                                         compliance with our code of business conduct and ethics, including reviewing the adequacy
                                         and effectiveness of our procedures to ensure proper compliance.</FONT></TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_208"></A>Code
of Ethics</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
code of conduct and business ethics conforms to the rules and regulations of NASDAQ. The code of conduct and business ethics applies
to all of our directors, officers and employees, including our principal executive officer, principal financial officer and principal
accounting officer, and addresses, among other things, honesty and ethical conduct, conflicts of interest, compliance with laws,
regulations and policies, including disclosure requirements under the federal securities laws, confidentiality, trading on inside
information, and reporting of violations of the code. A copy of conduct and business ethics has been filed as an exhibit to our
Registration Statement on Form S-1, File no. 333-163041, filed on November 12, 2009, as amended. The Company will provide any
person a copy of its code of ethics, without charge, upon request. Such request should be addressed to the Company at Room 611,
6th Floor, BeiKong Technology Building, No. 10 Baifuquan Road, Changping District, Beijing 102200, People&rsquo;s Republic of
China.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_209"></A>COMPENSATION
OF EXECUTIVE OFFICERS AND DIRECTORS</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_210"></A>Director
and Executive Officer Compensation</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2019, Newegg paid an aggregate of $2,757,363 in cash compensation to the directors and senior management who will become our directors
and senior management upon closing of the merger. It did not separately set aside any amounts for pensions, retirement or other
benefits for its executive officers, other than pursuant to relevant statutory requirements.&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_211"></A>Employment
Agreements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
closing of the merger, we will enter into employment agreements with our new named executive officers. Pursuant to employment
agreements, the form of which is filed an as exhibit to the registration statement of which this proxy statement/prospectus forms
a part, the employment with each of our named executive officers is for no fixed term and is &ldquo;at will&rdquo;, which can
be terminated by us or each named executive officer at any time and for any reason, with or without notice, with or without cause.
Each named executive officer shall only use or disclose any confidential information for the benefit of us, and as is necessary
to carry out his or her responsibilities for us. Following the end of the employment, each named executive officer shall return
all confidential information and neither directly or indirectly, use or disclose any such confidential information, except as
expressly and specifically authorized in writing by us, and will hold, in strict confidence and not to use or disclose to any
person, corporation or other entity without written consent, any confidential information.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_212"></A>Equity
Incentive Plans</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>2009
Share Incentive Plan</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2009, in connection with our initial public offering, we established our 2009 Share Incentive Plan. This plan contains options
to purchase up to 56,250 of our common shares. We issued all 56,250 options pursuant to this plan on December 29, 2011 at an exercise
price of $11.6 per share, which vest over five years until December 28, 2016 and will expire on December 29, 2021. As of October
7, 2013, 125 options issued under this plan had been exercised for common shares, and the board decided to grant 11,750 options
recovered from former employees who received options under this plan and thereafter left the Company. These 11,750 options were
awarded on October 7, 2013, at an exercise price of $18.4 per share, which vest over five years until October 6, 2018 and will
expire on October 7, 2023. As of the date of this proxy statement/prospectus, there are an aggregate of 23,250 options issued
and outstanding under this plan.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>2013
Share Incentive Plan</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2013, we established our 2013 Share Incentive Plan. This pool allows us to issue options, common shares and other securities exercisable
or convertible into, in the aggregate, 57,750 of our common shares. We issued 16,375 options pursuant to this plan on August 20,
2014 at an exercise price of $42.48 per share which vest over five years until August 19, 2019. As of the date of this proxy statement/prospectus,
there are 16,375 options issued and outstanding under this plan which will expire on August 20, 2024.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>2014
Share Incentive Plan</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 28, 2014, we established our 2014 Share Incentive Plan, which provides that the maximum number of shares authorized for issuance
under this plan shall not exceed ten percent of the number of our issued and outstanding shares as of December 31 of the immediately
preceding fiscal year, and an additional number of shares may be added automatically annually to the shares issuable under the
plan on and after January 1 of each year, from January 1, 2015 through January 1, 2024. This plan shall terminate on the tenth
anniversary of its effective date of July 28, 2014.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
fiscal 2014 this plan allowed us to issue options, common shares and other securities exercisable or convertible into, in the
aggregate, 58,350 of our common shares. We issued 43,625 options under this plan on August 7, 2015, at an exercise price of $13.12
per share, which vest over two years until August 6, 2017. As of the date of this proxy statement/prospectus, there are 2,375
options issued and outstanding under this plan which will expire on August 7, 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
fiscal 2015, this plan allowed us to issue options, common shares and other securities exercisable or convertible into, in the
aggregate, 72,608 of our common shares. We issued 72,608 options pursuant to this plan on March 21, 2016 at an exercise price
of $15.04 per share which vest over two years until March 20, 2018. As of the date of this proxy statement/prospectus, there are
31,358 options issued and outstanding under this plan which will expire on March 21, 2026.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 8, 2017, we held an annual general meeting to approve our amended and restated memorandum and articles of association in
order that our authorized shares be re-classified and re-designated into 50,000,000 common shares of par value of $0.002731 each,
of which 37,888,889 were designated as Class A common shares of par value of $0.002731 each, and 12,111,111 were designated as
Class B common shares of par value of $0.002731 each. After this recapitalization event, shares issuable under this plan, either
directly or upon exercise of options issued under this plan, were limited to Class A common shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 12, 2018, the Company registered on Form S-8 143,798 Class A common shares issuable pursuant to this plan for fiscal year
2018, either directly or upon exercise of options issued under the plan. We did not issue options under this plan for 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Newegg
Plans</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
closing of the merger, the Company will assume the Newegg 2005 Incentive Award Plan and Significant Shareholder
Incentive Plan. The outstanding options under these plans granted by Newegg will be exchanged for options to
acquire certain number of common shares upon completion of the merger, based on the exchange ratio. Below is a description of
these plans.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Newegg
Incentive Award Plan</U>:</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On September&nbsp;22, 2005, Newegg 2005 Incentive Award
Plan was approved and was later amended in January&nbsp;2008, October 2009, December 2011 and September 2015. Under this plan,
Newegg may grant equity incentive awards to employees, directors, and consultants based on Newegg&rsquo;s Class&nbsp;A common stock.
A committee of Newegg&rsquo;s board of directors determines the eligibility, types of equity awards, vesting schedules, and exercise
prices for equity awards granted. Subject to certain adjustments in the event of a change in capitalization or similar transaction,
Newegg may issue a maximum of 14,200,000&nbsp;shares of its Class&nbsp;A common stock under this plan. Newegg issues new shares
of Class&nbsp;A common stock from its authorized share pool to settle stock-based compensation awards. The exercise price of options
granted under the plan shall not be less than the fair value of Newegg&rsquo;s Class&nbsp;A common stock as of the date of grant.
Options typically vest over the term of four years, and are typically exercisable for a period of 10&nbsp;years after the date
of grant, except when granted to a holder who, at the time the option is granted, owns stock representing more than 10% of the
voting power of all classes of stock of Newegg or any subsidiaries, in which case, the term of the option shall be no more than
five&nbsp;years from the date of grant. In September&nbsp;2015, this plan was amended to permit additional awards to be made after
the tenth anniversary of the original adoption of said plan.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Newegg
Significant Shareholder Incentive Plan</U>:&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In 2016, Fred Chang established the Newegg Significant Shareholder
Incentive Plan, pursuant to which he caused to be transferred a total of 5,198,458&nbsp;shares of Newegg&rsquo;s Series&nbsp;A
Preferred Stock from Tekhill USA LLC, a limited liability company fully owned by Fred Chang, into the Fred Chang Partners Trust,
or the Trust. In March&nbsp;and May&nbsp;2016, the Trust entered into restricted share award agreements with several key executives
of Newegg, under which the Trust granted a total of 5,090,157 restricted shares of Newegg&rsquo;s Series&nbsp;A Preferred Stock
to those executives to be vested over a 15-year period in equal annual installments on each anniversary date of the grant date.
As of December&nbsp;31, 2016, the restricted share award agreements were terminated with a concurrent offer from the significant
shareholder to re-establish the Significant Shareholder Incentive Program. During the year ended December 31, 2017, the re-established
incentive program granted a total of 3,898,843 restricted shares of Newegg&rsquo;s Series A preferred stock to a subset of the
same recipients with substantially the same terms as those under the Significant Shareholder Incentive Program. The re-established
Significant Shareholder Incentive Program subsequently modified the vesting period from 15 years to 10 years during the year ended
December 31, 2017, which did not have a significant impact on Newegg&rsquo;s consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of the date of this proxy statement/prospectus, the restricted
stock awards granted under the Newegg Significant Shareholder Incentive Plan were all vested. The unvested amount of such restricted
stock awards had been forfeited according to certain amendment to the restricted stock award agreement by and between the Trust
and recipient on March 31, 2020.</P>


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<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_213"></A>TRANSACTIONS
WITH RELATED PERSONS</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following includes a brief summary of certain material
arrangements, agreements and transactions since January 1, 2017, or any currently proposed transaction, in which LLIT or Newegg
was or is to be a participant and in which any person who will serve as an executive officer or director of the Company following
the merger had or will have a direct or indirect material interest (other than compensation described under &ldquo;Compensation
of Executive Officers and Directors&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Transitions between Company and Hangzhou Lianluo</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During the years ended December 31, 2019, 2018 and 2017, the
Company purchased from Hangzhou Lianluo, a company controlled by Mr. Zhitao He, for inventory, as well as from Hangzhou Lianluo&rsquo;s
subsidiary for service, in aggregate of $42,000, $204 and $3,760, respectively. As of December 31, 2019, the Company reported
$42,000 in service charge payable to Hangzhou Lianluo and its subsidiary. On August 17, 2020, the $42,000 service charge was repaid
by the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On July 1, 2018, the Company leased office premises from Hangzhou
Lianluo for a period of 1 year, with an annual rental of $84,447 (RMB580,788). Rental payments charged as expenses in the six
months ended June 30, 2020 and 2019 were $0 and $39,091 respectively. As of June 30, 2020 and December 31, 2019, the Company reported
an outstanding rental payable of $74,776 and $75,834, respectively, to Hangzhou Lianluo.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During the fiscal year 2019, the Company borrowed $942,500
from Hangzhou Lianluo and repaid $0. As of June 30, 2020, the loan balances were $918,450. The loans due at July 18, July 21,
and August 6, 2020, totaling $211,950, were extended, interest-free and without specific repayment date, which is based upon both
parties&rsquo; agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Transitions between Company and Digital Grid</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During 2019, Digital Grid, a company controlled by Mr. Zhitao
He, borrowed $85,000 from the Company for a term of 12 months and the Company borrowed $118,000 from Digital Grid for a term of
12 months. As of June 30, 2020, the loan balance between Digital Grid and the Company was a net principal of $33,000 owed to Digital
Grid. On July 14, 2020, the Company repaid the net principal of $33,000 to Digital Grid.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 15, 2018, the Company entered into a $6 million loan agreement with Digital Grid for a term of 12 months. As of December
27, 2018, the Company owed RMB34.34 million in loan principal and RMB1.23 million in accrued interest to Hangzhou Lianluo, its
principal shareholder. Pursuant to an agreement, dated December 27, 2018, the Company, Digital Grid and Hangzhou Lianluo agreed
that the outstanding amount owed by Digital Grid to the Company of RMB35.6 million be repaid by Hangzhou Lianluo on behalf of
Digital Grid, to the Company. This repayment is agreed to be settled in the form of offset against the amount owed by the Company
to Hangzhou Lianluo of RMB35.6 million (approximately $5.2 million) as of December 27, 2018. As a result, the Company no longer
owed or was owed by Hangzhou Lianluo or Digital Grid any amount as of December 31, 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Loans
from Newegg to Affiliate</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 13, 2017, Newegg&nbsp;loaned $12.0 million to Digital Grid under a term loan agreement with a maturity date of April 18,
2017 and an interest rate equal to the prime rate, as defined in the loan agreement. The&nbsp;loan&nbsp;was collateralized by&nbsp;a
security interest in&nbsp;2,000,000 Series AA&nbsp;convertible&nbsp;Preferred Stock&nbsp;of Newegg&nbsp;held by Digital Grid.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 16, 2017, Newegg&nbsp;loaned $50.0 million to Digital Grid under a term loan agreement&nbsp;with a maturity date of&nbsp;June
15, 2018 and an interest rate of 4%&nbsp;per annum. The&nbsp;loan&nbsp;was collateralized by&nbsp;a security interest in 43,167
Series C Shares of Razer Inc., a company incorporated under the laws of the Cayman Islands, or Razer, held by Digital Grid.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 20, 2018, Newegg&nbsp;loaned $20.0 million to Digital Grid under a term loan agreement with a maturity date of June 15,
2018 and an interest rate equal to 4% per annum. The loan was collateralized by&nbsp;a&nbsp;security interest&nbsp;in&nbsp;362,732,301
Ordinary Shares of Razer held by Digital Grid.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 11, 2018, Newegg&nbsp;and Digital Grid entered into an&nbsp;amended&nbsp;and restated&nbsp;loan agreement&nbsp;which&nbsp;combined&nbsp;all
of&nbsp;the remaining&nbsp;unpaid principal&nbsp;and interest on the $50.0 million loan and the $20.0 million loan into an amended&nbsp;and
restated secured promissory note&nbsp;of&nbsp;approximately&nbsp;$23.3 million. The loan&nbsp;replaces, amends, and restates in
their respective&nbsp;entirety the $50.0 million loan and the $20.0 million loan. The new loan&nbsp;had a maturity date of June&nbsp;15,
2018 and carried an interest rate equal to 4% per annum. This loan was collateralized by&nbsp;a&nbsp;security interest in&nbsp;certain
convertible bonds of China Digital Culture (Group) Limited, a company incorporated in the Cayman Islands, in the amount of HK$412,500,000
held by Digital Grid.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 15, 2018, Newegg&nbsp;and Digital Grid entered into the first amendment to the $23.3 million loan, pursuant to which the
interest rate was amended to 5% per annum and the maturity date was&nbsp;extended&nbsp;to September 30, 2018.&nbsp;As of December
31, 2018, there was no outstanding principal balance receivable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On&nbsp;December
17, 2019, Newegg&nbsp;loaned $15.0 million to Digital Grid under a term loan agreement with a maturity date of&nbsp;April&nbsp;30,
2020&nbsp;and a&nbsp;fixed&nbsp;interest rate&nbsp;of 5.0%.&nbsp;The&nbsp;loan was&nbsp;subsequently&nbsp;extended to December
31, 2020.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the years&nbsp;ended December 31, 2018 and 2017, Newegg&nbsp;recorded interest income of $0.9 million and $1.1 million, respectively,
from foregoing loans to affiliate in interest income in the consolidated statement of operations.&nbsp;During the year ended December
31, 2019, Newegg&nbsp;interest income from the foregoing loans to affiliate included in interest income in the consolidated statement
of operations was immaterial.&nbsp;For the six months ended June 30, 2020, Newegg recorded interest income from loans to affiliate
of $0.4 million. As of June 30, 2020, the amount of interest receivable on the $15.0 million loan outstanding as a component of
&ldquo;Due from related parties&rdquo; in the consolidated balance sheet was $0.3 million. As of December 31, 2019,&nbsp;the amount
of&nbsp;interest receivable on the $15.0 million loan outstanding as a component of &ldquo;Due&nbsp;from related parties&rdquo;
in the consolidated balance sheets&nbsp;was immaterial.&nbsp;As of December 31, 2018, there was no outstanding interest receivable&nbsp;from
loans to affiliate.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Loans
from Affiliate&nbsp;to Newegg</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January&nbsp;14, 2019, Newegg&nbsp;entered into three loan agreements with BARD Company Limited, an entity affiliated with Anthony
Chow, Newegg&rsquo;s Chief Executive Officer, pursuant to which Newegg&nbsp;borrowed a total of $15.0 million. For all of the
three loans, the maturity date&nbsp;was&nbsp;March 31, 2019 unless extended to April 30, 2019 in accordance with the terms of
the loan agreements, and the interest rate is 6% per annum. Newegg&nbsp;repaid the three loans in their entirety as of March&nbsp;8,
2019.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Sales
from Newegg to Related Parties&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Due&nbsp;from
related parties&nbsp;and net sales to related parties&nbsp;primarily reflect sales of finished goods and services&nbsp;with the
exception of loans to affiliate as discussed above.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of&nbsp;December 31, 2019 and 2018,&nbsp;due from related parties represent amounts receivable of&nbsp;$1.5 million and&nbsp;$1.5
million, respectively, due from Digital Grid. Sales during the&nbsp;year ended&nbsp;December 31, 2019, 2018 and 2017&nbsp;to this
related party were&nbsp;$0, $0, and $1.5 million, respectively.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2019 and 2018, due from related parties represent amounts receivable of $4.3 million and $3.5 million, respectively,
due from Connect Technova Inc., which was determined to be&nbsp;a related party by virtue of common control. Sales during the&nbsp;year
ended December 31, 2019, 2018 and 2017 to this related party were $0.8 million, $2.9 million and $0.6 million, respectively.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of&nbsp;June 30, 2020 and December 31, 2019,&nbsp;amount due to related parties was immaterial.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Investment&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 17, 2018, Newegg acquired&nbsp;an equity interest in Mountain Capital Fund L.P. from Pegasus View Global Ltd. The sole owner
of Pegasus View Global Ltd&nbsp;is&nbsp;the spouse of&nbsp;a member of&nbsp;the Newegg&rsquo;s Board of Directors.&nbsp;<B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_214"></A>PRINCIPAL
SHAREHOLDERS</FONT></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_215"></A>Security
Ownership of the Company</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The following table sets forth information with respect
to beneficial ownership of our Class A common shares and Class B common shares as of December 22<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">,
</FONT>2020 by: (i) each of our directors and named executive officers, (ii) all directors and named executive officers as a group,
and (iii) each person who is known by us to beneficially own 5% or more of our outstanding Class A common shares and Class B common
shares, respectively. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Information with respect to beneficial ownership has been
furnished by each director, officer or beneficial owner of 5% or more of our Class A common shares and Class B common shares.
Beneficial ownership is determined in accordance with the rules of the SEC and generally requires that such person have voting
or investment power with respect to securities. In computing the number of common shares beneficially owned by a person listed
below and the percentage ownership of such person, including the percentage of total voting shares, common shares underlying options,
warrants or convertible securities held by each such person that are exercisable or convertible within 60 days of December 22<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">,
</FONT>2020 are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person.
Except as otherwise indicated in the footnotes to this table, or as required by applicable community property laws, all persons
listed have sole voting and investment power for all common shares shown as beneficially owned by them. Unless otherwise indicated
in the footnotes, the address for each principal shareholder is in the care of the Company, Room 611, 6th Floor, BeiKong Technology
Building, No. 10 Baifuquan Road, Changping District, Beijing 102200, People&rsquo;s Republic of China. </P>
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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Amount
    of Beneficial Ownership<SUP>(1)</SUP></B></FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Percent
    of</B></FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Percent
    of</B></FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Percent
    of</B></FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Name
    and Address of Beneficial Owner</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Class
    A Common Shares</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Class
    B Common Shares</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Class
    A<BR>
    Common<BR>
    Shares<SUP>(2)</SUP></FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Class
    B<BR>
    Common<BR>
    Shares<SUP>(3)</SUP></FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Total<BR>
    Voting<BR>
    Shares<SUP>(4)</SUP></B></FONT></TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 40%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Bin
    Lin, Chairman and CEO</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Yingmei
    Yang, Director and Interim CFO</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Richard
    Zhiqiang Chang, Director</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Bin
    Pan, Director</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fuya
    Zheng, Director</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
    officers and directors as a group</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Zhitao
    He<SUP>(5)</SUP></FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">58,937</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,513,888</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.67</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">%</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">100</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">%</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><P STYLE="margin: 0pt 0">87.60</P></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ping
    Chen<SUP>(6)</SUP></FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">267,425</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">11.75</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">%</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.65</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Intracoastal
    Capital, LLC<SUP>(7)</SUP></FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">392,500</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">0</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">9.99</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">%</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.38</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">%<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Less
                                         than 1%</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">(1)</FONT></TD><TD STYLE="text-align: left">Beneficial
                                         Ownership is determined in accordance with the rules of the SEC and generally includes
                                         voting or investment power with respect to securities.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif">(2)</FONT> </TD><TD STYLE="text-align: left"> Based
                                         on 2,210,683 Class A common shares outstanding as of December 22<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">,
                                         </FONT>2020. Holders of Class A common shares are entitled to one vote per share. </TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"> <FONT STYLE="font-family: Times New Roman, Times, Serif">(3)</FONT> </TD><TD STYLE="text-align: left"> Based
                                         on 1,388,888 Class B common shares outstanding as of December 22, 2020. Holders of Class
                                         B common shares are entitled to ten votes per share. Each Class B common share is convertible
                                         at any time by the holder into one Class A common share. </TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">(4)</FONT></TD><TD STYLE="text-align: left">Percentage
                                         of Total Voting Shares represents total ownership with respect to all Class A common
                                         shares and Class B common shares, voting together as a single class.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">(5)</FONT></TD><TD STYLE="text-align: left">Includes
                                         58,937 Class A common shares held by Hyperfinite Galaxy Holding Limited, a company controlled
                                         by Zhitao He, 1,388,888 Class B common shares held by Hangzhou Lianluo and 125,000 Class
                                         B common shares issuable upon the exercise of a warrant issued to Hangzhou Lianluo that
                                         is exercisable within 60 days. Mr. He is the chairman and chief executive officer of
                                         Hangzhou Lianluo.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">(6)</FONT></TD><TD STYLE="text-align: left">Includes
                                         201,692 Class A common shares issued and outstanding and 65,733 Class A common shares
                                         underlying options exercisable within 60 days.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">(7)</TD><TD STYLE="text-align: left">Represents Class A
                                         common shares issuable upon the exercise of warrants that are exercisable within 60 days; provided that <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the holder may
not exercise any portion of the warrant if the holder (together with its affiliates) would beneficially own in excess of 9.99%
of the number of our common shares outstanding immediately after giving effect to the exercise</FONT>.
                                         Based on a selling stockholder questionnaire, dated March 6, 2020, Mitchell P. Kopin
                                         and Daniel B. Asher, each of whom are managers of Intracoastal Capital, LLC, have shared
                                         voting control and investment discretion over the securities held by Intracoastal Capital,
                                         LLC. As a result, each of Mr. Kopin and Mr. Asher may be deemed to have beneficial ownership
                                         of the securities held by it. The business address of this entity is 2211A Lakeside Drive,
                                         Bannockburn, IL 60015.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Except
as contemplated by the merger agreement, we do not currently have any arrangements which if consummated may result in a change
of control of the Company.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_216"></A>Security
Ownership of Newegg</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The following table sets forth information with respect
to beneficial ownership of the voting securities of Newegg as of December 22, 2020 by: (i) each of its directors and named executive
officers, (ii) all directors and named executive officers as a group, and (iii) each person who is known by Newegg to beneficially
own 5% or more of each class of its outstanding voting securities. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Information with respect to beneficial ownership has been
furnished by each director, officer or beneficial owner of 5% or more of Newegg&rsquo;s voting securities. Beneficial ownership
is determined in accordance with the rules of the SEC and generally requires that such person have voting or investment power
with respect to securities. In computing the number of shares beneficially owned by a person listed below and the percentage ownership
of such person, including the percentage of total voting shares, common stock underlying options, warrants or convertible securities
held by each such person that are exercisable or convertible within 60 days of December 22, 2020 are deemed outstanding, but are
not deemed outstanding for computing the percentage ownership of any other person. Except as otherwise indicated in the footnotes
to this table, or as required by applicable community property laws, all persons listed have sole voting and investment power
for all shares shown as beneficially owned by them. Unless otherwise indicated in the footnotes, the address for each principal
shareholder is in the care of Newegg, 17560 Rowland Street, City of Industry, CA 91748. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"> <FONT STYLE="font-size: 10pt"><B>Amount
    of Beneficial Ownership<SUP>(1)</SUP></B></FONT> </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="14" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"> <FONT STYLE="font-size: 10pt"><B>Percentage
    of<SUP>(2)(3)</SUP></B></FONT> </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold"> Name and Address of Beneficial Owner </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"> Class A Common Stock </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"> Series A Preferred Stock </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"> Series AA Preferred Stock </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"> Class A Common Stock </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"> Series A Preferred Stock </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"> Series AA Preferred Stock </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"> <FONT STYLE="font-size: 10pt"><B>Total
    Voting Shares<SUP>(4)</SUP></B></FONT> </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 30%; text-align: left"> <FONT STYLE="font-size: 10pt">Zhitao He, Chairman<SUP>(5)</SUP></FONT> </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 7%; text-align: right"> 490,706 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 7%; text-align: right"> 12,782,546 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 7%; text-align: right"> 24,870,027 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 7%; text-align: right"> 57.79 </TD><TD STYLE="width: 1%; text-align: left"> % </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 7%; text-align: right"> 35.04 </TD><TD STYLE="width: 1%; text-align: left"> % </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 7%; text-align: right"> 100 </TD><TD STYLE="width: 1%; text-align: left"> % </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 7%; text-align: right"> 61.37 </TD><TD STYLE="width: 1%; text-align: left"> % </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left"> <FONT STYLE="font-size: 10pt">Fred Faching Chang,
    Vice Chairman<SUP>(6)</SUP></FONT> </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 22,678,616 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 32.28 </TD><TD STYLE="text-align: left"> % </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 38.54 </TD><TD STYLE="text-align: left"> % </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Anthony Chow, Director and CEO </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Paul Wu, Director </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Gregory Moore, Director </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Pen &ldquo;Ben&rdquo; Liao, Director </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Yingmei Yang, Director </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 10pt">Robert Chang, CFO<SUP>(7)</SUP></FONT> </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 102,500 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 10.77 </TD><TD STYLE="text-align: left"> % </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">*</FONT> </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Jamie Spannos, COO </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Montaque Hou, CTO </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 10pt">Matt Strathman, General Counsel<SUP>(8)</SUP></FONT> </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 75,000 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 8.12 </TD><TD STYLE="text-align: left"> % </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> <FONT STYLE="font-size: 10pt">*</FONT> </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; font-weight: bold; text-align: left"> All officers and directors
    as a group </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 688,206 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 35,461,162 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 24,870,027 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 76.68 </TD><TD STYLE="text-align: left"> % </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 67.32 </TD><TD STYLE="text-align: left"> % </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 100 </TD><TD STYLE="text-align: left"> % </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 99.92 </TD><TD STYLE="text-align: left"> % </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">* Less than 1%</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(1)</TD><TD>Beneficial Ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power
with respect to securities.</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> (2) </TD><TD> Based (i)&nbsp;849,159&nbsp;shares of Newegg Class A
                                         common stock, (ii) 24,870,027 shares of Newegg Series AA preferred stock and (iii) 36,475,987
                                         shares of Newegg Series A preferred stock outstanding as of December 22, 2020. </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> (3) </TD><TD> Each share of Newegg Class A common stock is entitled
                                         to one vote. Each share of Newegg Series A preferred stock and Series AA preferred stock
                                         is entitled to ten votes as of December 22<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">,
                                         </FONT>2020. </TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(4)</TD><TD>Percentage of Total Voting Shares represents total ownership with respect to all Newegg Class A common stock, Newegg Class
B common stock, Newegg Series A preferred stock, and Newegg Series AA preferred stock, voting together as a single class.</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(5)</TD><TD>Includes (i) 490,706 shares of Newegg Class A common stock held by Digital Grid, a company controlled by Zhitao He, (ii) includes
12,782,546 shares of Newegg Series A preferred stock held by Digital Grid, and (iii) includes 24,870,027 shares of Newegg Series
AA preferred stock held by Digital Grid.</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(6)</TD><TD>Includes (i) 15,829,054 shares of Series A preferred stock held by Tekhill USA, LLC, (ii) 4,044,048 shares of Series A preferred
stock held by Fred Chang Partners Trust, (iii) 1,567,790 shares of Series A preferred stock held by Nabal Spring, LLC, (iv) 930,509
shares of Series A preferred stock held by Chang Trust 2008, (v) 136,540 shares of Series A preferred stock held by Chang 2009
Annuity Trust No. 1, (vi) 56,891 shares of Series A preferred stock held by Chang 2009 Annuity Trust No.2, and (vii) 113,784 shares
of Series A preferred stock held by Chang 2009 Annuity Trust No. 3. Tekhill USA, LLC, Fred Chang Partners Trust, Nabal Spring,
LLC, Chang Trust 2008, Chang 2009 Annuity Trust No. 1, Chang 2009 Annuity Trust No. 2, and Chang 2009 Annuity Trust No. 3, are
all controlled by Fred Faching Chang.</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(7)</TD><TD>Includes 102,500 shares of Newegg Class A common stock issuable upon options held by Robert Chang, exercisable within 60 days.</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(8)</TD><TD>Includes 75,000 shares of Newegg Class A common stock issuable upon options held by Matt Strathman, exercisable within 60 days.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A NAME="al_217"></A>Security
Ownership of the Company After the Merger</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth information with respect to beneficial ownership of our common shares following the merger by: (i)
each of our directors and named executive officers after the merger, (ii) all directors and named executive officers after the
merger as a group, and (iii) each person who is known by us to beneficially own 5% or more of our outstanding common shares after
the merger.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Information with respect to beneficial ownership has been
furnished by each director, officer or beneficial owner of 5% or more of our common shares. Beneficial ownership is determined
in accordance with the rules of the SEC and generally requires that such person have voting or investment power with respect to
securities. In computing the number of common shares beneficially owned by a person listed below and the percentage ownership
of such person, common shares underlying options, warrants or convertible securities held by each such person that are exercisable
or convertible within 60 days of December 22, 2020 are deemed outstanding, but are not deemed outstanding for computing the percentage
ownership of any other person. Except as otherwise indicated in the footnotes to this table, or as required by applicable community
property laws, all persons listed have sole voting and investment power for all common shares shown as beneficially owned by them.
Unless otherwise indicated in the footnotes, the address for each principal shareholder is in the care of Newegg, 17560 Rowland
Street, City of Industry, CA 91748. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold">Name and Address of Beneficial Owner</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Title of Class</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Amount of Beneficial Ownership<SUP>(1)</SUP></B></FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Percent of Class<SUP>(2)</SUP></B></FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Anthony Chow, Director and Chief Executive Officer</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">Common Shares</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 58%; text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-size: 10pt">Robert Chang, Chief Financial Officer<SUP>(3)</SUP></FONT></TD><TD STYLE="padding-bottom: 1.5pt; width: 1%">&nbsp;</TD>
    <TD STYLE="width: 17%; text-align: center; padding-bottom: 1.5pt">Common Shares</TD><TD STYLE="padding-bottom: 1.5pt; width: 1%">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; width: 1%; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; width: 9%; text-align: right">598,774</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; width: 1%">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; width: 1%; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Jamie Spannos, Chief Operating Officer</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">Common Shares</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Montaque Hou, Chief Technology Officer</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">Common Shares</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-size: 10pt">Matt Strathman, General Counsel<SUP>(4)</SUP></FONT></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">Common Shares</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">438,127</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-size: 10pt">Zhitao &ldquo;Tom&rdquo; He, Chairman of the Board<SUP>(5)</SUP></FONT></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">Common Shares</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">224,394,416</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">61.16</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-size: 10pt">Fred Faching Chang, Director<SUP>(6)</SUP></FONT></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">Common Shares</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">132,481,667</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">36.11</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Yingmei Yang, Director</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">Common Shares</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Gregory Moore, Independent Director</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">Common Shares</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Paul Wu, Independent Director</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">Common Shares</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">All officers and directors as a group</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt">Common Shares</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">97.27</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">* Less than 1%</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(1)</TD><TD>Beneficial Ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power
with respect to securities.</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(2)</TD><TD>Based on 366,925,103 common shares outstanding after the
                                         merger.</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(3)</TD><TD>Includes 598,744 shares of common shares issuable upon options held by Robert Chang, exercisable within 60 days.</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(4)</TD><TD>Includes 438,127 shares of common shares issuable upon options held by Matt Strathman, exercisable within 60 days.</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(5)</TD><TD>Includes (i) 222,821,591 common shares held by Digital Grid, (ii) 58,937 common shares held by Hyperfinite Galaxy Holding Limited,
(iii) 1,388,888 common shares held by Hangzhou Lianluo and (iv) 125,000 common shares issuable upon the exercise of a warrant issued
to Hangzhou Lianluo that is exercisable within 60 days.</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(6)</TD><TD>Includes (i) 92,468,584 shares of Series A preferred stock held by Tekhill USA, LLC, (ii) 23,624,115 shares of Series A preferred
stock held by Fred Chang Partners Trust, (iii) 9,158,558 shares of Series A preferred stock held by Nabal Spring, LLC, (iv) 5,435,754
shares of Series A preferred stock held by Chang Trust 2008, (v) 797,625 shares of Series A preferred stock held by Chang 2009
Annuity Trust No. 1, (vi) 332,340 shares of Series A preferred stock held by Chang 2009 Annuity Trust No.2, and (vii) 664,691 shares
of Series A preferred stock held by Chang 2009 Annuity Trust No. 3. Tekhill USA, LLC, Fred Chang Partners Trust, Nabal Spring,
LLC, Chang Trust 2008, Chang 2009 Annuity Trust No. 1, Chang 2009 Annuity Trust No. 2, and Chang 2009 Annuity Trust No. 3, are
all controlled by Fred Faching Chang.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>


<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><A NAME="al_218"></A>TAXATION</P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><I>The following is a
general summary of certain material BVI, PRC and U.S. federal income tax considerations. The discussion is not intended to be,
nor should it be construed as, legal or tax advice to any particular shareholder or prospective shareholder. The discussion is
based on laws and relevant interpretations thereof in effect as of the date hereof, all of which are subject to change or different
interpretations, possibly with retroactive effect.</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><A NAME="al_219"></A>BVI
Taxation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">The BVI does not impose
a withholding tax on dividends paid to holders of our common shares, nor does the BVI levy any capital gains or income taxes on
us. Further, a holder of our common shares who is not a resident of the BVI is exempt from the BVI income tax on dividends paid
with respect to the common shares. Holders of common shares are not subject to the BVI income tax on gains realized on the sale
or disposition of the common shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Our common shares are
not subject to transfer taxes, stamp duties or similar charges in the BVI. However, as a company incorporated under the BVI Act,
we are required to pay the BVI government an annual license fee based on the number of shares we are authorized to issue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">There is no income tax
treaty or convention currently in effect between the United States and the BVI.<B><I>&nbsp;</I></B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><A NAME="al_220"></A>PRC
Taxation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">We are a holding company
incorporated in the BVI, which directly holds our equity interests in our PRC operating subsidiaries. The EIT Law and its implementation
rules, both of which became effective as of January 1, 2008, as amended on February 24, 2017, provide that a PRC enterprise is
subject to a standard income tax rate of 25% and China-sourced income of foreign enterprises, such as dividends paid by a PRC
subsidiaries to its overseas parent, will normally be subject to PRC withholding tax at a rate of 10%, unless there are applicable
treaties between the overseas parent&rsquo;s jurisdiction of incorporation and China to reduce such rate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">The EIT Law also provides
that enterprises organized under the laws of jurisdictions outside China with their &ldquo;de facto management bodies&rdquo; located
within China may be considered PRC resident enterprises and therefore subject to PRC enterprise income tax at the rate of 25%
on their worldwide income. Its implementation rules further define the term &ldquo;de facto management body&rdquo; as the management
body that exercises substantial and overall management and control over the business, personnel, accounts and properties of an
enterprise. While we do not currently consider our company or any of our overseas subsidiaries to be a PRC resident enterprise,
there is a risk that the PRC tax authorities may deem our company or any of our overseas subsidiaries as a PRC resident enterprise
since a substantial majority of the members of our management team as well as the management team of our overseas subsidiaries
are located in China, in which case we or the overseas subsidiaries, as the case may be, would be subject to the PRC enterprise
income tax at the rate of 25% on worldwide income. If the PRC tax authorities determine that our BVI holding company is a &ldquo;resident
enterprise&rdquo; for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. Under the
EIT Law and its implementation regulations issued by the State Council, a 10% PRC withholding tax is applicable to dividends paid
to investors that are non-resident enterprises, which do not have an establishment or place of business in the PRC or which have
such establishment or place of business but the dividends are not effectively connected with such establishment or place of business,
to the extent such dividends are derived from sources within the PRC. In addition, any gain realized on the transfer of shares
by such investors is also subject to PRC tax at a rate of 10%, if such gain is regarded as income derived from sources within
the PRC. If we are deemed a PRC resident enterprise, dividends paid on our common shares, and any gain realized from the transfer
of our common shares, may be treated as income derived from sources within the PRC and may as a result be subject to PRC taxation.
Furthermore, if we are deemed a PRC resident enterprise, dividends paid to individual investors who are non-PRC residents and
any gain realized on the transfer of common shares by such investors may be subject to PRC tax at a current rate of 20% (which
in the case of dividends may be withheld at source). Any PRC tax liability may be reduced under applicable tax treaties or tax
arrangements between China and other jurisdictions. If we or any of our subsidiaries established outside China are considered
a PRC resident enterprise, it is unclear whether holders of our common shares would be able to claim the benefit of income tax
treaties or agreements entered into between China and other countries or areas.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; text-indent: 0.25in; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><A NAME="al_221"></A>U.S.
Federal Income Taxation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"> The following is a
discussion of certain material U.S. federal income tax consequences of the acquisition, ownership and disposition of our common
shares. It does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a particular
person&rsquo;s situation. The discussion applies only to holders that hold their common shares as capital assets (generally property
held for investment) within the meaning of Section 1221 of the Code. This discussion is based on the Code, income tax regulations
promulgated thereunder, judicial positions, published positions of the IRS, and other applicable authorities, all as in effect
as of the date hereof and all of which are subject to change, possibly with retroactive effect. This discussion is general in
nature and is not exhaustive of all possible tax considerations, nor does the discussion address any state, local or foreign tax
considerations or any U.S. tax considerations (e.g., estate or gift tax) that may be applicable to particular holders other than
U.S. federal income tax considerations. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">This discussion does
not address all aspects of U.S. federal income taxation that may be relevant in light of particular circumstances, nor does it
address the U.S. federal income tax consequences to persons who are subject to special rules under U.S. federal income tax law,
including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(a)</TD><TD>banks, insurance companies or other financial institutions;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(b)</TD><TD>persons subject to the alternative minimum tax;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(c)</TD><TD>tax-exempt organizations;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(d)</TD><TD>controlled foreign corporations, passive foreign investment
                                         companies and corporations that accumulate earnings to avoid United States federal income
                                         tax;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(e)</TD><TD>certain former citizens or long-term residents of the United
                                         States;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(f)</TD><TD>dealers in securities or currencies;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(g)</TD><TD>traders in securities that elect to use a mark-to-market
                                         method of accounting for their securities holdings;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(h)</TD><TD>persons that own, or are deemed to own, more than five percent
                                         of our capital stock;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(i)</TD><TD>holders who acquired our stock as compensation or pursuant
                                         to the exercise of a stock option; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(j)</TD><TD>persons who hold our shares as a position in a hedging transaction,
                                         &ldquo;straddle,&rdquo; or other risk reduction transaction.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">For purposes of this
discussion, a U.S. holder is (i) an individual who is a citizen or resident of the United States for U.S. federal income tax purposes;
(ii) a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or
under the laws of the United States (or treated as such under applicable U.S. tax laws), any State thereof, or the District of
Columbia; (iii) an estate the income of which is subject to U.S. federal income tax regardless of its source; or (iv) a trust
if (a) a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons
have the authority to control all substantial decisions of the trust, or (b) it has a valid election in effect under applicable
law and regulations to be treated as a U.S. person for U.S. federal income tax purposes. A non-U.S. holder is a holder that is
neither a U.S. holder nor a partnership or other entity classified as a partnership for U.S. federal income tax purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">In the case of a partnership
or entity classified as a partnership for U.S. federal income tax purposes, the U.S. federal income tax treatment of a partner
generally will depend on the status of the partner and the activities of the partnership. Partners of partnerships should consult
their tax advisors regarding the U.S. federal income tax consequences to them of the merger or of the ownership and disposition
of our common shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>U.S. Federal Income
Tax Consequences for U.S. Holders</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><I><U>Distributions</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"> We do not currently
anticipate paying distributions on our common shares. In the event that distributions are paid, however, the gross amount of such
distributions will be included in the gross income of the U.S. holder as dividend income on the date of receipt to the extent
that the distribution is paid out of current or accumulated earnings and profits, as determined under U.S. federal income tax
principles. Notwithstanding that it is incorporated in the British Virgin Islands, the Company expects to be treated under Section
7874(b) of the Code as a domestic corporation for U.S. federal income tax purposes, in respect of both the merger transaction
and for future periods. Accordingly, dividends paid by the Company should generally be eligible for the dividends received deduction
allowed to corporations in respect of dividends received from U.S. corporations. Dividends received by non-corporate U.S. holders,
including individuals, may be subject to reduced rates of taxation under current law. A U.S. holder may be eligible to claim a
foreign tax credit with respect to any PRC withholding tax imposed on dividends paid by us. However, the foreign tax credit rules
are complex, and U.S. holders should consult their own tax advisors with respect to any benefits they may be entitled to under
the foreign tax credit rules. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"> To the extent that
dividends paid on our common shares exceed current and accumulated earnings and profits, the distributions will be treated first
as a tax-free return of the holder&rsquo;s tax basis in our common shares, and to the extent that the amount of the distribution
exceeds the holder&rsquo;s tax basis, the excess will be treated as gain from the disposition of those common shares. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><I><U>Sale or Other Disposition</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">U.S. holders of our common
shares will recognize taxable gain or loss on any sale, exchange, or other taxable disposition of common shares equal to the difference
between the amounts realized for the common shares and the U.S. holder&rsquo;s tax basis in the common shares. This gain or loss
generally will be capital gain or loss. Under current law, non-corporate U.S. holders, including individuals, are eligible for
reduced tax rates if the common shares have been held for more than one year. The deductibility of capital losses is subject to
limitations. A U.S. holder may be eligible to claim a foreign tax credit with respect to any PRC withholding tax imposed on gain
from the sale or other disposition of common shares. However, the foreign tax credit rules are complex, and U.S. holders should
consult their own tax advisors with respect to any benefits they may be entitled to under the foreign tax credit rules.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><I><U>Unearned Income
Medicare Contribution</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Certain U.S. holders
who are individuals, trusts or estates are required to pay an additional 3.8% Medicare tax on, among other things, dividends on
and capital gains from the sale or other disposition of shares of stock. U.S. holders should consult their own advisors regarding
the effect, if any, of this rule on their ownership and disposition of our common shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>U.S. Federal Income
Tax Consequences for Non-U.S. Holders</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><I><U>Distributions</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">The rules applicable
to non-U.S. holders for determining the extent to which distributions on our common shares, if any, constitute dividends for U.S.
federal income tax purposes are the same as for U.S. holders. See &ldquo;&mdash;U.S. Federal Income Tax Consequences for U.S.
Holders&mdash;Distributions.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"> If, at any time
after the merger, the Company pays dividends to its non-U.S. holders, the Company will be required to impose U.S. withholding
taxes on such dividends at the statutory rate of 30%. That rate may be reduced under an applicable income tax treaty between the
United States and the holder&rsquo;s country of residence. Non-U.S. holders must satisfy the eligibility requirements under the
applicable income tax treaty and provide the appropriate IRS Form W-8 or other withholding certificate to the Company as the withholding
agent. Under the prevailing U.S. &ndash; China income tax treaty, the rate of U.S. withholding tax on dividends paid to PRC residents
who meet the relevant eligibility requirements is reduced to 10%. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Dividends received by
a non-U.S. holder that are effectively connected with such holder&rsquo;s conduct of a U.S. trade or business (and, if an income
tax treaty applies, are attributable to a permanent establishment maintained by the non-U.S. holder in the U.S.) will be subject
to U.S. federal income tax, net of certain deductions, at the rates applicable to U.S. persons. In addition, corporate non-U.S.
holders may be subject to an additional branch profits tax equal to 30% or such lower rate as may be specified by an applicable
tax treaty on dividends received that are effectively connected with the conduct of a trade or business in the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><I><U>Sale or Other Disposition</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Except as described below
for a reduced rate of U.S. withholding tax pursuant to an applicable income tax treaty, any gain realized by a non-U.S. holder
upon the sale or other disposition of our common shares generally will not be subject to U.S. federal income tax unless:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the gain is effectively connected with the conduct of
                                         a trade or business in the United States by such non-U.S. holder, and, if an income tax
                                         treaty applies, is attributable to a permanent establishment maintained by such non-U.S.
                                         holder in the U.S.;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the non-U.S. holder is an individual who is present in
                                         the United States for 183 days or more in the taxable year of the disposition, and certain
                                         other conditions are met; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the Company is or has been a &ldquo;U.S. real property
                                         holding corporation,&rdquo; or USRPHC, for U.S. federal income tax purposes at any time
                                         during the shorter of the five-year period ending on the date of disposition or the period
                                         during which the holder has held our common shares.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-align: left"></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Non-U.S. holders whose
gain is described in the first bullet point above will be subject to U.S. federal income tax on the gain derived from the sale,
net of certain deductions, at the rates applicable to U.S. persons. Corporate non-U.S. holders whose gain is described in the
first bullet point above may also be subject to the branch profits tax described above at a 30% rate or lower rate provided by
an applicable income tax treaty. Individual non-U.S. holders described in the second bullet point above will be subject to a flat
30% U.S. federal income tax rate on the gain derived from the sale, which may be offset by U.S.-source capital losses, even though
such non-U.S. holders are not considered to be residents of the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"> A corporation will
be a USRPHC if the fair market value of its U.S. real property interests equals or exceeds 50 percent of the aggregate of its
real property interests (U.S. and non-U.S.) and its assets used or held for use in a trade or business. Because we do not currently
own significant U.S. real property, we believe that we are not currently and will not become a USRPHC. However, because the determination
of whether we are a USRPHC depends on the fair market value of our U.S. real property relative to the fair market value of our
other business assets, there can be no assurance that we will not become a USRPHC in the future. Even if we become a USRPHC, however,
as long as our common shares are regularly traded on an established securities market, such common shares will be treated as U.S.
real property interests only if a non-U.S. holder actually or constructively holds more than 5% of such regularly traded common
shares at any time during the applicable period specified in the Code. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Foreign Account
Tax Compliance</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"> The Foreign Account
Tax Compliance provisions of the Hiring Incentives to Restore Employment Act (generally referred to as FATCA), when applicable,
will impose a U.S. federal withholding tax of 30% on payments of dividends on, and gross proceeds from dispositions of, our common
shares that are held through &ldquo;foreign financial institutions&rdquo; (a term that is broadly defined for this purpose and
that in general includes investment vehicles) and certain other non-U.S. entities unless various U.S. information reporting and
due diligence requirements (generally relating to ownership by U.S. persons of certain interests in or accounts with those entities)
have been satisfied or an exemption applies. An intergovernmental agreement between the United States and an applicable foreign
country may modify these requirements. U.S. Holders should consult their tax advisers regarding the effect, if any, of the FATCA
provisions on their particular circumstances. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Information Reporting
and Backup Withholding</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Payments of proceeds
on the disposition of stock made to a holder of our common shares may be subject to information reporting and backup withholding
at a current rate of 24% unless such holder provides a correct taxpayer identification number on IRS Form W-9 (or other appropriate
withholding form) or establishes an exemption from backup withholding, for example by properly certifying the holder&rsquo;s non-U.S.
status on a Form W-8BEN, Form W-8BEN-E or another appropriate version of IRS Form W-8.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Backup withholding is
not an additional tax; rather, the U.S. income tax liability of persons subject to backup withholding will be reduced by the amount
of tax withheld. If withholding results in an overpayment of taxes, a refund or credit may generally be obtained from the IRS,
provided that the required information is furnished to the IRS in a timely manner.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><A NAME="al_222"></A>DESCRIPTION
OF SECURITIES</P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As described elsewhere in this proxy statement/prospectus,
at the special meeting shareholders will be asked to adopt an amendment and restatement of our current amended and restated memorandum
and articles of association. Unless otherwise indicated below, the following discussion of the rights of our shareholders reflects
such amendment and restatement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0">We are a BVI business company incorporated
with limited liability and our affairs are governed by our amended and restated memorandum and articles of association, the BVI
Act, the common law of the BVI, our corporate governance documents and rules and regulations of the stock exchange on which our
common shares are traded.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">We
are authorized to issue a maximum 6,250,000 common shares, $0.002731 par value per share, of which 4,736,111 shares are designated
as Class A common shares and 1,513,889 shares are designated as Class B common shares. As of the date of this proxy statement/prospectus,
there are 2,210,683 Class A common shares and 1,388,888 Class B common shares issued and outstanding. All shares are fully paid.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Upon
filing of the amended and restated memorandum and articles of association to be adopted at the special meeting, we will be authorized
to issue an unlimited number of common shares, $[&nbsp;&nbsp;] par value per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">The board of directors
has the right, in its absolute discretion and without approval of the existing shareholders, to issue shares, grant rights over
existing shares or issue other securities in one or more series as it deems necessary and appropriate and to determine designations,
powers, preferences, privileges and other rights, including dividend rights, conversion rights, terms of redemption and liquidation
preferences, any or all of which may be greater than the powers and rights associated with the shares held by existing shareholders,
at such times and on such other terms as it deems proper. No preferred shares have been issued.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><A NAME="al_223"></A>Rights
and Obligations of Shareholders</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Each of common share
confers on its holder:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">the right to vote;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: left">the right to an equal share
                                         in any dividend paid by the Company in accordance with the BVI Act; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD>the right to an equal share in the distribution of the
                                         surplus of the Company.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Voting Rights</I></B>.
Each common share is entitled to one (1) vote on all matters subject to vote at general meetings of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Dividends</I></B>.
The holders of common shares are entitled to such dividends as may be declared by the directors of the Company at such time and
of such an amount as the directors think fit if they are satisfied, on reasonable grounds, that immediately after the distribution,
the value of Company assets exceeds the Company&rsquo;s liabilities and the Company will be able to pay its debts as they fall
due.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Pre-emptive rights</I></B><I>.&nbsp;</I>There
are no pre-emptive rights applicable to the issue by the Company of new shares under either the BVI Act or the Company&rsquo;s
amended and restated memorandum and articles of association.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><A NAME="al_224"></A>The
Investor Warrants</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">As a result of the private placements that closed on February 14,
2020, February 25, 2020, and March 2, 2020, we have outstanding warrants issued to several investors to purchase 1,373,750 of our
Class A common shares. Following the redesignation, these warrants will be exercisable for common shares. The features of these
investor warrants are discussed below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Exercise Price</I></B>.
The investor warrants issued on February 14, 2020, or the February 14<SUP>th</SUP>&nbsp;warrants, for the purchase of up to 323,750
common shares have an exercise price of $4.9912 per share. Both of the investor warrants issued on February 25, 2020, or the February
25<SUP>th&nbsp;</SUP>warrants, for the purchase of up to 437,500 common shares and the investor warrants issued on March 2, 2020,
or the March 2<SUP>nd</SUP>&nbsp;warrants, for the purchase of up to 612,500 common shares have an initial exercise price of $5.6
per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Exercisability</I></B>.
The investor warrants are exercisable for a period of five and one-half years commencing on February 14, 2020 and expiring on
August 14, 2025, for the February 14<SUP>th</SUP>&nbsp;warrants, on February 25, 2020 and expiring on August 25, 2025, for the
February 25<SUP>th</SUP>&nbsp;warrants, and on March 2, 2020 and expiring on September 2, 2025, for the March 2<SUP>nd</SUP>&nbsp;warrants.
The investor warrants will be exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed
exercise notice and, at any time a registration statement registering the issuance of common shares underlying the investor warrants
under the Securities Act is effective and available for the issuance of such shares, or an exemption from registration under the
Securities Act is available for the issuance of such shares, by payment in full in immediately available funds for the number
of common shares purchased upon such exercise. If a registration statement registering the issuance of the common shares underlying
the investor warrants under the Securities Act is not effective or available, at any time after the six-month anniversary of the
warrant issue date, the holder may, in its sole discretion, elect to exercise the investor warrants through a cashless exercise,
in which case the holder would receive upon such exercise the net number of common shares determined according to the formula
set forth in the warrant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Exercise Limitation</I></B>.
A holder will not have the right to exercise any portion of the investor warrants if the holder (together with its affiliates)
would beneficially own in excess of 4.99% (or, upon election of the holder, 9.99%) of the number of our common shares outstanding
immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the
warrants. Any holder may increase or decrease such percentage, but in no event may such percentage be increased to more than 9.99%,
provided that any increase will not be effective until the 61st day after such election.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Exercise Price
Adjustment</I></B>. The exercise price of the investor warrants is subject to appropriate adjustment in the event of certain stock
dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our common shares
and also upon any distributions of assets, including cash, stock or other property to our shareholder. The investor warrants also
contain full ratchet anti-dilution protection upon the issuance of any common shares, securities convertible into common shares
or certain other issuances at a price below the then-existing exercise price of the investor warrants, with certain exceptions,
and, with respect to the February 25<SUP>th</SUP>&nbsp;warrants, subject to the exercise price never being adjusted to a price
less than $0.1701, and with respect to the March 2<SUP>nd</SUP>&nbsp;warrants, subject to the exercise price never being adjusted
to a price less than $0.18. The terms of the investor warrants, including these anti-dilution protections, may make it difficult
for us to raise additional capital at prevailing market terms in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Exchange Listing</I></B>.
There is no established trading market for the investor warrants and we do not expect a market to develop. In addition, we do
not intend to apply for the listing of the investor warrants on any national securities exchange or other trading market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Participation Rights</I></B><I>.&nbsp;</I>If
at any time we grant, issue or sell any common share equivalents or rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any common shares, the holder of the investor warrants will be entitled to acquire, upon the
terms applicable to such rights, subject to the beneficial ownership limitations, the aggregate amount of securities which the
holder of the investor warrants could have acquired if the Holder had held the number of common shares acquirable upon complete
exercise of the investor warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Fundamental Transactions</I></B>.
If (i) we, directly or indirectly, in one or more related transactions effect any merger or consolidation of the Company with
or into another person, (ii) we, directly or indirectly, effect any sale, lease, license, assignment, transfer, conveyance or
other disposition of all or substantially all of our assets in one or a series of related transactions, (iii) any, direct or indirect,
purchase offer, tender offer or exchange offer (whether by us or another person) is completed pursuant to which holders of common
shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by
the holders of 50% or more of the outstanding common shares, (iv) we, directly or indirectly, in one or more related transactions
effect any reclassification, reorganization or recapitalization of the common shares or any compulsory share exchange pursuant
to which the common shares are effectively converted into or exchanged for other securities, cash or property, or (v) we, directly
or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another person
or group of persons whereby such other person or group acquires more than 50% of the outstanding common shares (not including
any common shares held by the other person or other persons making or party to, or associated or affiliated with the other persons
making or party to, such stock or share purchase agreement or other business combination) (each a referred to as a fundamental
transaction), then the successor entity will succeed to, and be substituted for us, and may exercise every right and power that
we may exercise and will assume all of our obligations under the investor warrants with the same effect as if such successor entity
had been named in the investor warrant itself. If holders of our common shares are given a choice as to the securities, cash or
property to be received in a fundamental transaction, then the holder of investor warrants shall be given the same choice as to
the consideration it receives upon any exercise of the investor warrants following such fundamental transaction. In addition,
the successor entity, at the request of the holders of investor warrants, will be obligated to purchase any unexercised portion
of the investor warrants in accordance with the terms of such warrants.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Dividends</I></B>.
If, at any time while the investor warrants are outstanding, we declare or make any dividend or other distribution of our assets
(or rights to acquire our assets) to holders of our common shares, by way of return of capital or otherwise, then each holder
of investor warrants shall be entitled to participate in such distribution, subject to the beneficial ownership limitations, to
the same extent that the holder would have participated therein if the holder had held the number of common shares acquirable
upon complete exercise of the investor warrants immediately prior to the record date for such distribution.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Rights as a Shareholder</I></B>.
Except as otherwise provided in the investor warrants or by virtue of such holder&rsquo;s ownership of our common shares, the
holder of investor warrants will not have the rights or privileges of a holder of our common shares, including any voting rights,
until the holder exercises the warrant.</P>


<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><A NAME="al_225"></A>Hangzhou
Lianluo Warrants</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">On August 18, 2016, the
Company closed the sale of warrants to purchase 125,000 of our Class B common shares to Hangzhou Lianluo pursuant to the terms
of a certain securities purchase agreement. These warrants are exercisable at any time for an exercise price of $17.6 per share,
with no expiration date.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">As described elsewhere
in this proxy statement/prospectus, Hangzhou Lianluo has agreed that, effective at the time of the merger, the warrant shall be
exercisable for Class A common shares instead of Class B common shares. Following the redesignation, these warrants will be
exercisable for common shares.</P>

<P STYLE="margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><A NAME="al_226"></A>Amended
and Restated Memorandum and Articles of Association</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">We are registered in the BVI and have been assigned company
number 553525 in the register of companies. Our registered office is at the offices of Vistra (BVI) Limited, of Vistra Corporate
Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Objects of the
Company</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Under our amended and
restated memorandum and articles of association, the objects of our Company are unrestricted and we have the full power and authority
to carry out any object not prohibited by BVI law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Amendment</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Section 12.1 of our amended
and restated memorandum and articles of association provides that the Company may amend the memorandum of association or articles
of association by resolution of shareholders or by resolution of directors, provided that no amendment may be made by resolution
of directors: (a) to restrict the rights or powers of the shareholders to amend the memorandum of association or the articles
of association; (b) to change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum
of association or the articles of association; (c) in circumstances where the memorandum of association or the articles of association
cannot be amended by the shareholders; and (d) provided that the directors may not amend certain sections of the amended and restated
memorandum and articles of association that would negatively affect existing shareholders.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Appointment and Removal of the Directors</I></B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the amended and restated memorandum and articles of association to be adopted at the special meeting, and subject to
compliance with applicable laws and NASDAQ rules, the board of the Company shall consist of up to seven directors. Initially,
four of the directors shall be appointed by Digital Grid, and three of the directors shall be appointed by a representative
(which we refer to as the minority representative) of certain legacy stockholders of Newegg (which we refer to as the legacy
shareholders), who shall initial be Fred Chang.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Digital
Grid has nominated Mr. Zhitao He, Ms. Yingmei Yang, and Mr. Paul Wu, and Mr. Fred Faching Chang has nominated Mr. Fred Faching
Chang, Mr. Greg Moore and Mr. Anthony Chow to serve as the directors of the post-closing issuer. Digital Grid is currently looking
for an additional candidate to be nominated as an independent director.&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">If the number of common shares or other equity interests (as
defined in the amended and restated memorandum and articles of association) of Company held by the legacy shareholders represents
(i) more than two sevenths (2/7) of the total voting power of all outstanding common shares or other equity interests of the Company,
then the minority representative shall be entitled to appoint and replace three directors, (ii) less than or equal to two sevenths
(2/7) and more than one seventh (1/7) of the total voting power of all outstanding common shares or equity interests of the Company,
then the minority representative shall be entitled to appoint and replace two directors, and (iii) less than or equal to one seventh
(1/7) and more than five percent (5%) of the total voting power of all outstanding common shares or other equity interests of the
Company, then the minority representative shall be entitled to appoint and replace one director; and (iv) less than or equal to
five percent (5%) of the total voting power of all outstanding common shares or other equity interests of the Company, then the
minority representative shall no longer be entitled to appoint any directors.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">If the number of
common shares or other equity interests held by Digital Grid or its affiliates represents (i) (i) more than fifty percent
(50%) of total voting power of all outstanding common shares or other equity interests of the Company, then Digital Grid
shall be entitled to appoint and remove four directors, (ii) less than or equal to fifty percent (50%) and more than two
sevenths (2/7) the total voting power of all outstanding common shares or other equity interests of the Company, then Digital
Grid shall be entitled to appoint and remove three directors, (iii) less than or equal to two sevenths (2/7) and more than
one seventh (1/7) of the total voting power of all outstanding common shares or other equity interests of the Company, then
Digital Grid shall be entitled to appoint and replace two directors, (iv)&nbsp;less than or equal to one seventh (1/7) and
more than five percent (5%) of the total voting power of all outstanding common shares or other equity interests of the
Company, then Digital Grid shall be entitled to appoint and replace one director, and (v) less than or equal to five percent
(5%) of the total voting power of all outstanding common shares or other equity interests of the Company, then Digital Grid
shall no longer be entitled to appoint any directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Of the directors appointed by the minority
representative, one shall be designated by the minority representative to be the primary minority board appointee (which we refer
to as primary minority board appointee) from time to time by delivering written notice thereof to the board. The initial primary
minority board appointee shall be Fred Chang.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
director positions which neither Digital Grid nor the minority representative are entitled to appoint under the amended and restated
memorandum and articles of association shall be appointed by a majority of the remaining directors, or by any other means allowed
under the amended and restated memorandum and articles of association and the BVI Act.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
director or member of a committee of the board or the board of a subsidiary may be removed from his or her position, with cause,
by the majority of the shareholders or the majority of the board; provided that</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)&nbsp;Any
director or member of a committee of the board or the board of a subsidiary that is appointed or nominated by the minority representative
shall be removed from their position upon and only upon, the written request of the minority representative; and</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(ii)
Any director or member of a committee of the board or the board of a subsidiary that is appointed or nominated by Digital
Grid shall be removed from their position upon and only upon, the written request of Digital Grid.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
rights granted to the Digital Grid and the legacy shareholders are additive to and not intended to limit in any way the rights
that the Digital Grid, the legacy shareholders or any of their affiliates may have to appoint, elect or remove our directors under
our amended and restated memorandum and articles of association or laws of the British Virgin Islands.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Requirements
of Board Approval on Certain Matters</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The amended and restated memorandum and articles of association
to be adopted at the special meeting also provides that, as long as the number of common shares held by legacy shareholders represents
more than ten percent (10%) of the equity interest of the Company, the Company or any officer or agent of the Company will not
to take, or permit its subsidiaries to take, certain actions, without the approval of the affirmative vote of not less than a majority
of the number of votes represented by the directors, which majority must include the primary minority board appointee. Such actions
include the following:</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(i)</TD><TD>initiate any liquidation, dissolution, bankruptcy filing
                                         or similar action, recapitalization, restructuring or reorganization of the Company or
                                         any of its subsidiaries;</TD></TR></TABLE>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(ii)</TD><TD>other than to the Company or a wholly-owned subsidiary
                                         thereof, sell, license, transfer or otherwise dispose of (including through merger or
                                         consolidation) all or substantially all of the assets or properties of the Company or
                                         any of its subsidiaries in any transaction or series of related transactions;</TD></TR></TABLE>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in"></P>

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<P STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(iii)</TD><TD>agree to any merger, consolidation or combination of
                                         the Company or any of its subsidiaries, or to a sale of all or substantially all of the
                                         assets of the Company in connection with a company sale (as defined in the amended and restated memorandum
                                         and articles of association);</TD></TR></TABLE>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(iv)</TD><TD>commence or undertake any reorganization (as defined
                                         in the amended and restated memorandum and articles of association);</TD></TR></TABLE>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(v)</TD><TD>issue, directly or indirectly, any equity interest of
                                         the post-closing entity or permit any of the subsidiaries to issue any equity interest other than,
                                         in each case, any excluded issuance (as defined in the amended and restated memorandum
                                         and articles of association);</TD></TR></TABLE>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(vi)</TD><TD>materially alter or fundamentally change the nature of
                                         the business of the Company and its subsidiaries;</TD></TR></TABLE>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(vii)</TD><TD>amend, change, or waive any provision of, the amended and restated memorandum and articles of association of the
                                                                   Company;</TD></TR></TABLE>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(viii)</TD><TD>purchase or otherwise acquire all or any part of the
                                         assets or business of, or equity interests or other evidences of beneficial ownership
                                         of, invest in or participate in any joint venture, partnership or similar arrangement
                                         with, any person (other than the Company or any of its subsidiaries), in each case in
                                         any transaction or series of related transactions involving a commitment in excess of
                                         $10,000,000;</TD></TR></TABLE>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(ix)</TD><TD>other than to the Company or a wholly-owned subsidiary
                                         thereof, sell, license, transfer or otherwise dispose of (including through merger or
                                         consolidation) any assets or properties of the Company or any of its subsidiaries, in
                                         each case in any transaction or series of related transactions involving a commitment
                                         in excess of $10,000,000;</TD></TR></TABLE>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(x)</TD><TD>other than loans to wholly-owned subsidiaries, (A) extend
                                         any credit or make any loans to any person, (B) incur, assume, guarantee, endorse or
                                         otherwise become responsible for indebtedness, or (C) amend, modify or supplement in
                                         any material respect the agreements governing (or otherwise extend or refinance) existing
                                         indebtedness;</TD></TR></TABLE>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(xi)</TD><TD>appoint or remove the Chief Executive Officer of the
                                         Company;</TD></TR></TABLE>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(xii)</TD><TD>enter into any affiliate transactions (as defined in
                                         the amended and restated memorandum and articles of association);</TD></TR></TABLE>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(xiii)</TD><TD>amend, change or waive any of the actions of
                                         the Company described in the <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">amended and
restated memorandum and articles of association </FONT> or the required voting threshold specified therein; and</TD></TR></TABLE>

<P STYLE="font: 8pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(xiv)</TD><TD>agree or commit to do any of the foregoing, or delegate
                                         any of the foregoing to the Company or any of its subsidiaries or any officer or agent
                                         of the Company or subsidiary thereof.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Limitations on
Right to Own Shares</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">BVI law and our amended
and restated memorandum and articles of association impose no limitations on the right of nonresident or foreign owners to hold
or vote our securities. There are no provisions in the amended and restated memorandum and articles of association governing the
ownership threshold above which shareholder ownership must be disclosed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Anti-Takeover Provisions</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Some provisions of our
amended and restated memorandum and articles of association may discourage, delay or prevent a change of control of the Company
or management that shareholders may consider favorable, including provisions that limit the ability of shareholders to requisition
and convene general meetings of shareholders. Our amended and restated memorandum and articles of association allow our shareholders
holding shares representing in aggregate at least thirty percent (30%) of our voting shares to requisition a special meeting of
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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>




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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">However, under BVI law,
our directors may only exercise the rights and powers granted to them under our amended and restated memorandum and articles of
association for a proper purpose and for what they believe in good faith to be in the best interests of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Register of Members</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">The Company is required
to keep a register of members containing (i) the names and addresses of the shareholders, (ii) the number of each class and series
of shares held by each shareholder, (iii) the date on which the name of each shareholder was entered in the register of members,
and (iv) the date on which any person ceased to be a shareholder. A share is deemed to be issued when the name of the shareholder
is entered in the register of members and the entry of the name of a person in the register of members as a holder of a share
is prima facie evidence that legal title in the share vests in that person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Variation of Rights
of Shareholders&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">If at any time the shares
are divided into different classes, the rights attached to any class may only be varied, whether or not the Company is in liquidation,
by a resolution passed at a meeting by a majority of the votes cast by those entitled to vote at a meeting of the holders of the
issued shares in that class.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Meetings</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Any action required or
permitted to be taken by the shareholders may be effected at a duly called annual or special meeting of the shareholders entitled
to vote on such action. An action that may be taken by the shareholders at a meeting (other than the election of directors) may
also be taken by a resolution of shareholders consented to in writing, without the need for any notice, but if any resolution
of shareholders is adopted otherwise than by the unanimous written consent of all shareholders, a copy of such resolution shall
forthwith be sent to all shareholders not consenting to such resolution. All meetings of shareholders (whether annual or special)
will be held on such dates and at such places as may be fixed from time to time by the directors. The Company is not required
to hold an annual general meeting in any calendar year. However, where so determined by the directors of the Company, an annual
general meeting shall be held once in each calendar year at such date and time as may be determined by the directors of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> At any meeting of shareholders, a quorum will be present
if there are one or more shareholders present in person or by proxy representing not less than one third of the issued shares
entitled to vote on the resolutions to be considered at the meeting. The shareholders present at a duly called or held meeting
of shareholders at which a quorum is present may continue to transact business until adjournment notwithstanding the withdrawal
of enough shareholders to leave less than a quorum, if any action (other than adjournment) is approved by at least a majority
of the shares required to constitute a quorum. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">A shareholder may be
represented at a meeting of shareholders by a proxy who may speak and vote on behalf of the shareholder. A shareholder will be
deemed to be present at the meeting if he participates by telephone or other electronic means and all shareholders participating
in the meeting are able to hear each other.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Transfer of Shares</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Subject to the restrictions
and conditions in the amended and restated memorandum and articles of association, any shareholder may transfer all or any of
his or her shares by written instrument of transfer signed by the transferor and containing the name and address of the transferee.
The transfer of a share is effective when the name of the transferee is entered on the register of members of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B><I>Redemption of Shares</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">The Company may purchase,
redeem or otherwise acquire any of its own shares for such consideration as the directors of the Company may determine if the
directors are satisfied, on reasonable grounds, that immediately after the acquisition the value of the Company&rsquo;s assets
will exceed its liabilities and the Company will be able to pay its debts as they fall due. Shares that the Company purchases,
redeems or otherwise acquires may be cancelled or held as treasury shares except to the extent that such shares are in excess
of 50% of the issued shares in which case they shall be cancelled to the extent of such excess but they shall be available for
reissue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: left">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"><A NAME="al_226a"></A>Rights of Certain Principal Shareholders of the Company</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Pre-emptive Rights </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Prior to the merger, Newegg&rsquo;s stockholders have entered
into that certain stockholders agreement, dated March 30, 2017. In connection with the merger, we will assume that agreement and
enter into an amended and restated shareholders agreement with Digital Grid and certain stockholders of Newegg (which we collectively
refer to as the principal shareholders).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Under the amended and restated shareholders agreement, the principal
shareholders will have pre-emptive rights to acquire additional shares when the Company issues or sells additional securities in
the future, except for the &ldquo;excluded issuance&rdquo; or common shares offered pursuant to a registration statement filed
with the SEC. For the purpose of the amended and restated shareholders agreement, &ldquo;excluded issuance&rdquo; means any equity
interests issued as share dividends, or pursuant to share splits, recapitalization or other similar events that do not adversely
affect the proportionate amount of the common shares held by the principal shareholders, and (ii) common shares issuable pursuant
to any stock option or any similar equity incentive plan of the Company approved by the board; and (iii) equity interests issued
pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company provided
that any such issuance shall only be to an entity (or to the equity holders of an entity) which is, itself or through its subsidiaries,
an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the
Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is
issuing equity interests primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company is required to give principal shareholders a notice
stating the price range (or formula by which the price will be determined, which may refer to a future contingent event) and terms
of issuance of new securities and to keep the offer to issue the principal shareholders their pro rata share of such new securities
(as defined below) open until the 15<SUP>th</SUP> <FONT>calendar day</FONT> following the receipt
of such notice. The principal shareholders shall deliver an exercise notice along with payment to exercise their pre-emptive rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In the event that the principal shareholder fails to give an
exercise notice timely, or elects to purchase fewer than all of its pro rata share of such new securities, then the Company shall
sent written notice to any principal shareholder who has elected to purchase all of its pro rata share of such new securities,
who will then have the right, by giving written notice to the Company within two business days upon receiving notice from the Company,
to purchase its pro rata share of such unsubscribed portion, and such right shall continue to apply repeatedly and iteratively
until all of such new securities have been allocated to the principal shareholders or none of the principal shareholders have elected
to participate in such further purchase. If, at the end of such process, there are new securities that have not been subscribed
for by the principal shareholders, the Company may, for a period of time not to exceed <FONT>60
days</FONT>, sell such unsubscribed new securities, on the same times to a third party purchaser. If, however, at the end of such
60-day period, the Company has not consummated a sale of any of such unsubscribed new securities, the Company shall no longer be
permitted to sell such new securities without again complying with these provisions of pre-emptive rights in the amended and restated
shareholders agreement.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: left">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Right of First Refusal</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Pursuant to the amended and restated shareholders
agreement, subject to compliance with applicable laws and NASDAQ&rsquo;s rules, if any principal shareholder receives a bona
fide offer from any person other than its affiliate for any common shares that such principal shareholder received in
connection with the merger, then the Company will have a right of first refusal, but not the obligation, to elect to purchase
all (and not less than all) of such shares, at the same price, and on the same terms and conditions offered by the purchaser.
In the event the Company does not decide to purchase such shares or decides to purchase for less than all of such shares,
then each of the principal shareholders other than the selling principal shareholder shall have a right of first refusal to
elect to purchase all (and not less than all) of its pro rata share of such shares on the same terms and conditions offered
by the purchaser. For the purpose of the amended and restated shareholders agreement, &ldquo;pro rata share&rdquo; means the
percentage which corresponds to the ratio which each selling principal shareholder&rsquo;s percentage interest (which is
calculated by dividing (i) the number of the common shares owned by such principal shareholder, by (ii) total number of the
then outstanding shares of the common shares held by all principal shareholders) bears to the total percentage interests of
all principal shareholders exercising their right of first refusal. In the event that such shares are in exchange for
non-cash consideration, then such right of first refusal shall be exercisable based on the fair market value determined in
good faith by the board of such non-cash consideration. Such right of first refusal may delay or prevent us from raising
funding in the future and may have an adverse impact on the liquidity and market price of our common shares.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Differences Between the Law of Different Jurisdictions </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> We were incorporated under, and are governed by, the laws
of the BVI. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and the
laws application to companies incorporated in Delaware and their shareholders. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 5pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>Director&rsquo;s Fiduciary Duties</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 5pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Under Delaware corporate law, a director of a Delaware corporation
has a fiduciary duty to the corporation and its stockholders. This duty has two components: the duty of care and the duty of loyalty.
The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under
similar circumstances. Under this duty, a director must inform himself of, and disclose to stockholders, all material information
reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably
believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage.
This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its stockholders take
precedence over any interest possessed by a director, officer or controlling stockholder and not shared by the stockholders generally.
In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief
that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a
breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director must
prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 5pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> BVI law provides that every director of a BVI company in
exercising his powers or performing his duties shall act honestly and in good faith and in what the director believes to be in
the best interests of the company. Additionally, the director shall exercise the care, diligence and skill that a reasonable director
would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the position
of the director and his responsibilities. In addition, BVI law provides that a director shall exercise his powers as a director
for a proper purpose and shall not act, or agree to the company acting, in a manner that contravenes the BVI Act or the memorandum
of association or articles of association of the company. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 5pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>Amendment of Governing Documents</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 5pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Under Delaware corporate law, with very limited exceptions,
a vote of the stockholders is required to amend the certificate of incorporation. Under BVI law and our amended and restated memorandum
and articles of association, we may amend the memorandum of association or articles of association by resolution of shareholders
or by resolution of directors, provided that no amendment may be made by resolution of directors: (a) to restrict the rights or
powers of the shareholders to amend the memorandum of association or the articles of association; (b) to change the percentage
of shareholders required to pass a resolution of shareholders to amend the memorandum of association or the articles of association;
(c) in circumstances where the memorandum of association or the articles of association cannot be amended by the shareholders;
and (d) provided that the directors may not amend certain sections of the amended and restated memorandum and articles of association
that would negatively affect existing shareholders. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 5pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>Written Consent of Directors</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 5pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Under Delaware corporate law, directors may act by written
consent only on the basis of a unanimous vote. Under BVI law, directors&rsquo; consents need only a majority of directors signing
to take effect. Under our amended and restated memorandum and articles of association, directors may act by written consents of
all directors. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 5pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>Written Consent of Shareholders</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 5pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Under Delaware corporate law, unless otherwise provided
in the certificate of incorporation, any action to be taken at any annual or special meeting of stockholders of a corporation,
may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that would
be necessary to take such action at a meeting. As permitted by BVI law, shareholders&rsquo; consents need only a majority of shareholders
signing to take effect. Our amended and restated memorandum and articles of association provide that an action that may be taken
by the shareholders at a meeting (other than the election of directors) may also be taken by a resolution of shareholders consented
to in writing, without the need for any notice, but if any resolution of shareholders is adopted otherwise than by the unanimous
written consent of all shareholders, a copy of such resolution shall forthwith be sent to all shareholders not consenting to such
resolution </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 5pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>Shareholder Proposals</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 5pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Under Delaware corporate law, a shareholder has the right
to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing
documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing
documents, but shareholders may be precluded from calling special meetings. BVI law and our amended and restated memorandum and
articles of association provide that our directors shall call a meeting of the shareholders if requested in writing to do so by
shareholders entitled to exercise 30% or more of the voting rights in respect of the matter for which the meeting is requested. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 5pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>Sale of Assets</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 5pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Under Delaware corporate law, a vote of the stockholders
is required to approve the sale of assets only when all or substantially all assets are being sold. In the BVI, shareholder approval
is required when more than 50% of a company&rsquo;s total assets by value are being disposed of or sold. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 5pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>Dissolution; Winding Up</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 5pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Under Delaware corporate law, unless the board of directors
approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the
corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation&rsquo;s
outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority
voting requirement in connection with dissolutions initiated by the board. As permitted by BVI law and our amended and restated
memorandum and articles of association, we may by a resolution of shareholders or by resolution of directors appoint a voluntary
liquidator to undertake the liquidation of the Company. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>Redemption of Shares</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Under Delaware corporate law, any stock may be made subject
to redemption by the corporation at its option or at the option of the holders of such stock provided there remains outstanding
shares with full voting power. Such stock may be made redeemable for cash, property or rights, as specified in the certificate
of incorporation or in the resolution of the board of directors providing for the issue of such stock. As permitted by BVI law
and our amended and restated memorandum and articles of association, we may purchase, redeem or otherwise acquire any of our own
shares for such consideration as our directors may determine if the directors are satisfied, on reasonable grounds, that immediately
after the acquisition the value of our assets will exceed our liabilities and we will be able to pay our debts as they fall due.
Shares that the Company purchases, redeems or otherwise acquires may be cancelled or held as treasury shares except to the extent
that such shares are in excess of 50% of the issued shares in which case they shall be cancelled to the extent of such excess
but they shall be available for reissue. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>Variation of Rights of Shares</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Under Delaware corporate law, a corporation may vary the
rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of
incorporation provides otherwise. As permitted by BVI law and our amended and restated memorandum and articles of association,
if at any time the shares are divided into different classes, the rights attached to any class may only be varied, whether or
not the Company is in liquidation, by a resolution passed at a meeting by a majority of the votes cast by those entitled to vote
at a meeting of the holders of the issued shares in that class. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>&nbsp;</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>Removal of Directors</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Under Delaware corporate law, a director of a corporation
with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote,
unless the certificate provides otherwise. As permitted by BVI law and our amended and restated memorandum and articles of association,
a director or member of a committee of the board or the board of a subsidiary may be removed from his or her position, with cause,
by the majority of the shareholders or the majority of the board; provided that (i) any director or member of a committee of the
board or the board of a subsidiary that is appointed or nominated by the minority representative shall be removed from their position
upon and only upon, the written request of the minority representative; and (ii) any director or member of a committee of the
board or the board of a subsidiary that is appointed or nominated by Digital Grid shall be removed from their position upon and
only upon, the written request of Digital Grid. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>&nbsp;</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>Mergers</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Under Delaware corporate law, one or more constituent corporations
may merge into and become part of another constituent corporation in a process known as a merger. A Delaware corporation may merge
with a foreign corporation as long as the law of the foreign jurisdiction permits such a merger. To effect a merger under Delaware
General Corporation Law &sect;251, an agreement of merger must be properly adopted and the agreement of merger or a certificate
of merger must be filed with the Delaware Secretary of State. In order to be properly adopted, the agreement of merger must be
adopted by the board of directors of each constituent corporation by a resolution or unanimous written consent. In addition, the
agreement of merger generally must be approved at a meeting of stockholders of each constituent corporation by a majority of the
outstanding stock of the corporation entitled to vote, unless the certificate of incorporation provides for a supermajority vote.
In general, the surviving corporation assumes all of the assets and liabilities of the disappearing corporation or corporations
as a result of the merger. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Under the BVI Act, two or more companies may merge or consolidate
in accordance with the statutory provisions. A merger means the merging of two or more constituent companies into one of the constituent
companies, and a consolidation means the uniting of two or more constituent companies into a new company. In order to merger or
consolidate, the directors of each constituent company must approve a written plan of merger or consolidation which must be authorized
by a resolution of shareholders. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Shareholders not otherwise entitled to vote on the merger
or consolidation may still acquire the right to vote if the plan of merger or consolidation contains any provision which, if proposed
as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on the
proposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of
whether they are entitled to vote at the meeting or consent to the written resolution to approve the plan of merger or consolidation. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>&nbsp;</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I></I></B> </P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>&nbsp;</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>Inspection of Books and Records</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Under Delaware corporate law, any shareholder of a corporation
may for any proper purpose inspect or make copies of the corporation&rsquo;s stock ledger, list of shareholders and other books
and records. Holders of our shares have no general right under BVI law to inspect or obtain copies of our list of shareholders
or our corporate records. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>&nbsp;</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>Transactions with Interested Shareholders</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Delaware corporate law contains a business combination statute
applicable to Delaware public corporations whereby, unless the corporation has specifically elected not to be governed by such
statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with
an &ldquo;interested shareholder&rdquo; for three years following the date that such person becomes an interested shareholder.
An interested shareholder generally is a person or group who or that owns or owned 15% or more of the target&rsquo;s outstanding
voting stock within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered
bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things,
prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business
combination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer
of a Delaware public corporation to negotiate the terms of any acquisition transaction with the target&rsquo;s board of directors. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> BVI law has no comparable provision. However, our amended
and restated memorandum and articles of association provide that the Company shall not engage in any business combination with
any interested shareholder for a period of 3 years following the time that such shareholder became an interested shareholder unless:
(a) prior to such time the board of directors of the Company approved either the business combination or the transaction which
resulted in the shareholder becoming an interested shareholder; (b) upon consummation of the transaction which resulted in the
shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of the voting shares of the Company
outstanding at the time the transaction commenced, excluding for the purposes of determining the voting shares outstanding (but
not the outstanding voting shares owned by the interested shareholder) those shares owned (i) by persons who are directors and
also officers and (ii) employee share plans in which employee participants do not have the right to determine confidentially whether
shares held subject to the plan will be tendered in a tender or exchange offer; or (c) at or subsequent to such time the business
combination is approved by the board of directors and authorized at any annual or special meeting of the shareholders by the affirmative
vote of at least 66&frac23;% of the outstanding voting shares which are not owned by the interested shareholder. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>&nbsp;</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <B><I>Cumulative Voting</I></B> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Under Delaware corporate law, cumulative voting for elections
of directors is not permitted unless the company&rsquo;s certificate of incorporation specifically provides for it. Cumulative
voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority
shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder&rsquo;s
voting power with respect to electing such director. There are no prohibitions to cumulative voting under the laws of the BVI,
but our amended and restated memorandum and articles of association do not provide for cumulative voting. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"> COMPARISON OF SHAREHOLDER
RIGHTS </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 5pt"><B>&nbsp;</B></FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The rights of our shareholders are currently governed by
our amended and restated memorandum and articles of association, the BVI Act and the common law of the BVI. The rights of Newegg
stockholders are currently governed by Newegg&rsquo;s certificate of incorporation and bylaws and Delaware law. As a result of
the merger, Newegg stockholders will be entitled to receive merger consideration in our common shares. Following completion of
the merger, the rights of Newegg stockholders who become holders of our common shares in the merger will be governed by our amended
and restated memorandum and articles of association, as amended in accordance with the charter amendment proposal, the BVI Act
and the common law of the BVI. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 5pt"><B>&nbsp;</B></FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The following discussion summarizes the material differences
between the current rights of our shareholders and the current rights of Newegg stockholders. These differences arise from differences
between Delaware law and the laws of the BVI, the governing instruments of the two companies, and the securities laws and regulations
governing the two companies. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 5pt"><B>&nbsp;</B></FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Although it is impracticable to compare all of the aspects
in which Delaware law and the laws of the BVI, and each company&rsquo;s governing instruments, differ with respect to shareholder
rights, the following discussion summarizes certain material differences between them. This summary is not intended to be complete,
and it is qualified in its entirety by reference to Delaware law, the laws of the BVI, our amended and restated memorandum and
articles of association and Newegg&rsquo;s certificate of incorporation and bylaws. In addition, the identification of some of
the differences in the rights of shareholders as material is not intended to indicate that other differences that are equally
important do not exist. We urge you to carefully read this entire proxy statement/prospectus, the relevant provisions of Delaware
law and BVI law and the other documents to which we refer in this proxy statement/prospectus for a more complete understanding
of the differences between the rights of our shareholders and the rights of Newegg stockholders. For a description of the rights
of holders of our common shares, see &ldquo;Description of Securities.&rdquo; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 5pt"><B>&nbsp;</B></FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 52%; border-bottom: black 1.5pt solid; text-align: center; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Newegg</B></FONT> </TD>
    <TD STYLE="vertical-align: bottom; width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; width: 47%; border-bottom: black 1.5pt solid; text-align: center; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Company</B></FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="text-align: center; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>AUTHORIZED
    CAPITAL </B></FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
    is authorized to issue a total number of shares 285,889,968, consisting of (I) 142,000,000 shares of Class A common stock,
    $.001 par value per share, (ii) 59,000,000 shares of Class B common stock, $.001 par value per share and (iii) 84,889,968
    shares of preferred stock, $.001 par value per share, of which 59,000,000 shares are designated Series A preferred stock and
    25,889,968 shares are designated Series AA preferred stock.</FONT> </TD>
    <TD STYLE="vertical-align: bottom; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
    are authorized to issue a maximum 6,250,000 common shares, $0.002731 par value per share, of which 4,736,111 shares are designated
    as Class A common shares and 1,513,889 shares are designated as Class B common shares. Upon filing of the amended and restated
    memorandum and articles of association to be adopted at the special meeting, we will be authorized to issue an unlimited number
    of common shares, $[&nbsp;&nbsp;] par value per share. </FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="text-align: center; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>DIVIDEND
    RIGHTS</B></FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Holders of Newegg&rsquo;s
                                    Preferred Stock: </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Newegg shall not declare, pay or set aside any dividends
        on shares of Newegg&rsquo;s common stock (other than dividends on all then outstanding shares of Newegg&rsquo;s common
        stock payable in shares of Newegg&rsquo;s common stock) in any year unless, the holders of the Series A preferred stock
        and Series AA preferred stock then outstanding shall first receive, or simultaneously receive for such year, a dividend
        on each outstanding share of Series A preferred stock and Series AA preferred stock in an amount at least equal to $.0016
        per share of Series A preferred stock and Series AA preferred stock (subject to appropriate adjustment for stock dividend,
        stock split, reclassification, combination or other similar recapitalization affecting such shares). The foregoing dividend
        shall not be cumulative. </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-size: 7pt">&nbsp;</FONT> </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Newegg shall not declare, pay or set aside any dividends
        on shares of any class or series of capital stock of the Newegg (other than dividends on all then outstanding shares of
        Newegg&rsquo;s common stock payable in shares of Newegg&rsquo;s common stock) unless the holders of the Series A preferred
        stock and Series AA preferred stock then outstanding shall first receive, or simultaneously receive, in addition to any
        dividend payable as described above, a dividend on each outstanding share of Series A preferred stock and Series AA preferred
        stock in an amount at least equal to (i) in the case of a dividend on Newegg&rsquo;s common stock or any class or series
        of capital stock that is convertible into Newegg&rsquo;s common stock, that dividend per share of Series A preferred stock
        and Series AA preferred stock as would equal the product of (A) the dividend payable on each share of such common stock
        or class or series of capital stock determined, if applicable, as if all such shares of such class or series of capital
        stock had been converted into Newegg&rsquo;s common stock and (B) the number of shares of Newegg&rsquo;s common stock
        issuable upon conversion of a share of Series A preferred stock and Series AA preferred stock, in each case calculated
        on the record date for determination of holders entitled to receive such dividend or (ii) in the case of a dividend on
        any class or series of capital stock that is not convertible into Newegg&rsquo;s common stock, at a rate per share of
        Series A preferred stock and Series AA preferred stock determined by dividing the amount of the dividend payable on each
        share of such class or series of capital stock by the original issuance price of such class or series of capital stock
        and multiplying such fraction by an amount equal to $0.02 per share (subject to appropriate adjustment for stock dividend,
        stock split, reclassification, combination or other similar recapitalization affecting such shares). </P></TD>
    <TD STYLE="vertical-align: bottom; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    holders of common shares are entitled to such dividends as may be declared by the directors of the Company at such time and
    of such an amount as the directors think fit if they are satisfied, on reasonable grounds, that immediately after the distribution,
    the value of Company assets exceeds the Company&rsquo;s liabilities and the Company will be able to pay its debts as they
    fall due.</FONT> </TD></TR>
</TABLE>

<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 52%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Holders
                                         of Newegg&rsquo;s Common Stock: </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Subject to the preferences applicable to any series of preferred
stock outstanding at any time, the holders of Class A common stock and the holders of Class B common stock shall be entitled to
share equally, on a per share basis, in such dividends and other distributions cash, property or shares of stock of Newegg as
may be declared by Newegg&rsquo;s board of directors from time to time with respect to Newegg&rsquo;s common stock out of assets
or funds of Newegg legally available therefor; provided, however, that in the event that any such dividend or distribution is
paid in the form of shares of Newegg&rsquo;s common stock or rights to acquire common stock, the holders of Class A common stock
shall receive shares of Class A common stock or rights to acquire shares of Class A common stock, as the case may be, and the
holders of Class B common stock shall receive shares of Class B common stock or rights to acquire shares of Class B common stock,
as the case may be. </P>
</TD>
    <TD STYLE="vertical-align: bottom; font-size: 10pt; width: 1%"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt; width: 47%"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="text-align: center; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>PURCHASE,
    REDEMPTION AND PREEMPTIVE RIGHTS </B></FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Under Delaware corporate
                                    law, Newegg may generally redeem or repurchase shares of its stock unless the Delaware statutory
                                    capital of the corporation is impaired or such redemption or repurchase would impair the capital
                                    of the corporation. According to Newegg&rsquo;s stockholders agreement, certain holders of
                                    Series AA convertible preferred stock, Series A convertible preferred stock and common stock
                                    have pre-emptive rights to purchase any shares of Series AA convertible preferred stock, Series
                                    A convertible preferred stock or common stock that Newegg proposes to issue other than in
                                    connection with an IPO and certain excluded issuances specified in Newegg&rsquo;s stockholders
                                    agreement. </P></TD>
    <TD STYLE="vertical-align: bottom; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The Company may purchase, redeem or otherwise acquire
                                    any of its own shares for such consideration as the directors of the Company may determine if the directors are satisfied, on
                                    reasonable grounds, that immediately after the acquisition the value of the Company&rsquo;s assets will exceed its
                                    liabilities and the Company will be able to pay its debts as they fall due. Certain of our shareholders following the merger
                                    will have certain pre-emptive rights and rights of first refusal as described under &ldquo;Description of
                                    Securities&mdash;Rights of Certain Principal Shareholders of the Company&rdquo; above. </P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="text-align: center; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>INSPECTION
    RIGHTS </B></FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">According
    to Delaware corporate law, any stockholder of Newegg may for any proper purpose inspect or make copies of Newegg&rsquo;s stock
    ledger, list of stockholders and other books and records.</FONT> </TD>
    <TD STYLE="vertical-align: bottom; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Holders
    of our shares have no general right under BVI law to inspect or obtain copies of our list of shareholders or our corporate
    records.</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="text-align: center; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>APPRAISAL
    RIGHTS </B></FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> According to Delaware
                                    corporate law, a holder of shares of any class or series of Newegg has the right, in specified
                                    circumstances, to dissent from a merger or consolidation by demanding payment in cash for
                                    the stockholder&rsquo;s shares equal to the fair value of those shares, as determined by the
                                    Delaware Court of Chancery in an action timely brought by the corporation or a dissenting
                                    stockholder. In addition, appraisal rights are not available to holders of shares of the surviving
                                    corporation in specified mergers that do not require the vote of the stockholders of the surviving
                                    corporation. </P></TD>
    <TD STYLE="vertical-align: bottom; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The BVI Act provides
that any shareholder of a BVI company is entitled to payment of the fair value of his shares upon dissenting from any of the following:
(a) a merger if the company is a constituent company, unless the company is the surviving company and the shareholder continues
to hold the same or similar shares; (b) a consolidation if the company is a constituent company; (c) any sale, transfer, lease,
exchange or other disposition of more than 50% in value of the assets or business of the company if not made in the usual or regular
course of the business carried on by the company but not including: (i) a disposition pursuant to an order of the court having
jurisdiction in the matter, (ii) a disposition for money on terms requiring all or substantially all net proceeds to be distributed
to the shareholders in accordance with their respective interest within one year after the date of disposition, or (iii) a transfer
pursuant to the power of the directors to transfer assets for the protection thereof; (d) a compulsory redemption of 10% or fewer
of the issued shares of the company required by the holders of 90% or more of the shares of the company pursuant to the terms
of the BVI Act; and (e) an arrangement, if permitted by the BVI court. </P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="text-align: center; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>VOTING
    RIGHTS</B></FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Except as otherwise
                                    provided in Newegg&rsquo;s certificate of incorporation or by applicable law, the holders
                                    of shares of Class A common stock and Class B common stock shall at all times vote together
                                    as one class on all matters (including the election of directors) submitted to a vote or for
                                    the consent of the stockholders of Newegg. </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Each Class A common stock is entitled to one (1)
        vote on all matters subject to vote at general meetings of the Company. </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Each Class B common stock is entitled to one (1)
        vote on all matters subject to vote at general meetings of the Company. </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Each Series A preferred stock shall be entitled
        to ten (10) votes for each share of Class A common stock into which such share of Series A preferred stock is convertible
        as of the record date for determining stockholders entitled to vote on such matter. </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Each Series AA preferred stock shall be entitled
        to ten (10) votes for each share of Class A common stock into which such share of Series AA preferred stock is convertible
        as of the record date for determining stockholders entitled to vote on such matter. </P></TD>
    <TD STYLE="vertical-align: bottom; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
    common share is entitled to one (1) vote on all matters subject to vote at general meetings of the Company.</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;<B>VOTE
    ON MERGER, CONSOLIDATIONS OR SALES OF SUBSTANTIALLY ALL ASSETS</B></FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 52%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Under Delaware
                                         corporate law, one or more constituent corporations may merge into and become part of
                                         another constituent corporation in a process known as a merger. A Delaware corporation
                                         may merge with a foreign corporation as long as the law of the foreign jurisdiction permits
                                         such a merger. To effect a merger under Delaware General Corporation Law &sect;251, an
                                         agreement of merger must be properly adopted and the agreement of merger or a certificate
                                         of merger must be filed with the Delaware Secretary of State. In order to be properly
                                         adopted, the agreement of merger must be adopted by the board of directors of each constituent
                                         corporation by a resolution or unanimous written consent. In addition, the agreement
                                         of merger generally must be approved at a meeting of stockholders of each constituent
                                         corporation by a majority of the outstanding stock of the corporation entitled to vote,
                                         unless the certificate of incorporation provides for a supermajority vote. In general,
                                         the surviving corporation assumes all of the assets and liabilities of the disappearing
                                         corporation or corporations as a result of the merger. Under Delaware corporate law,
                                         a vote of the stockholders is required to approve the sale of assets only when all or
                                         substantially all assets are being sold.</P></TD>
    <TD STYLE="vertical-align: bottom; width: 1%"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; width: 47%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Under the
                                         BVI Act, two or more companies may merge or consolidate in accordance with the statutory
                                         provisions. A merger means the merging of two or more constituent companies into one
                                         of the constituent companies, and a consolidation means the uniting of two or more constituent
                                         companies into a new company. In order to merger or consolidate, the directors of each
                                         constituent company must approve a written plan of merger or consolidation which must
                                         be authorized by a resolution of shareholders. </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Shareholders not otherwise entitled to vote on the
        merger or consolidation may still acquire the right to vote if the plan of merger or consolidation contains any provision
        which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote
        as a class or series on the proposed amendment. In any event, all shareholders must be given a copy of the plan of merger
        or consolidation irrespective of whether they are entitled to vote at the meeting or consent to the written resolution
        to approve the plan of merger or consolidation. </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> In the BVI, shareholder approval is required when
        more than 50% of a company&rsquo;s total assets by value are being disposed of or sold. </P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>CHARTER
    AMENDMENTS</B></FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under Delaware
    corporate law, with very limited exceptions, a vote of the stockholders is required to amend the certificate of incorporation.
    In addition, according to Newegg&rsquo;s stockholders agreement, Newegg&rsquo;s certificate of incorporation could not be
    amended without the approval of the affirmative vote of not less than 66 2/3% of the number of votes represented by the Directors
    (excluding any vacancies).</FONT> </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under BVI law
    and our amended and restated memorandum and articles of association, we may amend the memorandum of association or articles
    of association by resolution of shareholders or by resolution of directors, provided that no amendment may be made by resolution
    of directors: (a) to restrict the rights or powers of the shareholders to amend the memorandum of association or the articles
    of association; (b) to change the percentage of shareholders required to pass a resolution of shareholders to amend the memorandum
    of association or the articles of association; (c) in circumstances where the memorandum of association or the articles of
    association cannot be amended by the shareholders; and (d) provided that the directors may not amend certain sections of the
    amended and restated memorandum and articles of association that would negatively affect existing shareholders.</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>SHAREHOLDER
    MEETINGS</B></FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Meetings of stockholders
    may be held within or without the State of Delaware, or by means of remote communication as determined by Newegg&rsquo;s board
    of directors. Annual meeting of Newegg&rsquo;s stockholders shall be held each year on a date and a time designated by the
    board of directors.</FONT> </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">All meetings
    of shareholders (whether annual or special) will be held on such dates and at such places as may be fixed from time to time
    by the directors. The Company is not required to hold an annual general meeting in any calendar year. However, where so determined
    by the directors of the Company, an annual general meeting shall be held once in each calendar year at such date and time
    as may be determined by the directors of the Company.</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>QUORUM</B></FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top"><P STYLE="margin-top: 0; margin-bottom: 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
                                    </FONT>majority of the stock issued and outstanding and entitled to vote at any meeting of
                                    stockholders, the holders of which are present in person or represented by proxy, shall constitute
                                    a quorum for such meeting, except as otherwise provided by Delaware corporate law. </P>

</TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At any meeting
    of shareholders, a quorum will be present if there are one or more shareholders present in person or by proxy representing
    not one-third (33.33%) of the issued shares entitled to vote on the resolutions to be considered at the meeting. The shareholders
    present at a duly called or held meeting of shareholders at which a quorum is present may continue to transact business until
    adjournment notwithstanding the withdrawal of enough shareholders to leave less than a quorum, if any action (other than adjournment)
    is approved by at least a majority of the shares required to constitute a quorum.</FONT> </TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>SHAREHOLDER
    PROPOSALS</B></FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 52%"> According to the bylaws of Newegg, a special meeting of the stockholders could be called by the president or secretary at the requires
in writing of stockholders owning a majority in amount of Newegg&rsquo;s issued and outstanding shares, and entitled to vote, </TD>
    <TD STYLE="vertical-align: bottom; width: 1%"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; width: 47%"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">BVI
    law and our amended and restated memorandum and articles of association provide that our directors shall call a meeting of
    the shareholders if requested in writing to do so by shareholders entitled to exercise 30% or more of the voting rights in
    respect of the matter for which the meeting is requested.</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;<B>ACTION
    BY WRITTEN CONSENT OF THE SHAREHOLDERS</B></FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under Delaware
    corporate law, Newegg&rsquo;s stockholders may act by written consent signed by stockholders having the minimum number of
    votes that would be necessary to take such action at a meeting at which all shares entitled to vote thereon were present and
    voted.</FONT> </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our amended and
    restated memorandum and articles of association provide that an action that may be taken by the shareholders at a meeting
    (other than the election of directors) may also be taken by a resolution of shareholders consented to in writing, without
    the need for any notice, but if any resolution of shareholders is adopted otherwise than by the unanimous written consent
    of all shareholders, a copy of such resolution shall forthwith be sent to all shareholders not consenting to such resolution.</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;<B>ANTI-TAKEOVER
    PROVISIONS AND OTHER SHAREHOLDER PROTECTIONS</B></FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Some provisions
    of Newegg&rsquo;s stockholders agreement may discourage, delay or prevent a change of control of the Company or management
    that shareholders may consider favorable, including provisions that requires an affirmative vote of not less than 66 2/3%
    of the number of votes represented by the directors to take certain corporate action, including agreeing to any merger, consolidation
    or combination of Newegg or any of its subsidiaries.</FONT> </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Some provisions of our amended and restated memorandum
        and articles of association may discourage, delay or prevent a change of control of the Company or management that shareholders
        may consider favorable, including provisions that limit the ability of shareholders to requisition and convene general
        meetings of shareholders. For instance, our amended and restated memorandum and articles of association allow our shareholders
        holding shares representing in aggregate at least thirty percent (30%) of our voting shares to requisition a special meeting
        of 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. </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> However, under BVI law, our directors may only exercise
        the rights and powers granted to them under our amended and restated memorandum and articles of association for a proper
        purpose and for what they believe in good faith to be in the best interests of the Company. </P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ELECTION
    OF DIRECTORS</B></FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant to Newegg&rsquo;s
    stockholders agreement, the board of directors shall consist of either five or seven Directors: (i) in the event the size
    of the board consists of five directors, three shall be nominated by the Minority Representative, and (ii) in the event the
    size of the board consists of seven directors, four of the directors shall be nominated by Digital Grid, and three of the
    directors shall be nominated by the Minority Representative.</FONT> </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Pursuant to the amended and restated memorandum
        and articles of association to be adopted at the special meeting, and subject to compliance with applicable laws and NASDAQ
        rules, the board of the Company shall consist of up to seven directors. Initially, four of the directors shall be appointed
        by Digital Grid, and three of the directors shall be appointed by the minority representative. </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Of the directors appointed by the minority representative,
        one shall be designated by the minority representative to be the primary minority board appointee from time to time by
        delivering written notice thereof to the board. </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Any director positions which neither Digital Grid
        nor the minority representative are entitled to appoint under the amended and restated memorandum and articles of association
        shall be appointed by a majority of the remaining directors, or by any other means allowed under the amended and restated
        memorandum and articles of association and the BVI Act. </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> See &ldquo;Description of Securities&mdash;Amended
        and Restated Memorandum and Articles of Association&mdash;Appointment and Removal of the Directors&rdquo; above for more
        information. </P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="text-align: center"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>REMOVAL
    OF DIRECTORS</B></FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">No director or
    member of a committee of the board or subsidiary board that is nominated by the Minority Representative shall be removed from
    the board, any subsidiary board, or any committee thereof shall be removed without the prior written consent of the Minority
    Representative. No director or board, any subsidiary board, or any committee thereof shall be removed without the prior
    written consent of Digital Grid. The parties to the Newegg&rsquo;s stockholders agreement shall take all reasonable actions
    to remove any director that is nominated by the Minority Representative from the board, any subsidiary board, or any
    committee thereof upon the written request of the Minority Representative. Each of the parties shall take all reasonable
    actions to remove any director that is nominated by Digital Grid from the board, any subsidiary board, or any committee
    thereof upon the written request of Digital Grid.</FONT> </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> A director or member of a committee of the board
        or the board of a subsidiary may be removed from his or her position, with cause, by the majority of the shareholders
        or the majority of the board; provided that </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> (i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
        director or member of a committee of the board or the board of a subsidiary that is appointed or nominated by the minority
        representative shall be removed from their position upon and only upon, the written request of the minority representative;
        and </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> (ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
        director or member of a committee of the board or the board of a subsidiary that is appointed or nominated by Digital
        Grid shall be removed from their position upon and only upon, the written request of Digital Grid. </P></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="text-align: center; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>REQUIREMENTS
    OF BOARD APPROVAL ON CERTAIN MATTERS</B></FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 52%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Neither Newegg nor any officer or agent of the Newegg
        or its subsidiaries shall take, directly or indirectly, any of the following actions without the approval of the affirmative
        vote of not less than 66 2/3% of the number of votes represented by the directors (excluding any vacancies): </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> (i) initiate any liquidation, dissolution, bankruptcy
        filing or similar action, recapitalization, restructuring or reorganization; </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> (ii) other than to Newegg or a wholly-owned subsidiary
        thereof, sell, license, transfer or otherwise dispose of (including through merger or consolidation) all or substantially
        all of the assets or properties of Newegg or any of its subsidiaries in any transaction or series of related transactions; </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> (iii) agree to any merger, consolidation or combination
        of Newegg or any of its subsidiaries, or to a sale of all or substantially all of the assets of Newegg in connection with
        a Company Sale (as defined in Newegg&rsquo;s stockholders agreement); </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> (iv) commence or undertake any reorganization; </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> (v) issue, directly or indirectly, any equity interest
        of Newegg or permit any of the subsidiaries to issue any equity interest other than, in each case, any excluded issuance; </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> (vi) materially alter or fundamentally change the
        nature of the business of Newegg and its subsidiaries; </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> (vii) amend, change, or waive any provision of,
        the certificate of incorporation or bylaws of Newegg (the &ldquo;Organizational Documents&rdquo;); </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> (viii) purchase or otherwise acquire all or any
        part of the assets or business of, or equity interests or other evidences of beneficial ownership of, invest in or participate
        in any joint venture, partnership or similar arrangement with, any person (other than Newegg or any of its subsidiaries),
        in each case in any transaction or series of related transactions involving a commitment in excess of $10,000,000; </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> (ix) other than to Newegg or a wholly-owned subsidiary
        thereof, sell, license, transfer or otherwise dispose of (including through merger or consolidation) any assets or properties
        of Newegg or any of its subsidiaries, in each case in any transaction or series of related transactions involving a commitment
        in excess of $10,000,000; </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> (x) other than loans to wholly-owned subsidiaries,
        (A) extend any credit or make any loans to any person, (B) incur, assume, guarantee, endorse or otherwise become responsible
        for indebtedness, or (C) amend, modify or supplement in any material respect the agreements governing (or otherwise extend
        or refinance) existing indebtedness; </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> (xi) appoint or remove the Chief Executive Officer
        of Newegg; </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> (xii) enter into any affiliate transactions. </P></TD>
    <TD STYLE="vertical-align: bottom; width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; width: 47%; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    amended and restated memorandum and articles of association to be adopted at the special meeting provide that, as long as
    the number of common shares held by legacy shareholders represents more than ten percent (10%) of the equity interest of the
    Company, the Company or any officer or agent of the Company will not to take, or permit its subsidiaries to take, certain
    actions, without the approval of the affirmative vote of not less than a majority of the number of votes represented by the
    directors, which majority must include the primary minority board appointee. See &ldquo;Description of Securities&mdash;Amended
    and Restated Memorandum and Articles of Association&mdash;Requirements of Board Approval on Certain Matters&rdquo; above for
    a description of these matters.</FONT> </TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="text-align: center; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>FILLING
    VACANCIES ON THE BOARD OF DIRECTORS</B></FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
    the event that any director ceases to serve as a member of the board or any committee thereof for any reason, in each case,
    during such member&rsquo;s term of office, the resulting vacancy on the board or committee, as applicable, shall be filled
    by person appointed by Digital Grid or Minority Representative.</FONT> </TD>
    <TD STYLE="vertical-align: bottom; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
    to the rights of Digital Grid and the minority representative to appoint directors, the directors shall have the power from
    time to time and at any time to appoint any person as a director to fill a casual vacancy on the board. Any director appointed
    by the board to fill a casual vacancy shall hold office until the first general meeting of shareholders after his appointment
    and shall resign and be subject to re-election at such meeting.</FONT> </TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="text-align: center; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>INDEMNIFICATION
    OF DIRECTORS AND OFFICERS AND INSURANCE</B></FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: top; font-size: 10pt; width: 52%"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
    provides indemnification for its directors, and the directors or managers of each subsidiary thereof, or each an Indemnitee,
    against, any losses, liabilities and reasonable expenses (including reasonable attorneys&rsquo; fees), or each, a Loss, arising
    from proceedings in which such Indemnitee may be involved, as a party or otherwise, by reason of he or she being a director
    of Newegg, or director or manager of any subsidiary thereof, or by reason of his or her involvement in the management of the
    affairs of Newegg or its subsidiaries, whether or not he or she continues to be such at the time any such Loss is paid or
    incurred. Notwithstanding the foregoing, an Indemnitee shall not be held harmless or indemnified for any Losses arising out
    of the fraud, intentional misconduct, or knowing or reckless breach of Indemnitee&rsquo;s obligations under the Newegg&rsquo;s
    stockholders agreement, or bad faith of such Indemnitee. Without limiting the foregoing, an Indemnitee shall be entitled to
    indemnification by Newegg against reasonable expenses (as incurred), including attorneys&rsquo; fees, incurred by the Indemnitee
    in connection with the defense of any action to which the Indemnitee may be made a party (without regard to the success of
    such defense), to the fullest extent permitted under the provisions of applicable law.</FONT> </TD>
    <TD STYLE="vertical-align: bottom; font-size: 10pt; width: 1%"> &nbsp; </TD>
    <TD STYLE="vertical-align: top; width: 47%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> BVI law does not limit the extent to which a company&rsquo;s
        memorandum and articles of association may provide for indemnification of officers and directors, except to the extent
        any such provision may be held by BVI courts to be contrary to public policy, such as to provide indemnification against
        civil fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association
        permit indemnification of officers and directors against all actions, proceedings, costs, charges, expenses, losses, damages
        or liabilities incurred in connection with the execution of their duties, powers, authorities or discretions as a director
        or officer of the Company, unless such losses or damages arise through the willful neglect or default of such directors
        or officers. </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Our amended and restated memorandum and articles
        of association provide that we shall purchase and maintain insurance in relation to any person who is or was a director,
        officer or liquidator of the Company or any of its subsidiaries, or who at the request of the Company is or was serving
        as a director, officer or liquidator of, or in any other capacity is or was acting for, another body corporate or a partnership,
        joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person
        in that capacity, whether or not the Company has or would have had the power to indemnify the person against the liability
        as provided in our amended and restated memorandum and articles of association. </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Insofar as indemnification for liabilities arising
        under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions,
        we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the
        Securities Act and is therefore unenforceable. </P></TD></TR>
</TABLE>

<P STYLE="margin: 0"> &nbsp; </P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><A NAME="al_227"></A>EXCHANGE
CONTROLS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">There are no material
exchange controls restrictions on payment of dividends, interest or other payments to the holders of our common shares or on the
conduct of our operations in the BVI, where we were incorporated. There are no material BVI laws that impose any material exchange
controls on us or that affect the payment of dividends, interest or other payments to nonresident holders of our common shares.&nbsp;&nbsp;BVI
law and our amended and restated memorandum and articles of association do not impose any material limitations on the right of
non-residents or foreign owners to hold or vote our common shares.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">For a discussion of PRC
exchange controls, see &ldquo;Information About the Company&mdash;Business Overview&mdash;Regulations&mdash;Regulations on Foreign
Currency Exchange.&rdquo;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><A NAME="al_228"></A>SUBMISSION
OF SHAREHOLDER PROPOSALS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Only such business will
be conducted at the special meeting as will have been brought by our board before the special meeting pursuant to the attached
&ldquo;Notice of Special Meeting of Shareholders.&rdquo;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><A NAME="al_229"></A>LEGAL
MATTERS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif"> The validity of the common shares being issued to Newegg
stockholders will be passed upon for us by Conyers Dill &amp; Pearman. Certain U.S. federal income tax consequences relating to
the transactions will be passed upon for us by Potomac Law Group. </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><A NAME="al_230"></A>EXPERTS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">The consolidated financial
statements of the Company included in this proxy statement/prospectus as of and for the year ended December 31, 2019 have been
audited by BDO China Shu Lun Pan Certified Public Accountants LLP, an independent registered public accounting firm, as set forth
in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such
firm as experts in accounting and auditing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">The financial statements
of the Company included in this proxy statement/prospectus as of December 31, 2018 and for the two years ended December 31, 2018
and 2017 have been audited by Centurion ZD CPA &amp; Co., an independent registered public accounting firm, as set forth in their
report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">The consolidated financial
statements of Newegg included in this proxy statement/prospectus as of and for the year ended December 31, 2019 have been audited
by BDO USA, LLP, an independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein,
and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The consolidated financial statements of Newegg as of December
31, 2018, and for each of the years in the two-year period ended December 31, 2018, have been included herein and in the registration
statement of which this proxy statement/prospectus forms a part, include the effects of the adjustment to retrospectively apply
the change in the classification of Newegg&rsquo;s Series A convertible preferred stock and Series AA convertible preferred stock
to temporary equity as described in Note 2(y) to the consolidated financial statements. KPMG LLP, an independent registered public
accounting firm, audited the consolidated financial statements of Newegg as of December 31, 2018, and for each of the years in
the two-year period ended December 31, 2018, before the effects of the retrospective adjustment, which financial statements are
not included herein. BDO USA, LLP, an independent registered public accounting firm, audited the retrospective adjustment. The
consolidated financial statements of Newegg as of December 31, 2018, and for each of the years in the two-year period ended December
31, 2018, have been included herein and in the registration statement of which this proxy statement/prospectus in reliance upon
the reports of (1) KPMG LLP, solely with respect to the consolidated financial statements of Newegg before the effects of the
retrospective adjustment, and (2) BDO USA, LLP, solely with respect to the retrospective adjustment, included herein, and upon
the authority of said firms as experts in accounting and auditing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><A NAME="al_231"></A>ENFORCEMENT
OF CIVIL LIABILITIES</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">We are incorporated under
the laws of the BVI as an exempted company with limited liability because of certain benefits associated with being a BVI corporation,
such as political and economic stability, an effective judicial system, a favorable tax system, the absence of foreign exchange
control or currency restrictions and the availability of professional and support services. However, the BVI has a less developed
body of securities laws that provides significantly less protection to investors as compared to the securities laws of the United
States. In addition, BVI companies may not have standing to sue before the federal courts of the United States.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">All of our assets are
located in the PRC. In addition, our directors and officers are residents of the PRC and all or a substantial portion of their
assets are located outside the United States. As a result, it may be difficult for investors to effect service of process within
the United States upon us or our directors and officers, 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">The courts of the BVI
would recognize as a valid judgment, a final and conclusive judgment in personam obtained in a competent federal or state court
of the United States of America against the Company under which a sum of money is payable (other than a sum of money payable in
respect of multiple damages, taxes or other charges of a like nature or in respect of a fine or other penalty) and would give
a judgment based thereon provided that (a) such courts had proper jurisdiction over the parties subject to such judgment; (b)
such courts did not contravene the rules of natural justice of the BVI; (c) such judgment was not obtained by fraud; (d) the enforcement
of the judgment would not be contrary to the public policy of the BVI; (e) no new admissible evidence relevant to the action is
submitted prior to the rendering of the judgment by the courts of the BVI; and (f) there is due compliance with the correct procedures
under the laws of the BVI.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt">&nbsp;</DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><A NAME="al_232"></A>WHERE
YOU CAN FIND MORE INFORMATION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">The Company has filed
a registration statement on Form&nbsp;F-4,&nbsp;including the exhibits and annexes thereto, with the SEC under the Securities
Act, to register the common shares that Newegg stockholders will receive in connection with the merger. This proxy statement/prospectus,
which is part of the registration statement as well as a proxy statement with respect to the special meeting, does not contain
all of the information set forth in the registration statement and the exhibits to the registration statement, and some parts
have been omitted in accordance with the rules and regulations of the SEC. The Company may also file amendments to the registration
statement. For further information, you are referred to the registration statement and the exhibits and schedules filed as part
of the registration statement. If a document has been filed as an exhibit to the registration statement, you are referred to the
copy of the document that has been filed. Each statement in this proxy statement/prospectus relating to a document filed as an
exhibit is qualified in all respects by the filed exhibit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Newegg has supplied all
information contained in this proxy statement/prospectus relating to Newegg, and the Company has supplied all information contained
in this proxy statement/prospectus relating to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Any person, including
any beneficial owner, to whom this proxy statement/prospectus is delivered may request copies of this proxy statement/prospectus
and any of the annexes incorporated by reference in this document or other information concerning the special meeting, without
charge, by requesting them in writing or by telephone from the Company at the following address and telephone number:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center">Lianluo
Smart Limited</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center">Room
611, 6th Floor, BeiKong Technology Building</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center">No.
10 Baifuquan Road, Changping District</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center">Beijing
102200</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center">People&rsquo;s
Republic of China</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center">Attention:
Corporate Secretary</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center; background-color: white">Telephone:
86-10-89788107</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; background-color: white"><B>THIS
PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE THE SOLICITATION OF A PROXY IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM OR
FROM WHOM IT IS UNLAWFUL TO MAKE SUCH PROXY SOLICITATION IN THAT JURISDICTION. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED
OR INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT/PROSPECTUS TO VOTE YOUR SHARES AT THE SPECIAL MEETING. THE PARTIES HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; background-color: white"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; background-color: white"><B>THIS
PROXY STATEMENT/PROSPECTUS IS DATED [&nbsp;&nbsp;], 2020. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS
IS ACCURATE AS OF ANY DATE OTHER THAN THAT DATE, AND THE MAILING OF THIS PROXY STATEMENT/PROSPECTUS TO SHAREHOLDERS DOES NOT CREATE
ANY IMPLICATION TO THE CONTRARY.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><A NAME="al_233"></A>FINANCIAL
STATEMENTS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0; width: 90%">&nbsp;</TD>
    <TD STYLE="padding: 0; border-bottom: black 1.5pt solid; width: 10%; text-align: center; text-indent: 0"><FONT STYLE="font-size: 10pt"><B>Page
    No.</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD COLSPAN="2" STYLE="padding: 0; text-align: center"><FONT STYLE="font-size: 10pt"><B><U>LIANLUO SMART LIMITED </U></B></FONT></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="padding: 0; width: 90%; text-indent: 0"><A HREF="#b_001"><FONT STYLE="font-size: 10pt"><B>Unaudited Condensed Consolidated
    Financial Statements for the Six Months Ended June 30, 2020 and 2019</B></FONT></A></TD>
    <TD STYLE="padding: 0; width: 10%; text-align: center; text-indent: 0"><FONT STYLE="font-size: 10pt"><B>F-2</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding: 0 0 0 10pt; text-indent: -10pt"><A HREF="#b_002"><FONT STYLE="font-size: 10pt">Condensed Consolidated
    Balance Sheets as of June 30, 2020 and December 31, 2019 (unaudited)</FONT></A></TD>
    <TD STYLE="padding: 0; text-align: center; text-indent: 0"><FONT STYLE="font-size: 10pt">F-3</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="padding: 0 0 0 10pt; text-indent: -10pt"><A HREF="#b_003"><FONT STYLE="font-size: 10pt">Condensed Consolidated
    Statements of Operations and Comprehensive Loss for the Six Months Ended June 30, 2020 and 2019 (unaudited)</FONT></A></TD>
    <TD STYLE="padding: 0; text-align: center; text-indent: 0"><FONT STYLE="font-size: 10pt">F-4</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="padding: 0 0 0 10pt; text-indent: -10pt"><A HREF="#b_004"><FONT STYLE="font-size: 10pt">Condensed Consolidated
    Statements of Changes in Equity for the Six Months Ended June 30, 2020 and 2019 (unaudited)</FONT></A></TD>
    <TD STYLE="padding: 0; vertical-align: top; text-align: center; text-indent: 0"><FONT STYLE="font-size: 10pt">F-5</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="padding: 0 0 0 10pt; text-indent: -10pt"><A HREF="#b_005"><FONT STYLE="font-size: 10pt">Condensed Consolidated
    Statements of Cash Flows for the Six Months Ended June 30, 2020 and 2019 (unaudited)</FONT></A></TD>
    <TD STYLE="padding: 0; text-align: center; text-indent: 0"><FONT STYLE="font-size: 10pt">F-6</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding: 0 0 0 10pt; text-indent: -10pt"><A HREF="#b_006"><FONT STYLE="font-size: 10pt">Notes to Condensed Consolidated
    Financial Statements (unaudited)</FONT></A></TD>
    <TD STYLE="padding: 0; text-align: center; text-indent: 0"><FONT STYLE="font-size: 10pt">F-7</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: center; text-indent: 0">&nbsp;</TD></TR>

<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in"><A HREF="#NEW_002"><FONT STYLE="font-size: 10pt"><B>Consolidated
    Financial Statements for the Years Ended December 31, 2019, 2018 and 2017</B></FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>F-17</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in"><A HREF="#fin_001"><FONT STYLE="font-size: 10pt">Reports of Independent
    Registered Public Accounting Firm</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">F-18</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in"><A HREF="#fin_002"><FONT STYLE="font-size: 10pt">Consolidated Balance
    Sheets as of December 31, 2019 and 2018</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">F-20</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in"><A HREF="#fin_003"><FONT STYLE="font-size: 10pt">Consolidated Statements
    of Operations and Comprehensive Loss for the Years Ended December 31, 2019, 2018 and&nbsp;2017</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">F-21</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; vertical-align: bottom"><A HREF="#fin_004"><FONT STYLE="font-size: 10pt">Consolidated
    Statements of Changes in Equity for the Years Ended December 31, 2019, 2018 and 2017</FONT></A></TD>
    <TD STYLE="text-align: center; vertical-align: top"><FONT STYLE="font-size: 10pt">F-23</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in"><A HREF="#fin_005"><FONT STYLE="font-size: 10pt">Consolidated Statements
    of Cash Flows for the Years Ended December 31, 2019, 2018 and 2017</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">F-24</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in"><A HREF="#fin_006"><FONT STYLE="font-size: 10pt">Notes to Consolidated
    Financial Statements</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">F-26</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD COLSPAN="2" STYLE="text-align: center; padding-left: 0.125in"><FONT STYLE="font-size: 10pt"><B><U>NEWEGG INC.</U></B></FONT></TD></TR>

<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: center; padding-left: 0.125in">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 0.125in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="width: 90%"><A HREF="#finegg_001"><FONT STYLE="font-size: 10pt"><B>Unaudited Consolidated Financial Statements
    for the Six Months Ended June 30, 2020 and 2019</B></FONT></A></TD>
    <TD STYLE="width: 10%; text-align: center"><FONT STYLE="font-size: 10pt"><B>F-51</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><A HREF="#finegg_002"><FONT STYLE="font-size: 10pt">Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019
    (unaudited)</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">F-52</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><A HREF="#finegg_003"><FONT STYLE="font-size: 10pt">Consolidated Statements of Operations for the Six Months Ended June
    30, 2020 and 2019 (unaudited)</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">F-53</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in"><A HREF="#finegg_004"><FONT STYLE="font-size: 10pt">Consolidated
    Statements of Comprehensive Income (Loss) for the Six Months Ended June 30, 2020 and 2019 (unaudited)</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">F-54</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; vertical-align: bottom"><A HREF="#finegg_005"><FONT STYLE="font-size: 10pt">Consolidated
    Statements of Temporary Equity and Equity (Deficit) for the Six Months Ended June 30, 2020 and 2019 (unaudited)</FONT></A></TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">F-55</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><A HREF="#finegg_006"><FONT STYLE="font-size: 10pt">Consolidated Statements of Cash Flows for the Six Months Ended June
    30, 2020 and 2019 (unaudited)</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">F-56</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><A HREF="#finegg_007"><FONT STYLE="font-size: 10pt">Notes to Consolidated Financial Statements (unaudited)</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">F-57</FONT></TD></TR>

<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; width: 90%">&nbsp;</TD>
    <TD STYLE="text-align: center; width: 10%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in"><A HREF="#NEW_003"><FONT STYLE="font-size: 10pt"><B>Consolidated
    Financial Statements for the Years Ended December 31, 2019, 2018 and 2017</B></FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>F-83</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in"><A HREF="#fin1_001"><FONT STYLE="font-size: 10pt">Reports of Independent
    Registered Public Accounting Firm</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">F-84</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in"><A HREF="#fin1_002"><FONT STYLE="font-size: 10pt">Consolidated Balance
    Sheets as of December 31, 2019 and 2018</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">F-86</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in"><A HREF="#fin1_003"><FONT STYLE="font-size: 10pt">Consolidated Statements
    of Operations for the Years Ended December 31, 2019, 2018 and&nbsp;2017</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">F-87</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in"><A HREF="#fin1_004"><FONT STYLE="font-size: 10pt">Consolidated Statements
    of Comprehensive Loss for the Years Ended December 31, 2019, 2018 and&nbsp;2017</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">F-88</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in"><A HREF="#fin1_005"><FONT STYLE="font-size: 10pt">Consolidated Statements
    of Temporary Equity and Equity (Deficit) for the Years Ended December 31, 2019, 2018 and&nbsp;2017</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">F-89</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in"><A HREF="#fin1_006"><FONT STYLE="font-size: 10pt">Consolidated Statements
    of Cash Flows for the Years Ended December 31, 2019, 2018 and 2017</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">F-90</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in"><A HREF="#fin1_007"><FONT STYLE="font-size: 10pt">Notes to Consolidated
    Financial Statements</FONT></A></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">F-91</FONT></TD></TR>
</TABLE>

<P STYLE="text-align: center; margin-top: 0; margin-bottom: 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="text-align: center; margin-top: 0; margin-bottom: 0">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="b_001"></A>LIANLUO SMART LIMITED
AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FOR THE SIX MONTHS ENDED JUNE 30, 2020
AND 2019</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


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    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->2<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="b_002"></A>LIANLUO
SMART LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CONDENSED CONSOLIDATED
BALANCE SHEETS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(UNAUDITED)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(In U.S. dollars, except for shares data)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">June&nbsp;30,</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">December&nbsp;31,</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">ASSETS</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">CURRENT ASSETS:</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Cash and cash equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">6,396,488</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">22,834</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accounts receivable, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">92,236</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">61,779</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Other receivables and prepayments, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,923</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,867</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Advance to suppliers</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,619</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,727</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Inventories, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">812,920</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,085,016</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other taxes receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">290,651</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">337,412</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Marketable equity securities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">286,957</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">143,478</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Total Current Assets</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">7,910,794</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,677,113</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Property and equipment, net</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">272,332</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">656,840</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Total assets</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">8,183,126</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,333,953</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">CURRENT LIABILITIES:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">196,334</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">226,215</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Advances from customers</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">138,157</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">267,365</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Accrued expenses and other current liabilities
    (including rental payable to a related party of $74,776 and $75,834 at June, 30, 2020 and December 31, 2019, respectively)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">904,861</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,530,473</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Due to related parties</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 5pt">- Short-term borrowings and interest payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,029,203</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,208,331</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Warranty obligation</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">717</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">728</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Total Current Liabilities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,269,272</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,233,112</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">OTHER LIABILITIES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Warrants liability</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">689,934</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">389,630</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Total Liabilities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,959,206</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,622,742</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">SHAREHOLDERS&rsquo; (DEFICIT) EQUITY</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in">Common stock &ndash; Class A, par value $ 0.021848: 4,736,111
    shares authorized as of June 30, 2020 and June 30, 2019; 2,210,683 and 836,933 shares issued and outstanding as of June
    30, 2020 and June 30, 2019</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">48,299</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">18,285</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in">Common stock &ndash; Class B, par value $ 0.021848: 1,513,889
    shares authorized as of June 30, 2020 and June 30, 2019; 1,388,888 shares issued and outstanding as of June 30, 2020 and
    June 30, 2019</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,345</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,345</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Additional paid in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">47,995,773</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,833,249</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accumulated deficit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(46,303,194</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(44,607,198</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Accumulated other comprehensive income</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,452,697</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,436,530</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Total shareholders&rsquo; (deficit) equity</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,223,920</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,288,789</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt">Total liabilities and shareholders&rsquo; (deficit) equity</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">8,183,126</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,333,953</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">The accompanying
notes are an integral part of these condensed consolidated financial statements.</P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>


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<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="b_003"></A>LIANLUO
SMART LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(UNAUDITED)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(In U.S. dollars,
except for shares data)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center">For Six Months Ended</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font-weight: bold">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">339,175</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">242,213</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-bottom: 1.5pt">Costs of revenue</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(580,572</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(418,227</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; font-weight: bold; text-align: left">Gross loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(241,397</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(176,014</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Selling expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(43,725</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(556,213</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">General and administrative expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,200,494</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,753,718</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Provision for doubtful accounts</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(28,963</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(43,873</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; font-weight: bold; text-align: left">Operating loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,514,579</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,529,818</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Financial expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(570</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,911</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,682</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Other expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(24,021</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(18,044</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Unrealized loss on securities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">143,478</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(678,304</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Change in fair value of warrants liability</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(300,304</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(99,820</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; font-weight: bold; text-align: left">Loss before provision for income tax</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,695,996</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,312,215</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Provision for income taxes</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt">Net loss attributable to Lianluo Smart Limited</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(1,695,996</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(3,312,215</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Other comprehensive loss:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Foreign currency translation loss</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">16,167</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(123,451</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.25in; font-weight: bold; text-align: left; padding-bottom: 4pt">Comprehensive loss</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(1,679,829</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(3,435,666</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">Loss per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Basic and diluted</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(0.53</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(1.49</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold">Weighted average number of common shares outstanding</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Basic and diluted</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,176,254</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,225,821</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">The accompanying
notes are an integral part of these condensed consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>


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<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="b_004"></A>LIANLUO
SMART LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CONDENSED CONSOLIDATED
STATEMENTS OF CHANGES IN EQUITY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(UNAUDITED)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(In U.S. dollars,
except for shares data)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="25" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six Months Ended June 30,
    2020</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Common Stock</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Additional <BR>
    Paid-in</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Accumulated</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Accumulated <BR>
    Other <BR>
    Comprehensive</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Shares</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Capital</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Deficit</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Income</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; font-weight: bold">Balance as of January 1, 2020</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">2,225,821</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">48,630</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">40,833,249</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(44,607,198</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">2,436,530</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(1,288,789</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Issuance of shares</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,373,750</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,014</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,162,524</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,192,538</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Foreign currency translation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,167</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,167</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Net loss</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,695,996</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,695,996</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-bottom: 1.5pt">Balance as of June 30, 2020</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,599,571</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">78,644</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">47,995,773</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(46,303,194</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,452,697</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,223,920</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="25" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six Months Ended June 30,
    2019</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Common Stock</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Additional <BR>
    Paid-in</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Accumulated</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Accumulated <BR>
    Other <BR>
    Comprehensive</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Shares</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Capital</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Deficit</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Income</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; font-weight: bold">Balance as of January 1, 2019</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">2,225,821</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">48,630</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">40,620,772</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(40,156,204</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">2,603,422</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">3,116,620</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Stock based compensation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">69,177</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">69,177</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Foreign currency translation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(123,451</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(123,451</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Net loss</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,312,215</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,312,215</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-bottom: 1.5pt">Balance as of June 30, 2019</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,225,821</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">48,630</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">40,689,949</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(43,468,419</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,479,971</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(249,869</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">The accompanying
notes are an integral part of these condensed consolidated financial statements.</P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>


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<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="b_005"></A>LIANLUO
SMART LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(UNAUDITED)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(In U.S. dollars)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For Six Months Ended<BR> June
    30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">Cash flows from operating activities</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(1,695,996</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(3,312,215</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Adjustments to reconcile net loss to net cash used in operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Stock-based compensation expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">69,177</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Depreciation and amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">377,731</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">414,224</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">(Gain) Loss on disposal of equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(15,247</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Provision for doubtful accounts</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,963</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">43,873</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Change in warranty obligation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,881</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Provision for inventory obsolescence</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">114</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Change in fair value of warrants liability</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,304</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">99,820</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Unrealized loss on securities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(143,478</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">678,304</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Changes in assets and liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Decrease (Increase) in accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(59,579</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">42,873</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Decrease in advances to suppliers</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">108</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,721</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Decrease in other receivables and prepayments, net - third parties</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,897</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">184,296</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Increase in interest receivables - related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,023</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Decrease (Increase) in inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">272,095</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">231,644</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Increase in operating lease right-of-use assets, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(59,260</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Decrease (Increase) in other taxes receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">46,762</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,642</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Increase in accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(29,881</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27,010</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Increase in interest payable &ndash; related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,908</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Increase in operating lease liabilities, current</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">44,268</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Increase (Decrease) in advances from customers</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(129,208</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">65,999</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Increase (Decrease) in accrued expenses and other current liabilities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(625,612</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">412,154</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Net cash used in operating activities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,662,688</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,042,599</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Cash flows from investing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Proceeds from disposal of equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,302</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Loan to a related party</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(85,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Net cash used in investing activities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(68,698</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Cash flows from financing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Loans from related parties</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">842,609</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">818,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Net proceeds from issuance of common stock</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">7,192,537</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Net cash provided by financing activities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">8,035,146</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">818,500</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Effect of exchange rate fluctuations on cash and cash equivalents</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,196</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(130,964</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Net increase (decrease) in cash and cash equivalents</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,373,654</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(423,761</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Cash and cash equivalents at beginning of period</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">22,834</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">477,309</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Cash and cash equivalents at end of period</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">6,396,488</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">53,548</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Supplemental cash flow information</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Income tax paid</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Interest paid</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Non-cash investing and financing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.25in; text-align: left; padding-bottom: 4pt">Offset short-term borrowings
    - related party against loans to a related party (including accrued interests)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">89,006</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">86,023</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">The accompanying
notes are an integral part of these condensed consolidated financial statements.</P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="b_006"></A>LIANLUO SMART LIMITED
AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO THE CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(UNAUDITED)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(In U.S. dollars)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt"><B>1.</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt"><B>ORGANIZATION AND PRINCIPAL ACTIVITIES</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Lianluo Smart Limited (&ldquo;Lianluo Smart&rdquo;
or the &ldquo;Company&rdquo;) (previously known as &ldquo;Dehaier Medical Systems Limited&rdquo;) was incorporated as an international
business company under the International Business Companies Act, 1984, in the British Virgin Islands on July 22, 2003. On November
21, 2016, the Company changed its name from Dehaier Medical Systems Limited to Lianluo Smart Limited, and its NASDAQ stock ticker
from DHRM to LLIT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Lianluo Smart distributed and provided after-sale
services for medical equipment in China mainly through its wholly-owned subsidiary, Beijing Dehaier Medical Technology Co., Limited
(&ldquo;BDL&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On February 1, 2016, Lianluo Connection Medical
Wearable Device Technology (Beijing) Co., Ltd. (&ldquo;LCL&rdquo;) was formed in Beijing, the PRC, for the business development
in the portable health device market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">During the late 2015, BDL intended to discontinue
part of its product lines among the traditional medical device business, which has been approved by the Board of Resolution on
February 22, 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">As of June 30, 2020, Lianluo Smart owns 100%
of LCL and LCL owns 100% of BDL. As of August 13, 2020, LCL sold BDL to China Mine United Investment Group Co., Ltd. for cash
consideration of RMB0.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Lianluo Smart, through its subsidiaries,
distributes branded, proprietary medical equipment, such as sleep apnea machines and CPR instruments. Standard product registration,
product certification and quality management system have been established; ISO13485 industry standard has also already been passed.
Starting from fiscal 2018, the Company has been providing examination service to hospitals and medical centers through its developed
medical wearable device. Doctors could refer to examination results provided by such device in making diagnosis regarding Obstructive
Sleep Apnea Syndrome (&ldquo;OSAS&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&ldquo;Lianluo Smart&rdquo; or the &ldquo;Company&rdquo;
collectively refer to Lianluo Smart, a BVI registered company, and its subsidiaries, BDL and LCL as of the date hereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt"><B>2.</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt"><B>SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Basis of Presentation</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America
(&ldquo;U.S. GAAP&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">In the opinion of the Company, the accompanying
unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments,
necessary for a fair statement of its financial position, results of operations and comprehensive loss, cash flows and changes
in shareholders&rsquo; equity for the interim periods. The financial statements should be read in conjunction with the audited
consolidated financial statements and notes thereto for the year ended December 31, 2019. The unaudited condensed consolidated
balance sheet at December 31, 2019 was derived from the audited annual financial statements, but does not contain all of the footnote
disclosures from the annual financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The interim results for the six months ended
June 30, 2020 are not necessarily indicative of the results expected for the full fiscal year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Share Combination</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On October 21, 2020, the Company completed
a share combination of its common shares at a ratio of one-for-eight, which decreased the Company&rsquo;s outstanding Class A common
shares from 17,685,475 shares to 2,210,683 shares and the Company&rsquo;s outstanding Class B common shares from 11,111,111 shares
to 1,388,888 shares. This share combination also decreased the Company&rsquo;s authorized shares to 6,250,000 common shares of
par value of US$0.021848 each, of which 4,736,111 are designated as Class A common shares and 1,513,889 are designated as Class
B common shares.</P>

<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Accordingly, all share and per share information has been restated
to retroactively show the effect of this share combination.</P>


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<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>LIANLUO SMART
LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(UNAUDITED)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(In U.S. dollars)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Going Concern</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The accompanying condensed consolidated financial
statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities
and commitments in the normal course of business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company has suffered recurring losses
from operations, this condition has raised substantial doubt about the Company&rsquo;s ability to continue as a going concern.
The company recorded a working capital of $4.64 million as of June 30, 2020. In February and March 2020, the Company obtained
approximately $7.2 million equity financing. Considering equity financing and the cost cutting activities, the Company believes
that the current cash and cash equivalents and the anticipated cash flows from operations will be sufficient to meet the anticipated
working capital requirements and expenditures for the next 12 months. However, the ability to continue as a going concern is dependent
upon the Company&rsquo;s profit generating operations in the future and/or obtaining the necessary financing to meet its obligations
and repay its liabilities arising from normal business operations when they become due.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company&rsquo;s principal sources of
liquidity have been proceeds from issuances of equity securities and loans from related parties. No assurance can be given that
any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company.
Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in
the case of debt financing, or cause substantial dilution for its stock holders, in the case of equity financing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">These consolidated financial statements do
not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities
that might be necessary should the Company be unable to continue as going concern.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Basis of Consolidation</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The unaudited condensed consolidated financial
statements include the accounts of Lianluo Smart and its wholly-owned subsidiaries (collectively, the &ldquo;Company&rdquo;).
All inter-company transactions and balances are eliminated in consolidation. The results of subsidiaries are recorded in the unaudited
condensed consolidated statements of operations and comprehensive loss.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">A subsidiary is an entity in which (i) the
Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint or remove
the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors
or to govern the financial and operating policies of the investee pursuant to a statute or under an agreement among the shareholders
or equity holders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Use of Estimates</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The preparation of the unaudited condensed
consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the unaudited
condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Estimates
are adjusted to reflect actual experience when necessary. Significant accounting estimates reflected in the Company&rsquo;s consolidated
financial statements include revenue recognition, reserve for doubtful accounts, valuation of inventories, impairment testing
of long term assets, warranty obligation, warrants liability, stock-based compensation, useful lives of intangible assets and
property and equipment, realization of deferred tax assets and the discount rate used to determine the present value of lease
payments. Actual results could differ from those estimates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>LIANLUO SMART
LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(UNAUDITED)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(In U.S. dollars)</P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Leases where substantially all the rewards
and risk of assets remain with the leasing company are accounted for as operating leases. Payments made under operating leases
are charged to the consolidated statement of operations on a straight-line basis over the shorter of the lease term or estimated
economic life of the leased property. The majority of the Company&rsquo;s leases were short term (less than 12 months) and the
Company elected the practical expedient not to record right of use of assets for short term leases.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Equity Securities </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company&rsquo;s equity securities represent
equity investments in Guardion Health Sciences, Inc. (&ldquo;GHSI&rdquo;) made in November 2017. The Company holds less than 5%
of the GHSI&rsquo;s total shares. The equity securities were accounted for as non-marketable securities in 2018 on the balance
sheets and as marketable securities in 2019 when GHSI went public in April 5, 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">As of June 30, 2020, the investment was accounted
at fair value with changes recorded through earnings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Fair Value of Financial Instruments</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">ASC Topic 820, &ldquo;Fair Value Measurements
and Disclosures,&rdquo; requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, &ldquo;Financial
Instruments,&rdquo; defines fair value and establishes a three-level valuation hierarchy for disclosures of fair value measurement
that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets
for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values
because of the short period of time between the origination of such instruments and their expected realization and their current
market rate of interest. The three levels of valuation hierarchy are defined as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Level 1 inputs to the valuation methodology are quoted prices (unadjusted)
    for identical assets or liabilities in active markets.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Level 2 inputs to the valuation methodology include quoted prices
    for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly
    or indirectly, for substantially the full term of the financial instrument.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Level 3 inputs to the valuation methodology are unobservable and
    significant to the fair value measurement.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Financial assets and liabilities are classified
in their entirety based on the lowest level of input that is significant to the fair value measurement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The carrying amounts reported in the consolidated
financial statements for current assets and current liabilities approximate fair value due to the short-term nature of these financial
instruments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Investments in listed equity securities were
re-measured on a recurring basis, and are categorized within Level 1 under the fair value hierarchy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The fair value of warrants was determined
using the Black Scholes Model, with Level 3 inputs. Investments in a privately held company for which the Company elected to record
using the measurement alternative were re-measured on a non-recurring basis, and are categorized within Level 3 under the fair
value hierarchy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>LIANLUO SMART
LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(UNAUDITED)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(In U.S. dollars)</P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt"><B>3.</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt"><B>REVENUES</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The following represents the revenues by
categories, all derived from China:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For&nbsp;the&nbsp;six&nbsp;months&nbsp;ended<BR>
    June 30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Categories</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Product sales</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left; text-indent: 14.2pt">Medical Devices</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">295,726</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">59,722</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 14.2pt">Mobile Medicine (sleep apnea diagnostic products)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,240</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">81,550</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">OSAS service (analysis and detection)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">26,209</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">100,941</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Total revenues</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">339,175</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">242,213</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt"><B>4.</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt"><B>ACCOUNTS RECEIVABLE, NET</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Accounts receivable as of June 30, 2020 and
December 31, 2019 consist of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June&nbsp;30,<BR> 2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December&nbsp;31,<BR> 2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Accounts receivable</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">157,082</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">98,195</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Less: reserve for doubtful accounts</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(64,846</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(36,416</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Accounts receivable, net</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">92,236</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">61,779</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">During the six months ended June 30, 2020
and 2019, bad debts were $29,122 and $4,509 respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>LIANLUO SMART
LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(UNAUDITED)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(In U.S. dollars)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt"><B>5.</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt"><B>OTHER RECEIVABLES AND PREPAYMENTS, NET</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Other receivables and prepayments as of June
30, 2020 and December 31, 2019 consist of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June&nbsp;30,<BR> 2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December&nbsp;31,<BR> 2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Rental deposits</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">12,499</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">36,846</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Prepaid expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">58,714</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29,939</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Advances to employees</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">77</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">78</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">71,290</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">66,863</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Less: reserve for doubtful accounts</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(47,367</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(47,996</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Other receivables and prepayments, net</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">23,923</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">18,867</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">During the six months ended June 30, 2020
and 2019, bad debts on other receivables and prepayments were deficit $159 and $39,364 respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt"><B>6.</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt"><B>INVENTORIES</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Inventories as of June 30, 2020 and December
31, 2019 consist of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June&nbsp;30,<BR> 2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December&nbsp;31,<BR> 2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Raw materials</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">23,353</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">25,985</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Work in progress</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">768</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">779</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Finished goods</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">791,162</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,060,615</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Total inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">815,283</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,087,379</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Less: inventory impairment loss</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(2,363</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(2,363</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Inventories, net</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">812,920</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,085,016</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">During the six months ended June 30, 2020
and 2019, write-downs of inventories to lower of cost or net realizable value was $0 and $114, respectively, which were charged
as cost of revenues.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt"><B>7.</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt"><B>PROPERTY AND EQUIPMENT, NET</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Property and equipment as of June 30, 2020
and December 31, 2019 consist of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June&nbsp;30,<BR> 2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December&nbsp;31,<BR> 2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Plant and machinery</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,888,430</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,915,160</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Automobiles</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">135,450</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">137,367</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Office and computer equipment</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">22,372</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">22,689</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Total property and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,046,252</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,075,216</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Less: Accumulated depreciation</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,773,920</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,418,376</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Property and equipment, net</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">272,332</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">656,840</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Depreciation were $377,731 and $414,224 for
the six months ended June 30, 2020 and 2019, respectively. The Company did not record any impairment on its property and equipment
for the six months ended June 30, 2020 and 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


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<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>LIANLUO SMART
LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(UNAUDITED)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(In U.S. dollars)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt"><B>8.</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt"><B>COMMITMENTS AND CONTINGENCIES</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Leases</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The lease commitments are for office premises
which are classified as operating leases. These non-cancelable leases have lease terms expiring through November 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Lease expense for the six months ended June
30, 2020 and 2019 was $45,298 and $177,464 respectively. The lease commitment is $17,753 with a contract maturity date at March
19, 2021. All of Company&rsquo;s leases were short term (less than 12 months) and the Company elected the practical expedient
not to record right of use of assets related to short term leases.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Employment Contracts</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Under the PRC labor law, all employees have
signed employment contracts with the Company. Management employees have employment contracts with terms up to three years and
non-management employees have either a three-year employment contract renewable on an annual basis or non-fixed term employment
contract.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Contingency</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company is periodically the subject of
various pending or threatened legal actions and claims arising out of its operations in the normal course of business. In the
opinion of management of the Company, adequate provision has been made in the Company&rsquo;s financial statements at June 30,
2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Litigation</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">From time to time, the Company may become
involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject
to inherent uncertainties, and an adverse result in these, or other matters, may arise from time to time that may harm our business.
Other than the legal proceeding set forth below, the Company is currently not aware of any such legal proceedings or claims that
the Company believe will have an adverse effect on our business, financial condition or operating results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">In 2019, Beijing Dehaier and Lianluo Connection
terminated employment of over 50 employees due to business restructuring. As of December 31, 2019, 34 of these laid-off employees
filed complaints with Beijing Changping District Employment Dispute Arbitration Commission and Beijing Shijingshan District Employment
Dispute Arbitration Commission, claiming that Beijing Dehaier and Lianluo Connection failed to pay them, among others, certain
salaries, overtime fees and compensations. As of December 31, 2019, the Arbitration Commissions issued arbitral awards with respect
to 30 of the 34 employees; Beijing Dehaier and Lianluo Connection had paid off 23 of the 30 employees who had applied for enforcement
of the arbitral awards and intend to pay the additional seven employees an aggregate of approximately RMB 310,000 (approximately
$44,423) according to entered arbitral awards. As regards the total expenses pertaining to this lay-off, the Company recorded
liabilities of RMB979,716 (approximately $140,393) in employment termination compensations and RMB2.99 million (approximately
$428,467) in unpaid salaries in 2019, of which the Company had paid off RMB3,346,453 (approximately $475,866) as of June 30, 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">In 2020, Beijing Dehaier and Lianluo Connection
have terminated the employment of additional 25 employees due to the business downturn. Most of these former employees filed complaints
with Beijing Changping District Employment Dispute Arbitration Commission and Beijing Shijingshan District Employment Dispute
Arbitration Commission, respectively, claiming that Beijing Dehaier and Lianluo Connection failed to pay them, among others, certain
salaries, overtime fees and compensations upon terminations. As of June 30, 2020, Beijing Dehaier and Lianluo Connection have
entered into settlement agreements with 15 of these former employees and settled disputes through negotiations with the rest of
these employees. The total settlement amount for the 25 employees was RMB3,332,405 (approximately $473,868) and about RMB1,493,225
(approximately $212,337) has been paid off.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


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<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>LIANLUO SMART
LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(UNAUDITED)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(In U.S. dollars)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On May 9, 2019, Tianjin Wuqing Bohai Printing
Co., Ltd., or Wuqing Bohai, filed an arbitration application with Beijing Arbitration Commission against Beijing Dehaier, claiming
that Beijing Dehaier failed to pay for goods in accordance with purchase contracts entered into with Wuqing Bohai in 2017 and
2018 and requested Beijing Dehaier to pay Wuqing Bohai an amount of RMB119,770 (approximately $17,450), plus RMB10,000 (approximately
$1,457) to cover the expenses&nbsp;of&nbsp;keeping goods that Beijing Dehaier failed to accept. On June 5, 2019, Beijing Dehaier
submitted an answer to compliant, noting that it had not received some of the goods under the contracts and Wuqing Bohai failed
to provide invoices for some of the goods allegedly received by Beijing Dehaier. Beijing Dehaier submitted that it should only
be responsible for the purchase value of RMB48,450 (approximately $7,059). On March 6, 2020, the Beijing Arbitration Commission
entered an award, ordering that Beijing Dehaier pay Wuqing Bohai the disputed amount of RMB119,770 (approximately $17,203) and
an arbitration fee of RMB10,443 (approximately $1,500) by March 24, 2020 and dismissed other claims of Wuqing Bohai. In May 2020,
Beijing Dehaier paid off the disputed amount and the arbitration fee under the case.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt"><B>9.</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt"><B>LOSS PER SHARE</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The following is a reconciliation of the
basic and diluted loss per share computation for the six months ended June 30, 2020 and 2019:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six months ended <BR>
    June 30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Net loss attributable to the Company&rsquo;s common shareholders</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(1,695,996</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(3,312,215</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Weighted average shares outstanding &ndash; Basic and diluted</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,176,254</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,225,821</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Loss per share &ndash; Basic and diluted</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(0.53</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(1.49</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">For the six months ended June 30, 2020 and
2019, all the outstanding warrants and options were anti-dilutive.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt"><B>10.</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt"><B>RELATED PARTY TRANSACTIONS AND BALANCES</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">In addition to the transactions and balances
disclosed elsewhere in these financial statements, the Company had the following material related party transactions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(1)</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">On
                                         July 1, 2018, the Company leased office premises from Hangzhou Lianluo Interactive Information
                                         Technology Co., Ltd. (&ldquo;HLI&rdquo;), our major shareholder, for a period of 1 year,
                                         with an annual rental of $84,447 (RMB580,788). Rental payments charged as expenses in
                                         the six months ended June 30, 2020 and 2019 were $0 and $39,091 respectively. As of June
                                         30, 2020 and December 31, 2019, the Company reported an outstanding rental payable of
                                         $74,776 and $75,834 to HLI.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(2)</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">On
                                         February 3 and April 18, 2019, Digital Grid (Hong Kong) Technology Co. Ltd (&ldquo;Digital
                                         Grid&rdquo;), one of HLI&rsquo;s subsidiaries, borrowed from the Company loans of principal
                                         amounts of $60,000 and $25,000 for a term of 12 months.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">On May 20, 2019 the Company borrowed
$90,000 from Digital Grid for a term of 12 months.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">As of June 30, 2019, the Company
owed a net principal of $4,345 to Digital Grid.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">From November to December 2019,
the Company borrowed $28,000 from Digital Grid, for a term of 12 months.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 16.5pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">As of June 30, 2020, the Company
owed a net principal of $33,000 to Digital Grid.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>LIANLUO SMART
LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(UNAUDITED)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(In U.S. dollars)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(3)</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">During
                                         2019, the Company borrowed $942,500 from HLI, repaid $0; the loans are non-interest bearing.
                                         In addition, the above loans have been extended, interest-free and without specific repayment
                                         date, which is based upon both parties&rsquo; agreement as of the date of this report.
                                         As of June 30, 2020 and 2019, the loan balances were $918,450 and $737,040.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 15pt; text-align: left; text-indent: -15pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">(4)</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">During
                                         the six months of 2020 and 2019, the Company borrowed $842,609 and nil from Mr. Ping
                                         Chen, its previous CEO, free of interest to fund its operation, respectively. The balances
                                         were $1,077,753 and nil as of the six months ended June 30, 2020 and 2019.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt"><B>11.</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt"><B>CONCENTRATIONS</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Major Customers</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">For the six months ended June 30, 2020, one
customer accounted for approximately 87% of the Company&rsquo;s revenues. For the six months ended June 30, 2019, two customers
each accounted for approximately 33% and 24%, respectively, of the Company&rsquo;s revenues.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">No other customer accounted for more than
10% of the Company&rsquo;s revenues for the six months ended June 30, 2020 and 2019.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Major Suppliers</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">For the six months ended June 30, 2020 and
2019, the sole supplier accounted for 100% of the Company&rsquo;s purchases.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt"><B>12.</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt"><B>EQUITY</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Stock Option Plan</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Under the employee stock option plan, the
Company&rsquo;s stock options generally expire ten years from the date of grant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following is a summary of the option activity:&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1.5pt solid">Stock options</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Shares</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted <BR>
    average <BR> exercise <BR>
    price</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Aggregate<BR>
                                         intrinsic<BR>
                                         value<SUP>(1)</SUP></B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%">Outstanding as of December 31, 2019</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">99,358</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">19.20</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Forfeited</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(26,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">Exercised</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">Outstanding as of June 30, 2020</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">73,358</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">21.12</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt">Exercisable as of June 30, 2020</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">73,358</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">21.12</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt"><SUP>(1)</SUP></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">The
                                         intrinsic value of the stock options at June 30, 2020 is the amount by which the market
                                         value of the Company&rsquo;s common stock of $5.52 as of June 30, 2020 exceeds the exercise
                                         price of the options.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">As of June 30, 2020, all outstanding options
have been vested. For the six months ended June 30, 2020 and 2019, the Company recognized $0 and $69,177 respectively, as compensation
expense under its stock option plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>LIANLUO SMART
LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(UNAUDITED)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(In U.S. dollars)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt"><B>13.</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt"><B>WARRANTS</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On April 28, 2016, the Company signed Share
Purchase Agreement (&ldquo;SPA&rdquo;) with HLI. In this SPA, HLI received warrants to acquire from the Company 125,000 Class
B common shares at exercise price of $17.60 per share and exercisable by HLI at any time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">There was a total of 125,000 warrants to
purchase Class B common shares issued and outstanding as of June 30, 2020 and December 31, 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The fair value of the outstanding warrants
was calculated using the Black Scholes Model with the following assumptions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">June 30,<BR> 2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December&nbsp;31,<BR> 2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%">Market price per share (USD/share)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">5.52</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">3.12</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Exercise price (USD/share)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17.60</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17.60</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Risk free rate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.35</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.81</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Dividend yield</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Expected term/Contractual life (years)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.8</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.3</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Expected volatility</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">334.28</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">279.93</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The following is a reconciliation of the
beginning and ending balances of warrants liability measured at fair value on a recurring basis using Level 3 inputs:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Six months ended <BR> June
    30,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Beginning balance</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">389,630</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,129,246</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Fair value change of the issued warrants included in earnings</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">300,304</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">99,821</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Ending balance</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">689,934</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,229,067</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The following is a summary of the warrants
activity:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted <BR> Average <BR>
    Exercise <BR>
    Price</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted <BR>
    Average<BR> Remaining <BR> Contractual <BR>
    Life<BR> (Years)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%">Outstanding as of January 1, 2020</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">125,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">17.60</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Granted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Forfeited</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Exercised</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Redeemed</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Outstanding as of June 30, 2020</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">125,000</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">$</TD><TD STYLE="padding-bottom: 4pt; text-align: right">17.60</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">From February to March 2020, the Company
consummated three registered direct offerings of 1,373,750 Class A Common Shares and concurrent private placements of warrants
to purchase up to 1,373,750 Class A Common Shares with three investors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>LIANLUO SMART
LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NOTES TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(UNAUDITED)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(In U.S. dollars)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">As of the date hereof, there are outstanding
warrants to purchase an aggregate of 1,373,750 Class A common shares, exercisable for five and one-half years since the respective
date of issuance and subject to full ratchet anti-dilution protection. The table below shows the exercise price, floor price,
issuance date and expiration date for these warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 67%"><FONT STYLE="font-size: 10pt">Amount of Underlying Class A Common Shares</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 10pt">323,750</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 10pt">437,500</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 10pt">612,500</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Exercise price</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">4.9912</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">5.60</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">5.60</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Floor Price</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">N/A</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">1.3608</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">1.44</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Expiration Date</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="white-space: nowrap; text-align: right"><FONT STYLE="font-size: 10pt">August 14, 2025</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="white-space: nowrap; text-align: right"><FONT STYLE="font-size: 10pt">August 25, 2025</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="white-space: nowrap; text-align: right"><FONT STYLE="font-size: 10pt">September 2, 2025</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Issuance Date</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="white-space: nowrap; text-align: right"><FONT STYLE="font-size: 10pt">February 14, 2020</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="white-space: nowrap; text-align: right"><FONT STYLE="font-size: 10pt">February 25, 2020</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">March 2, 2020</FONT></TD>
    <TD>&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In accordance with ASC 815-40, the Company accounted for the
Warrants as equity instruments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt"><B>14.</B></FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt"><B>SUBSEQUENT EVENTS</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">1) Debt Extension and Debt Repayment</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company has a borrowing of $918,450 due
to HLI as of June 30, 2020. The loans due at July 18, July 21, and August 6, 2020, totaling $211,950, were extended, interest-free
and without specific repayment date, which is based upon both parties&rsquo; agreement as of the date of this report.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">During 2019, DGHKT borrowed from the Company
loans of principal amounts of $85,000 for a term of 12 months, and the Company borrowed $118,000 from DGHKT for a term of 12 months.
On July 14, 2020, the Company repaid a net principal of $33,000 to DGHKT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On August 17, 2020, the outstanding amount
of $42,000 in service charge payable to HLI&rsquo;s subsidiary was repaid by the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">2) Change of CEO and Directors</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On August 12, 2020, Mr. Zhitao He resigned
from his positions as Chief Executive Officer and director of the Company. Mr. He&rsquo;s resignation was not a result of any
disagreement with the Company on any matter relating to the Company&rsquo;s operations, policies or practices. On August 25, 2020,
Mr. Bin Lin was appointed as Chief Executive Officer, a director and Chairman of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">3) Disposition Transaction</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On August 13, 2020, Lianluo Connection entered
into a Share Transfer Agreement (the &ldquo;Agreement&rdquo;) with China Mine United Investment Group Co., Ltd. (&ldquo;China
Mine&rdquo;), pursuant to which Lianluo Connection transfers its 100% equity interests in its wholly-owned PRC subsidiary Beijing
Dehaier to China Mine for cash consideration of RMB 0. In exchange for all of the equity interests in Beijing Dehaier, China Mine
agrees to assume all liabilities of Beijing Dehaier.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="NEW_002"></A>LIANLUO
SMART LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>FOR THE YEARS
ENDED DECEMBER 31, 2019, 2018 AND 2017</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="fin_001"></A>REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To the Shareholders and Board of Directors of Lianluo Smart
Limited,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Beijing, China</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Opinion on the Consolidated Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">We have audited the accompanying consolidated
balance sheet of Lianluo Smart Limited and subsidiaries (the &ldquo;Company&rdquo;) as of December 31, 2019, and the related consolidated
statements of operations and comprehensive loss, changes in equity and cash flows for the year ended December 31, 2019, and the
related notes (collectively referred to as the &ldquo;consolidated financial statements&rdquo;). In our opinion, the consolidated
financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019,
and the results of its operations and its cash flows for the period ended December 31, 2019, in conformity with U.S. generally
accepted accounting principles.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Going Concern</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The accompanying consolidated financial statements
have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2, the Company has experienced
negative operating cash flows. These matters raise substantial doubt about the Company&rsquo;s ability to continue as a going
concern. Management&rsquo;s plans in regard to these matters are also described in Note 2 to the consolidated financial statements.
These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Basis for Opinion</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">These consolidated financial statements are
the responsibility of the Company&rsquo;s management. Our responsibility is to express an opinion on the Company&rsquo;s consolidated
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (&ldquo;PCAOB&rdquo;) and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">We conducted our audit in accordance with
the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required
to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are
required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion
on the effectiveness of the Company&rsquo;s internal control over financial reporting. Accordingly, we express no such opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Our audit included performing procedures
to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe
that our audit provides a reasonable basis for our opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%; border-bottom: black 1.5pt solid"><FONT STYLE="font-size: 10pt">/s/ BDO China Shu Lun Pan Certified
    Public Accountants LLP</FONT></TD>
    <TD STYLE="width: 60%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;BDO China Shu Lun Pan Certified Public Accountants
        LLP</P></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt">We have served as the Company&rsquo;s auditor since 2020.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Beijing, China</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt">May 15, 2020, except for share combination included in Note 3, as to which
the date is October 23, 2020</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To the Shareholders and Board of Directors of Lianluo Smart
Limited</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Opinion on the Consolidated Financial
Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">We have audited the accompanying consolidated
balance sheet of Lianluo Smart Limited and subsidiaries (the &ldquo;Company&rdquo;) as of December 31, 2018, and the related consolidated
statements of operations and comprehensive loss, changes in equity and cash flows for the two years ended December 31, 2018 and
2017, and the related notes (collectively referred to as the &ldquo;consolidated financial statements&rdquo;). In our opinion,
the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December
31, 2018, and the results of its operations and its cash flows for the two years ended December 31, 2018 and 2017, in conformity
with U.S. generally accepted accounting principles.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>Basis for Opinion</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">These consolidated financial statements are
the responsibility of the Company&rsquo;s management. Our responsibility is to express an opinion on the Company&rsquo;s consolidated
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (&ldquo;PCAOB&rdquo;) and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">We conducted our audits in accordance with
the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required
to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are
required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion
on the effectiveness of the Company&rsquo;s internal control over financial reporting. Accordingly, we express no such opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Our audits included performing procedures
to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe
that our audits provide a reasonable basis for our opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%; border-bottom: black 1.5pt solid"><FONT STYLE="font-size: 10pt">/s/ Centurion ZD CPA &amp; Co.</FONT></TD>
    <TD STYLE="width: 60%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Centurion ZD CPA &amp; Co.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(successor to Centurion ZD CPA Limited)</P></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Hong Kong, China</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt">May 15, 2019, except for share combination included in Note 3, as to which
the date is October 23, 2020</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="fin_002"></A>LIANLUO SMART
LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSOLIDATED BALANCE SHEETS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(In U.S. dollars, except for shares data)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the Years Ended<BR>
    December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">ASSETS</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">CURRENT ASSETS:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Cash and cash equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">22,834</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">477,309</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accounts receivable, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">61,779</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">92,149</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Other receivables and prepayments, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,867</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">267,781</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Advances to suppliers, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,727</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">152,751</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Inventories, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,085,016</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,349,102</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other taxes receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">337,412</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">374,270</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Marketable equity securities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">143,478</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Total Current Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,677,113</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,713,362</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Property and equipment, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">656,840</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,261,493</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Construction in progress</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">223,772</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Non-marketable equity securities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,500,043</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt">Total Assets</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,333,953</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">5,698,670</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">LIABILITIES AND EQUITY</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">CURRENT LIABILITIES:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">226,215</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">234,449</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Advances from customers</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">267,365</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">232,565</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Accrued expenses and other current liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,530,473</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">977,119</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Warranty obligation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">728</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,671</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Due to related parties-short-term borrowings</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,208,331</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Total Current Liabilities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,233,112</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,452,804</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">OTHER LIABILITIES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Warrants liability</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">389,630</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,129,246</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Total Liabilities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,622,742</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,582,050</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Commitments and Contingency</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">SHAREHOLDERS&rsquo; EQUITY</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">Common stock &ndash; Class A, par value $ 0.021848: 4,736,111
    shares authorized as of December 31, 2019 and December 31, 2018; 836,933 shares issued and outstanding as of December 31,
    2019 and December 31, 2018</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,285</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,285</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">Common stock &ndash; Class B, par value $ 0.021848: 1,513,889
    shares authorized as of December 31, 2019 and December 31, 2018; 1,388,888 shares issued and outstanding as of December 31,
    2019 and December 31, 2018</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,345</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,345</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Additional paid-in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,833,249</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,620,772</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Accumulated deficit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(44,607,198</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(40,156,204</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Accumulated other comprehensive income</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,436,530</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,603,422</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Total Equity</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,288,789</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,116,620</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt">Total liabilities and equity</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,333,953</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">5,698,670</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral
part of these consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="fin_003"></A>LIANLUO SMART
LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(In U.S. dollars, except for shares data)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the Years Ended December
    31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; font-weight: bold">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">383,458</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">559,386</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">882,011</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-bottom: 1.5pt">Costs of revenue</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(743,744</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(757,901</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,655,970</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Gross loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(360,286</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(198,515</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(773,959</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Service income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">56,030</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Service expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,289</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Selling expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(835,270</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,082,829</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,170,378</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">General and administrative expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,593,808</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,675,465</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,192,030</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">(Provision for) recovery from doubtful accounts</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13,011</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(22,229</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,608</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Impairment loss for intangible assets</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,281,779</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Operating loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,802,375</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9,260,817</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,058,018</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Financial (expenses) income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">557</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(37,899</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">57,077</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Other income (expense), net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(32,227</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(211,151</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">94,256</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Unrealized loss on marketable securities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,356,565</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Change in fair value of warrants liability</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">739,616</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">599,865</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(229,749</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Loss before provision for income tax and non-controlling interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,450,994</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,910,002</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,136,434</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Income tax benefit</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Net loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,450,994</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,910,002</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,136,434</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Less: net loss attributable to non-controlling interest</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt">Net loss attributable to Lianluo Smart Limited</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(4,450,994</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(8,910,002</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(5,136,434</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Other comprehensive (loss) income:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Foreign currency translation (loss) gain</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(166,892</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(515,477</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">380,077</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Comprehensive loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,617,886</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9,425,479</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,756,357</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">-less comprehensive loss attributable to non-controlling interest</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt">Comprehensive loss attributable to Lianluo Smart Limited</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(4,617,886</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(9,425,479</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(4,756,357</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral
part of these consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LIANLUO SMART LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS (Continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(In U.S. dollars, except for shares data)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the Years Ended December
    31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">Weighted average number of common shares used in computation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left; padding-bottom: 4pt">-Basic and diluted</TD><TD STYLE="width: 1%; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 4pt double; text-align: right">2,225,821</TD><TD STYLE="width: 1%; padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 4pt double; text-align: right">2,202,176</TD><TD STYLE="width: 1%; padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 4pt double; text-align: right">2,164,071</TD><TD STYLE="width: 1%; padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold">Net loss per share of common stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">-Basic and diluted</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(2.00</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(4.05</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(2.37</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral
part of these consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="fin_004"></A>LIANLUO SMART
LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSOLIDATED STATEMENTS OF CHANGES IN
EQUITY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(In U.S. dollars, except for shares data)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Common
                                         Stock</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Class A</B></P></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Common
                                         Stock</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Class B</B></P></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Additional Paid-in</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Accumulated</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Accumulated Other Comprehensive</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Shares</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Amount</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Shares</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Amount</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Capital</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Deficit</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Income</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 20%; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt"><B>Balance as of January 1, 2017</B></FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 10pt">775,183</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 10pt">16,936</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 10pt">1,388,888</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 10pt">30,345</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 10pt">37,261,366</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 10pt">(26,109,768</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 10pt">2,738,822</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 10pt">13,937,701</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">Net proceeds from issuance of common stock,
    net of issuance costs</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">1,492,538</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">1,492,538</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">Stock based compensation</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">479,233</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">479,233</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">Foreign currency translation</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">380,077</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">380,077</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">Net loss</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(5,136,434</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(5,136,434</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt; text-indent: -9pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt"><B>Balance as of December 31, 2017</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">775,183</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">16,936</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">1,388,888</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">30,345</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">39,233,137</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(31,246,202</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">3,118,899</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">11,153,115</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">Issuance of shares upon excise of share-based
    awards</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">2,375</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">52</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">17,799</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">17,851</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">Issuance of shares to non-employees</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">59,375</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">1,297</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">1,122,702</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">1,123,999</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">Stock based compensation to employees</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">247,134</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">247,134</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">Foreign currency translation</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(515,477</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(515,477</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">Net loss</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;-</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(8,910,002</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">(8,910,002</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 9pt; text-indent: -9pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt"><B>Balance as of December 31, 2018</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">836,933</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">18,285</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">1,388,888</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">30,345</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">40,620,772</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(40,156,204</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">2,603,422</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">3,116,620</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">Stock based compensation</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">69,176</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">69,176</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">Exemption of borrowings from related party</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">143,301</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">143,301</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">Foreign currency translation</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(166,892</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(166,892</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">Net loss</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(4,450,994</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">(4,450,994</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt"><B>Balance as of December
    31, 2019</B></FONT></TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">836,933</FONT></TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 4.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">18,285</FONT></TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">1,388,888</FONT></TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 4.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">30,345</FONT></TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 4.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">40,833,249</FONT></TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 4.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">(44,607,198</FONT></TD>
    <TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 10pt">)</FONT></TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 4.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">2,436,530</FONT></TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double"><FONT STYLE="font-size: 10pt">$</FONT></TD>
    <TD STYLE="border-bottom: black 4.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">(1,288,789</FONT></TD>
    <TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 10pt">)</FONT></TD></TR>
</TABLE>

<P STYLE="text-align: center; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">The accompanying
notes are an integral part of these consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="fin_005"></A>LIANLUO SMART
LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSOLIDATED STATEMENTS OF CASH FLOWS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(In U.S. dollars)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the Years Ended December
    31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; font-weight: bold">Cash flows from operating activities</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; width: 64%; text-align: left">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(4,450,994</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(8,910,002</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(5,136,434</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Adjustments to reconcile net loss to net cash used
    in operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Stock-based compensation to employees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">69,176</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">247,134</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">479,233</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Stock-based compensation to non-employees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">179,112</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">944,887</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Depreciation and amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">778,117</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">827,630</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,328,403</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Loss from disposal of inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,218</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">58,992</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Change in fair value of warrants liability</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(739,616</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(599,865</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">229,749</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Loss on disposal of equipment and intangible assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,502</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">232,171</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">(Recovery from) provision for doubtful accounts:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">&ndash; accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,148</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,826</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(46,831</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">&ndash; other receivables and prepayments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">499</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,403</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32,213</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Change in warranty obligation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,911</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(10,261</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(130,885</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">(Recovery from) provision for inventory obsolescence</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,363</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(73,860</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Impairment loss for intangible assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,281,779</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Unrealized loss on marketable securities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,356,565</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; font-weight: bold; text-align: left">Changes in assets and liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Decrease (increase) in accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,222</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(88,270</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">115,239</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Decrease (increase) in advances to suppliers</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">&ndash; third parties</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">145,024</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">233,490</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(341,776</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">&ndash; related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">194,311</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Decrease (increase) in other receivables and prepayments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">69,773</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,352</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(71,117</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Increase in interest receivable &ndash; related
    party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,523</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(161,384</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Decrease (increase) in inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">255,592</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(137,464</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,007,026</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Decrease (increase) in other taxes receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">36,858</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(92,897</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(281,373</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">(Decrease) increase in accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,234</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">186,561</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(24,563</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Increase in interest payable- related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,053</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">178,708</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Decrease in due to related parties &ndash; Trade</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(475</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Increase (decrease) in advances from customers</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34,799</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(80,602</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">206,646</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; text-indent: -0.125in; padding-left: 0.125in; text-align: left">Increase in accrued expenses
    and other current liabilities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">553,354</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">214,245</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">119,549</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; font-weight: bold; text-align: left; padding-bottom: 1.5pt">Net cash
    used in operating activities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,670,903</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,629,567</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(5,408,997</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">The accompanying
notes are an integral part of these consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LIANLUO SMART LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(In U.S. dollars)&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the years ended December
    31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Cash flows from investing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left">Proceeds from disposal of equipment</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">23,016</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,309</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Capital expenditures and other additions</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(776,328</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(40,780</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Loan to a related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,000,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,000,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Repayment from a related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">549,192</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Consideration paid to BTL</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(146,032</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Non-marketable equity investments</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,500,043</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Net cash provided by (used in) investing activities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">23,016</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(6,225,827</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,686,855</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Cash flows from financing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Loans from related parties</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,362,681</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,682,642</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,480,320</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Net proceeds from option exercises</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,851</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Net proceeds from issuance of common stock, net of issuance costs</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,492,538</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt"><B>Net cash provided by financing activities</B></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,362,681</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,700,493</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,972,858</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt">Effect of exchange rate fluctuations on cash and cash
    equivalents</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(169,269</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(177,275</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">139,656</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Net decrease in cash and cash equivalents</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(454,475</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,332,176</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,983,338</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Cash and cash equivalents at beginning of year</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">477,309</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6,809,485</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">10,792,823</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Cash and cash equivalents at end of year</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">22,834</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">477,309</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">6,809,485</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Supplemental cash flow information</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Cash paid during the year for:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt; text-indent: 7.1pt">Income tax</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt; text-indent: 7.1pt">Interest</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">14,840</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,812</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Non-cash investing and financing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 18pt">Acquisition of property and equipment
    and construction in progress by decreasing inventories</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">947,172</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 18pt">Offset short-term borrowings - related
    party against loans to a related party (including accrued interests)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">5,381,589</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral
part of these consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="fin_006"></A><B>LIANLUO SMART
LIMITED AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>1.</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ORGANIZATION
                                         AND PRINCIPAL ACTIVITIES</B></FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Lianluo Smart Limited (&ldquo;Lianluo Smart&rdquo;
or the &ldquo;Company&rdquo;) (previously known as &ldquo;Dehaier Medical Systems Limited&rdquo;) was incorporated as an international
business company under the International Business Companies Act, 1984, in the British Virgin Islands on July 22, 2003. On November
21, 2016, the Company changed its name from Dehaier Medical Systems Limited to Lianluo Smart Limited, and its NASDAQ stock ticker
from DHRM to LLIT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On April 22, 2010, the Company completed an initial public offering
of 187,500 common shares. The offering was completed at an issuance price of $64.00 per share. Prior to the offering, the Company
had 375,000 issued and outstanding shares, and after the offering, the Company had 562,500 issued and outstanding shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On April 28, 2016, the Company entered into a definitive securities
purchase agreement (the &ldquo;SPA&rdquo;) with Hangzhou Lianluo Interactive Information Technology Co., Ltd. (&ldquo;Lianluo Interactive&rdquo;
or &ldquo;Hangzhou Lianluo&rdquo;) to sell 1,388,888 of its common shares and warrants to purchase common shares to Lianluo Interactive
for an aggregate purchase price of $20 million (Note 14).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Lianluo Smart distributed and provided after-sale
services for medical equipment in China mainly through its wholly-owned subsidiary, Beijing Dehaier Medical Technology Co., Limited
(&ldquo;Beijing Dehaier&rdquo;) and&nbsp;Lianluo Connection Medical Wearable Device Technology (Beijing) Co., Ltd. (&ldquo;Lianluo
Connection&rdquo;), which were both formed in Beijing, the PRC, for the business development in the health equipment market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Currently, Lianluo Smart owns 100% of Lianluo
Connection and Lianluo Connection owns 100% of Beijing Dehaier.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Lianluo Smart, through its subsidiaries,
now distributes branded, proprietary medical equipment, such as sleep apnea machines, ventilator air compressors, and laryngoscope.
Standard product registration, product certification and quality management system have been established; ISO13485 industry standard
has also already been passed. It also has the distribution rights for a number of international medical equipment suppliers for
products including ventilator, laryngoscope, sleep apnea machines and other medical equipment accessories.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B>2.</B></TD><TD STYLE="text-align: left"><B>GOING CONCERN
                                         AND LIQUIDITY</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">As of December 31, 2019, the Company had
$0.02 million in cash and cash equivalents which decreased from $0.48 million at December 31, 2018. The Company&rsquo;s principal
sources of liquidity have been proceeds from issuances of equity securities, and loans from banks and related parties. As reflected
in the consolidated financial statements, the Company had a net loss of $4.45 million and used $1.67 million of cash in operation
activities for the year ended December 31, 2019. The Company had a working capital deficiency of $1.56 million. This has raised
substantial doubt about the Company&rsquo;s ability to continue as a going concern. In February and March 2020, the Company obtained
approximately $7.2 million equity financing. Considering equity financing and the cost cutting activities, the Company believes
that the current cash and cash equivalents and the anticipated cash flows from operations will be sufficient to meet the anticipated
working capital requirements and expenditures for the next 12 months. The Company may, however, decide to enhance the liquidity
position or increase the cash reserve for future investments or operations through additional capital, and finance funding from
banks and/or related parties. The issuance and sale of additional equity would result in further dilution to the Company&rsquo;s
shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants
that would restrict the operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">As described in Note 21, on January 30, 2020,
the World Health Organization (&ldquo;WHO&rdquo;) announced a global health emergency because of a new strain of coronavirus originating
in Wuhan, China (the &ldquo;COVID-19 outbreak&rdquo;) and the risks to the international community as the virus spreads globally
beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase
in exposure globally.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The full impact of the COVID-19 outbreak
continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have
on the Company&rsquo;s financial condition, liquidity, and future results of operations. Management is actively monitoring the
global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution
of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19
outbreak on its results of operations, financial condition, or liquidity for fiscal year 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">As a result of these events, the Company
assessed its near-term operations, working capital, finances and capital formation opportunities, and implemented, in late December
2019 and early February 2020, a downsizing of our operations, including workforce reductions, reductions of salaried employee
compensation and a reduction of hours worked to preserve cash resources, cut costs and focus the Company&rsquo;s operations on
customer-centric sales and project management activities. The extent to which COVID-19 will impact the Company&rsquo;s business
and financial results will depend on future developments, which are uncertain and cannot be predicted at this time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company&rsquo;s service was suspended
due to restrictions and hospital closures except for essential services in February 2020 and recovered gradually in March 2020
as hospitals began to resume business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0">The duration and likelihood of success of
the Company&rsquo;s downsizing effort, workforce reduction and cost-cutting measures are uncertain. If these actions do not meet
the expectations, or additional capital is not available, the Company may not be able to continue their operations. Other factors
that will affect the ability to continue operations include the market demand for the products and services, the ability to service
the needs of the Company&rsquo;s customers and prospects with a reduced workforce, potential contract cancellations, project scope
reductions and project delays, management of the working capital, the availability of cash to fund the operations, and the continuation
of normal payment terms and conditions for purchase of the products and services.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>3.</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>SUMMARY
                                         OF SIGNIFICANT ACCOUNTING POLICIES</B></FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Basis of Presentation</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The accompanying consolidated financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America (&ldquo;U.S. GAAP&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Basis of Consolidation</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The consolidated financial statements include
the accounts of Lianluo Smart and its wholly-owned subsidiaries. All inter-company transactions and balances are eliminated in
consolidation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Share Combination</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On October 21, 2020, the Company completed
a share combination of its common shares at a ratio of one-for-eight, which decreased the Company&rsquo;s outstanding Class A common
shares from 17,685,475 shares to 2,210,683 shares and the Company&rsquo;s outstanding Class B common shares from 11,111,111 shares
to 1,388,888 shares. This share combination also decreased the Company&rsquo;s authorized shares to 6,250,000 common shares of
par value of US$0.021848 each, of which 4,736,111 are designated as Class A common shares and 1,513,889 are designated as Class
B common shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Accordingly, all share and per share information
has been restated to retroactively show the effect of this share combination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Foreign currency translation and transactions</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The functional currency of Lianluo Smart
Limited is United States dollars (&ldquo;US$&rdquo; or &ldquo;$&rdquo;). The functional currency of Beijing Dehaier and Lianluo
Connection are Renminbi (&ldquo;RMB&rdquo;), and PRC is the primary economic environment in which the Company operates. Transactions
denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates
prevailing at the dates of the transactions. The resulting exchange differences are included in the determination of net income
for the respective periods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
financial statements of the Company&rsquo;s foreign operations are translated into US</FONT>$ <FONT STYLE="font-family: Times New Roman, Times, Serif">in
accordance with ASC 830-10, &ldquo;Foreign Currency Matters&rdquo;. For financial reporting purposes, the financial statements
of the Company&rsquo;s PRC subsidiary are prepared using RMB are translated into Company&rsquo;s reporting currency, the US$.
Assets and liabilities are translated using the exchange rate at each balance sheet date. Revenue and expenses are translated
using average rates prevailing during each reporting period, and Shareholders&rsquo; equity is translated at historical exchange
rates except for the change in retained earnings during the year which is the result of the income. The cumulative translation
adjustments are recorded in accumulated other comprehensive income in the accompanying consolidated statements of shareholders&rsquo;
equity.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The exchange rates applied are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap">&nbsp;</TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December
    31,<BR> 2019</TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December
    31,<BR> 2018</TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">RMB to US$ exchange rate at balance sheets dates,</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">6.9762</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">6.8755</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Year Ended December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left">Average RMB to US$ exchange rate for each year</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">6.8985</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">6.6090</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">6.7553</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">No representation is made that the RMB amounts
could have been, or could be, converted into U.S. dollars at the rates used in translation. The source of the exchange rates is
generated from People&rsquo;s Bank of China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Use of Estimates</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The preparation of the consolidated financial
statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements
and the reported amounts of revenues and expenses during the reporting periods. Estimates are adjusted to reflect actual experience
when necessary. Significant accounting estimates reflected in the Company&rsquo;s consolidated financial statements include revenue
recognition, reserve for doubtful accounts, valuation of inventories, impairment testing of long-term assets, standard warranty
obligation, warrants liability, stock-based compensation, recoverability of intangible assets, property and equipment, and realization
of deferred tax assets. Actual results could differ from those estimates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Cash and Cash Equivalents</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Cash and cash equivalents consist of cash
on hand and highly liquid investments which are unrestricted as to withdrawal or use, and which have maturities of three months
or less when purchased. The Company maintains uninsured cash and cash equivalents with various financial institutions in the PRC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Accounts Receivable, net</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Accounts receivable are presented net of
an allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for estimated losses. The Company
reviews the accounts receivable on a periodic basis and makes general and specific allowance when there is doubt as to the collectability
of individual balances. In evaluating the collectability of individual receivable balance, the Company considers many factors,
including the age of the balance, a customer&rsquo;s historical payment history, its current credit-worthiness and current economic
trends. Accounts are written off after exhaustive efforts at collection. Accounts receivable terms typically are net 60-180 days
from when the services were provided, or when goods were delivered. &nbsp;At December 31, 2019 and 2018, the Company has established,
based on a review of its outstanding balances, an allowance for doubtful accounts in the amounts of $36,416 and $26,773, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Other Receivables and Prepayments, net</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Other receivables and prepayments primarily
include advances to employees, prepaid rentals and deposits to landlords and service providers. Management regularly reviews aging
of receivables and prepayments and changes in payment trends and records a reserve when management believes collection of amounts
due are at risk. Accounts considered uncollectible are written off after exhaustive efforts at collection.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Advances to Suppliers, net</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company, as a common practice in the
PRC, often makes advance payments to suppliers for unassembled parts. Advances to suppliers are reviewed periodically to determine
whether their carrying value has become impaired.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Fair Value of Financial Instruments</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">ASC Topic 820, &ldquo;Fair Value Measurements
and Disclosures,&rdquo; requires disclosure of the fair value of financial instruments held by the Company. Fair value is the
price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous
market for the asset or liability in an orderly transaction between market participants at the measurement date. ASC Topic 825,
&ldquo;Financial Instruments,&rdquo; defines fair value and establishes a three-level valuation hierarchy for disclosures of fair
value measurement that enhances disclosure requirements for fair value measures. The Company&rsquo;s carrying amounts reported
in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments are a reasonable
estimate of their fair values because carrying value of cash and cash equivalents, accounts receivable, accounts payable, other
payables and accrued liabilities approximate fair value because of the short-term nature of these items. The estimated fair values
of short-term related party borrowings were not materially different from their carrying value as presented due to the short maturities.
As the carrying amounts are reasonable estimates of the fair value, these financial instruments are classified within Level 1
of the fair value hierarchy. The three levels of valuation hierarchy are defined as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 1 inputs to the
    valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 5.1pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 2 inputs to the
    valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable
    for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 5.1pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level 3 inputs to the
    valuation methodology are unobservable and significant to the fair value measurement.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 5.1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Financial assets and liabilities are classified
in their entirety based on the lowest level of input that is significant to the fair value measurement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The marketable equity securities are accounted
at fair value, with changes in fair value recorded through earnings. The fair value of marketable equity securities was determined
using the quote price in the active market, with Level 1 inputs (Note 9).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The fair value of warrants was determined
using the Black Scholes Model, with level 3 inputs (Note 14).</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Warrant Liability</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">For warrants that are not indexed to the
Company&rsquo;s stock, the Company records the fair value of the issued warrants as a liability at each balance sheet date and
records changes in the estimated fair value as a non-cash gain or loss in the consolidated statement of operations and comprehensive
income. The warrant liability is recognized in the balance sheet at the fair value (level 3). The fair value of these warrants
has been determined using the Black-Scholes pricing mode. The Black-Scholes pricing model provides for assumptions regarding volatility,
call and put features and risk-free interest rates within the total period to maturity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Inventories</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Inventories include raw materials, working
in progress and finished goods and consist of assembled and unassembled parts relating to medical devices. Inventories are stated
at the lower of cost or net realizable value. Cost is determined on a weighted-average basis. Management compares the cost of
inventories with the net realizable value and writes down inventories to net realizable value, if lower. Net realizable value
is based on estimated selling prices in the ordinary course of business less cost to sell. These estimates are based on the current
market and economic condition and the historical experience of selling products of similar nature. Management of the Company reassesses
the estimations at the end of each reporting period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Property and Equipment</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Property
and equipment are recorded at cost less accumulated depreciation and impairment losses, if any. Depreciation is calculated on
a straight-line basis over the following estimated useful lives</FONT>:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: #CCEEFF">
    <TD STYLE="width: 40%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Leasehold
    improvements</FONT></TD>
    <TD STYLE="width: 60%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shorter
    of the useful lives or the lease term</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Machinery and equipment</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2 - 3 years</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: #CCEEFF">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furniture and office
    equipment</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3 - 5 years</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Motor vehicles</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3 years</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Construction in progress represents capital
expenditures for direct costs of construction or acquisition. Capitalization of these costs ceases and the construction in progress
is transferred to the appropriate category of property, plant and equipment when substantially all the activities necessary to
prepare the assets for their intended use are completed. Construction in progress is not depreciated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Intangible Assets</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Intangible assets are recorded at cost less
accumulated amortization and impairment losses, if any. Amortization is calculated on a straight-line basis over the following
estimated useful lives:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Software copyrights</P></TD>
    <TD STYLE="width: 60%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">20 years</P></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>Patent rights</TD>
    <TD>10 years</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other software</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5 years</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Impairment of Long-Lived Assets</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Long-lived assets such as property and equipment
and intangible assets subject to amortization are reviewed for impairment whenever events or circumstances indicate that the carrying
amount of an asset may not be fully recoverable. When these events occur, the Company compares the carrying value of the long-lived
assets to the estimated undiscounted future cash flows expected to result from the use of the asset and eventual disposition.
If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset, an impairment loss, equal
to the excess of the carrying amount over the fair value of the asset, is recognized. Fair value is generally determined using
the asset&rsquo;s expected future discounted cash flows or market value, if readily determinable. Based on its review, the Company
determined that, for the years ended December 31, 2019 and 2018, impairment loss for intangible assets was $nil and $3,281,779,
respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Equity securities </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company&rsquo;s equity securities represent
equity investments in Guardion Health Sciences, Inc. (&ldquo;GHSI&rdquo;) made in November 2017. The Company holds less than 5%
of the GHSI&rsquo;s total shares. Details see Note 9. The equity securities were accounted for as non-marketable securities in
2018 on the balance sheets and as marketable securities in 2019 when GHSI went public in April 5, 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Prior to January 1, 2018, the Company accounted
for the equity securities at cost and only adjusted for other-than-temporary declines in fair value and distributions of earnings.
An impairment loss was recognized in the consolidated statements of operations equal to the excess of the investment&rsquo;s cost
over its fair value at the balance sheet date of the reporting period for which the assessment was made. The fair value would
then become the new cost basis of investments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Subsequent to the adoption of ASU 2016-01
on January 1, 2018, equity investments, except for those accounted for under the 2016-01 equity method, those that result in consolidation
of the investee and certain other investments, are measured at fair value, and any changes in fair value are recognized in earnings.
For equity securities without readily determinable fair value and do not qualify for the existing practical expedient in Accounting
Standards Codification (&ldquo;ASC&rdquo;) Topic 820, Fair Value Measurements and Disclosures (&ldquo;ASC 820&rdquo;) to estimate
fair value using the net asset value per share (or its equivalent) of the investment, the Company elected to use the measurement
alternative to measure those investments at cost, less any impairment, plus or minus changes resulting from observable price changes
in orderly transactions for identical or similar investments of the same issuer, if any. Pursuant to ASU 2016-01, for equity investments
measured at fair value with changes in fair value recorded in earnings, the Company does not assess whether those securities are
impaired. For those equity investments that the Company elects to use the measurement alternative, the Company makes a qualitative
assessment of whether the investment is impaired at each reporting date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">As of December 31, 2018, the investment without
readily determinable fair value was accounted for under the measurement alternative method of accounting. The investment was measured
at cost, less any impairment, plus or minus any changes resulting from observable price changes in orderly transactions for an
identical or similar investment of the same issuer. As of December 31, 2019, the investment was accounted at fair value with changes
recorded through earnings.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Revenue Recognition</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">In May 2014 the FASB issued Accounting Standards
Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASC 606), which supersedes all existing revenue recognition
requirements, including most industry specific guidance. This new standard requires a company to recognize revenues when it transfers
goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods
or services. We adopted these amendments with ASU 2014-09 (collectively, the new revenue standards).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The new revenue standards became effective
for the Company on January 1, 2018, and were adopted using the modified retrospective method. The adoption of the new revenue
standards as of January 1, 2018 did not change the Company&rsquo;s revenue recognition as the majority of its revenues continue
to be recognized when the customer takes control of its product or services. As the Company did not identify any accounting changes
that impacted the amount of reported revenues with respect to its product revenues, no adjustment to accumulated deficit was required
upon adoption.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Under the new revenue standards, the Company
recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration
which it expects to receive in exchange for those goods. The Company recognizes revenues following the five step model prescribed
under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii)
determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize
revenues when (or as) the Company satisfies the performance obligation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The following is a description of principal
activities from which the Company generates revenue and related revenue recognition policies:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sale
                                         of medical equipment</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">The Company distributes medical
equipment, such as sleep apnea machines, ventilator air compressors, laryngoscope, in China. Control of products sold transfers
to customers upon shipment from the Company&rsquo;s facilities, and the Company&rsquo;s performance obligations are satisfied
at that time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent
a fulfillment activity rather than a promised service to the customer. The Company also provides after-sale services for medical
equipment, such as sleep apnea machines, ventilator air compressors, laryngoscope, in China. The Company typically sells its branded
products with standard warranty terms covering 12 months after purchase. The warranty requires the Company to repair all mechanical
malfunctions and, if necessary, replace defective components.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 18pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">The Company evaluates its arrangements
with distributors and determines that it is the primary obligor in the sales of distributed products, is subject to inventory
risk, has latitude in establishing prices, and assumes credit risk for the amount billed to the customer, or has several but not
all of these indicators. In accordance with ASC 606, the Company determines that it is appropriate to record the gross amount
of product sales and related costs. As the Company is a principal and it obtains control of the specified goods before they are
transferred to the customers, the revenues should be recognized in the gross amount of consideration to which it expects to be
entitled in exchange for the specified goods transferred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Provision
                                         of sleep diagnostic services</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-indent: -21.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">Starting from 2018, the Company
started to earn service revenue from provision of technical services in relation to detection and analysis of Obstructive Sleep
Apnea Syndrome (&ldquo;OSAS&rdquo;). The Company is focused on the promotion of sleep respiratory solutions and service in public
hospitals. Its wearable sleep diagnostic products and cloud-based service are also available in medical centers of Chinese private
preventive healthcare companies in China. Revenue is recognized when the Company&rsquo;s diagnostic services are provided to the
user at medical centers and public hospitals.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 18pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 18pt; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 18pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">In the PRC, value added tax (&ldquo;VAT&rdquo;)
of 13% and 6% of the invoice amount is collected in respect of the sales of goods and service rendered, respectively, on behalf
of tax authorities. The VAT collected is not revenue of the Company; instead, the amount is recorded as a liability on the balance
sheet until such VAT is paid to the authorities.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Cost of Revenues</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Cost of revenues primarily includes wages
to assemble parts and the costs of unassembled parts, other expenses associated with the assembly and distribution of products
and depreciation of fixed assets in the provision of services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Selling Expenses</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Selling expenses consist primarily of salaries
and related expenses for personnel engaged in sales, marketing and customer support functions, and costs associated with advertising
and other marketing activities, and depreciation expenses related to equipment used for sales and marketing activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>General and Administrative Expenses</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">General and administrative expenses primarily
consist of salaries and benefits and related costs for our administrative personnel and management, stock-based compensation,
expenses associated with our research and development, registration of patents and intellectual property rights in China and abroad,
fees and expenses of our outside advisers, including legal, audit and register expenses, expenses associated with our administrative
offices, and the depreciation of equipment used for administrative purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Advertising Expenses</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Advertising expenses are expensed as incurred.
For the years ended December 31, 2019, 2018 and 2017, advertising and promotional expenses recognized in the consolidated statements
of comprehensive loss were $19,811, $56,259 and $76,592, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Warranty </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company typically sells its branded products
with standard warranty terms covering 12 months after purchase. The warranty requires the Company to repair all mechanical malfunctions
and, if necessary, replace defective components.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company provides for the estimated cost
of product warranties at the time revenue is recognized and records warranty expenses in the selling expenses. The Company&rsquo;s
warranty obligation is affected by product failure rates and material usage and service delivery costs incurred in correcting
product failure. Should actual material usage or service delivery costs differ from the Company&rsquo;s estimates, the Company
may reverse warranty liability at warranty expiry date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Recovery gain from warranty expense accrued
for the years ended December 31, 2019, 2018 and 2017 was $(7,911), $(10,261) and $(130,885), respectively.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Research and Development Costs</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Research and development costs relating to
the development of new products and processes, including significant improvements and refinements to existing products, are expensed
as incurred, and included in general and administrative expenses. Research and development costs were $0, $301,713 and $344,575
for the years ended December 31, 2019, 2018 and 2017, respectively.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Government Subsidies</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Government subsidies primarily consist of
financial subsidies received from provincial and local governments for operating a business in their jurisdictions and compliance
with specific policies promoted by the local governments. For certain government subsidies, there are no defined rules and regulations
to govern the criteria necessary for companies to receive such benefits, and the amount of government subsidy is determined at
the discretion of the relevant government authorities. The government subsidies of non-operating nature with no further conditions
to be met are recorded as non-operating income in &ldquo;Other income&rdquo; when received. The government subsidies with certain
operating conditions are recorded as &ldquo;deferred income&rdquo; when received and will be recorded as operating income when
the conditions are met. During the years ended December 31, 2019, 2018 and 2017, government subsidies with no further conditions
to be met of $0, $0 and $17,394, respectively, were recorded.&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Leases </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Leases where substantially all the rewards
and risk of assets remain with the leasing company are accounted for as operating leases. Payments made under operating leases
are charged to the consolidated statement of operations on a straight-line basis over the shorter of the lease term or estimated
economic life of the leased property. The majority of the Company&rsquo;s leases were short term (less than 12 months) and the
Company elected the practical expedient not to record right of use of assets for short term leases.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Loss per Share</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company follows the provisions of ASC
260-10, &ldquo;Earnings per Share&rdquo;. &nbsp;The Company has been authorized to issue Class A and Class B common stock. The
two classes of common stock are substantially identical in all material respects, except for voting rights. Since the Company
did not declare any dividends during the years ended December 31, 2019 and 2018, the net loss per common share attributable to
each class is the same under the &ldquo;two-class&rdquo; method. As such, the two classes of common stock have been presented
on a combined basis in the consolidated statements of operations and comprehensive income and in the above computation of net
income per common share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Diluted loss per share reflect the potential
dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares.
Common stock equivalents having an anti-dilutive effect on earnings per share are excluded from the calculation of diluted loss
per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Value Added Tax</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company reports revenues, net of PRC&rsquo;s
value added tax, for all the periods presented in the consolidated statements of income and comprehensive income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Stock-Based Compensation</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company accounts for stock-based share-based
compensation awards to employees at fair value on the grant date and recognizes the expense over the employee&rsquo;s requisite
service period. The Company&rsquo;s expected volatility assumption is based on the historical volatility of Company&rsquo;s stock
or the expected volatility of similar entities. The expected life assumption is primarily based on historical exercise patterns
and employee post-vesting termination behavior. The risk-free interest rate for the expected term of the option is based on the
U.S. Treasury yield curve in effect at the time of grant. The expected dividend is zero based on the Company&rsquo;s current and
expected dividend policy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Share-based compensation expenses for stock-based
share-based compensation awards granted to non-employees are measured at fair value at the earlier of the performance commitment
date or the date service is completed, and recognized over the period during which the service is provided. The Company applies
the guidance in ASC 718 to measure share options and restricted shares granted to non-employees based on the then-current fair
value at each reporting date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; background-color: white"><U>Comprehensive
income</U>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; background-color: white">Comprehensive income
is comprised of net income and all changes to the statements of stockholders&rsquo; equity, except those due to investments by
stockholders, changes in paid-in capital and distributions to stockholders. For the Company, comprehensive income for the years
ended December 31, 2019, 2018 and 2017 included cumulative foreign currency translation adjustments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Segment Information</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company&rsquo;s segments are business
units that offer different products and services and are reviewed separately by the chief operating decision maker (the &ldquo;CODM&rdquo;),
in deciding how to allocate resources and in assessing performance. The Company&rsquo;s CODM is the Company&rsquo;s Chief Executive
Officer. During 2017, there was only one segment, which is the business of developing, commercializing and distribution of medical
equipment, such as sleep apnea machines, ventilator air compressors, and laryngoscope. During 2018, the Company started to earn
service revenue from provision of technical services in relation to diagnosis of Obstructive Sleep Apnea Syndrome (&ldquo;OSAS&rdquo;).
The Company is focused on the promotion of sleep respiratory solutions and service in public hospitals. Its wearable sleep diagnostic
products and cloud-based service are also available in medical centers of Chinese private preventive healthcare companies in China.
We have two reportable segments: sale of medical equipment and provision of OSAS during 2018 and 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For
    the Years Ended December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">Revenues</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left; text-indent: 7.1pt">Sale of medical equipment</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">212,394</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">342,344</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">882,011</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: 7.1pt">Provision of OSAS diagnostic services</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">171,064</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">217,042</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Total net revenues</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">383,458</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">559,386</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">882,011</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold">Cost of revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 7.1pt">Sale of medical equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(112,942</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(464,918</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,655,970</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: 7.1pt">Provision of OSAS diagnostic services</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(630,802</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(292,983</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(743,744</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(757,901</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,655,970</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Gross loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 7.1pt">Sale of medical equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">99,452</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(122,574</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(773,959</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: 7.1pt">Provision of OSAS diagnostic services</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(459,738</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(75,941</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(360,286</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(198,515</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(773,959</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Depreciation and amortization expense:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 7.1pt">Sale of medical equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">84,371</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">535,800</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,328,403</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: 7.1pt">Provision of OSAS diagnostic services</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">693,746</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">291,830</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">778,117</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">827,630</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,328,403</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Capital expenditure</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 7.1pt">Sale of medical equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">16,137</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">40,780</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: 7.1pt">Provision of OSAS diagnostic services</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">760,191</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">776,328</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">40,780</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The total assets for the two reportable segments
were shared and indistinguishable for reporting purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Concentrations of credit, economic, political
risks and exchange risks</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company&rsquo;s operations are carried
out in the PRC. Accordingly, the Company&rsquo;s business, financial condition and results of operations may be influenced by
the political, economic and legal environment in the PRC, and by the general state of the PRC&rsquo;s economy. The Company&rsquo;s
operation in the PRC is subject to special considerations and significant risks not typically associated with companies in North
America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and
foreign currency exchange. The Company&rsquo;s results may be adversely affected by changes in the political and social conditions
in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency
conversion, remittances aboard, and rates and methods of taxation, among other things.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Financial instruments which potentially subject
the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. All of the Company&rsquo;s
cash is maintained with state-owned banks within the PRC and none of these deposits are covered by insurance. The Company has
not experienced any losses in such accounts. A portion of the Company&rsquo;s sales are credit sales which are primarily to customers
whose abilities to pay are dependent upon the industry economics prevailing in these areas; however, concentrations of credit
risk with respect to trade accounts receivables are limited due to generally short payment terms. The Company also performs ongoing
credit evaluations of its customers to help further reduce credit risk.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company cannot guarantee that the current
exchange rate will remain steady. Therefore, there is a possibility that the Company could post the same amount of profit for
two comparable periods and yet, because of a fluctuating exchange rates, record higher or lower profit depending on exchange rate
of PRC Renminbi (RMB) converted to U.S. dollars on the relevant dates. The exchange rate could fluctuate depending on changes
in</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">the political and economic environment without
notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Income Taxes</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company uses the asset and liability
method of accounting for income taxes in accordance with ASC 740, &ldquo;Accounting for Income Taxes.&rdquo; Under this method,
income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year; and, (ii) deferred tax
consequences of temporary differences resulting from matters that have been recognized in an entity&rsquo;s financial statements
or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in
the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date.
A valuation reserve is provided to reduce the deferred tax assets reported if, based on the weight of available positive and negative
evidence. Based on management&rsquo;s estimate, it is more likely than not that all of the deferred tax assets will not be realized.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">ASC 740 prescribes a recognition threshold
and measurement attribute for the financial statement recognition of a tax position taken or expected to be taken on a tax return.
Under ASC 740, a tax benefit from an uncertain tax position taken or expected to be taken may be recognized only if it is &ldquo;more
likely than not&rdquo; that the position is sustainable upon examination, based on its technical merits. The tax benefit of a
qualifying position under ASC 740 would equal the largest amount of tax benefit that is greater than 50% likely of being realized
upon ultimate settlement with a taxing authority having full knowledge of all the relevant information. A liability (including
interest and penalties, if applicable) is established in the financial statements to the extent a current benefit has been recognized
on a tax return for matters that are considered contingent upon the outcome of an uncertain tax position. Related interest and
penalties, if any, are included as components of income tax expense and income taxes payable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The implementation of ASC 740 resulted in
no material liability for unrecognized tax benefits. The Company recognizes interest and penalties, if any, related to unrecognized
tax benefits as income tax expense in the statements of income and comprehensive income. During the years ended December 31, 2019,
2018 and 2017, the Company did not incur any interest or penalties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Recently Adopted Accounting Standards</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">In May 2014, the FASB issued ASU No. 2014-09,
&ldquo;Revenue from Contracts with Customers (Topic 606).&rdquo; This guidance supersedes current guidance on revenue recognition
in Topic 605, &ldquo;Revenue Recognition.&rdquo; In addition, there are disclosure requirements related to the nature, amount,
timing, and uncertainty of revenue recognition. In August 2015, the FASB issued ASU No. 2015-14 to defer the effective date of
ASU No. 2014-09 for all entities by one year. For public business entities that follow U.S. GAAP, the deferral results in the
new revenue standard are being effective for fiscal years, and interim periods within those fiscal years, beginning after December
15, 2017, with early adoption permitted for interim and annual periods beginning after December 15, 2016. We applied the new revenue
standard beginning January 1, 2018. We have analyzed the Company&rsquo;s revenue from contracts with customers in accordance with
the new revenue standard and determined the impact on the consolidated financial statements was not material.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">In June 2018, the FASB issued ASU 2018-07,
&ldquo;Improvements to Nonemployee Share-Based Payment Accounting&rdquo;, which expands the requirements of ASC Topic 718 to include
nonemployee share-based payment awards while it retains specific guidance related to the attribution of compensation cost and
provides for potential differences in the valuation of options. ASU 2018-07 supersedes Subtopic 505-50, &ldquo;Equity&mdash;Equity-Based
Payments to Non-Employees&rdquo;, and is effective for public business entities for annual and interim periods in fiscal years
beginning after December 15, 2018. We adopted the ASU 2018-07 beginning January 1, 2019. The standard did not have a material
impact on our consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Codification Improvements to Topic 842, Leases
(&ldquo;ASU 2018-10&rdquo;) and ASU 2018-11, Leases (Topic 842), Targeted Improvements (&ldquo;ASU 2018-11&rdquo;). The amendments
in ASU 2018-10 affect only narrow aspects of the guidance issued in the amendments in ASU 2016-02, including but not limited to
lease residual value guarantee, rate implicit in the lease and lease term and purchase option. The amendments in ASU 2018-11 provide
an optional transition method for adoption of the new standard, which will allow entities to continue to apply the legacy guidance
in ASC 840, including its disclosure requirements, in the comparative periods presented in the year of adoption.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Effective January 1, 2019 we adopted the
new standard using the modified retrospective approach and implemented internal controls to enable the preparation of financial
information upon adoption. We elected to adopt both the transition relief provided in ASU 2018-11 and the package of practical
expedients which allowed us, among other things, to retain historical lease classifications and accounting for any leases that
existed prior to adoption of the standard. Additionally, we elected the practical expedients allowing us not to separate lease
and non-lease components and not record leases with an initial term of twelve months or less (&ldquo;short-term leases&rdquo;)
on the balance sheet across all existing asset classes. The standard did not materially impact our consolidated statements of
operations or cash flows.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Recent Accounting Pronouncements</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">In June 2016, the FASB issued ASU 2016-13,
&ldquo;Financial Instruments&mdash;Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments&rdquo;, which
will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The
guidance replaces the incurred loss impairment methodology with an expected credit loss model for which a company recognizes an
allowance based on the estimate of expected credit loss. The Company is currently evaluating the impact of adopting this standard
on its consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">In January 2017, the FASB issued ASU 2017-04,
&ldquo;Intangibles&mdash;Goodwill and Other (Topic 350): simplifying the test for goodwill impairment&rdquo;, the guidance removes
Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Goodwill impairment will now
be the amount by which a reporting unit&rsquo;s carrying value exceeds its fair value, not the difference between the fair value
and carrying amount of goodwill which was the step 2 test before. The ASU should be adopted on a prospective basis for the annual
or any interim goodwill impairment tests beginning after December 15, 2019. Early adoption is permitted for interim or annual
goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of
adopting this standard on its consolidated financial statements.</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">In August 2018, the FASB issued ASU 2018-13,
&ldquo;Changes to the Disclosure Requirements for Fair Value Measurement.&rdquo; This standard eliminates the current requirement
to disclose the amount or reason for transfers between level 1 and level 2 of the fair value hierarchy and the requirement to
disclose the valuation methodology for level 3 fair value measurements. The standard includes additional disclosure requirements
for level 3 fair value measurements, including the requirement to disclose the changes in unrealized gains and losses in other
comprehensive income during the period and permits the disclosure of other relevant quantitative information for certain unobservable
inputs. The new guidance is effective for interim and annual periods beginning after December 15, 2019. The Company does not anticipate
that the adoption of the new standard will have a material effect on its consolidated financial statements.</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">In August 2018, the FASB issued ASU 2018-15,
&ldquo;Internal-Use Software &ndash; Customer&rsquo;s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement.&rdquo;
This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement service contract with
the guidance to capitalize implementation costs of internal use software. The ASU also requires that the costs for implementation
activities during the application development phase be capitalized in a hosting arrangement service contract, and costs during
the preliminary and post implementation phase are expensed. The new guidance is effective for interim and annual periods beginning
after December 15, 2019. The Company is currently evaluating the impact of adoption of this standard, but does not anticipate
that the adoption will have a material effect on its consolidated financial statements.</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">In October 2018, the FASB issued ASU 2018-17,
Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities, (&ldquo;ASU 2018-17&rdquo;).
ASU 2018-17 requires reporting entities to consider indirect interests held through related parties under common control on a
proportional basis rather than as the equivalent of a direct interest in its entirety for determining whether a decision-making
fee is a variable interest. The standard is effective for all entities for financial statements issued for fiscal years beginning
after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. Entities are required to
apply the amendments in ASU 2018-17 retrospectively with a cumulative-effect adjustment to retained earnings at the beginning
of the earliest period presented. The Company does not anticipate that the adoption of the new standard will have a material effect
on its consolidated financial statements.</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">In April 2019, the FASB issued ASU 2019-04,
Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825,
Financial Instruments, (&ldquo;ASU 2019-04&rdquo;). ASU 2019-04 clarifies and improves areas of guidance related to the recently
issued standards on credit losses (ASU 2016-13), hedging (ASU 2017-12), and recognition and measurement of financial instruments
(ASU 2016-01). The amendments generally have the same effective dates as their related standards. If already adopted, the amendments
of ASU 2016-01 and ASU 2016-13 are effective for fiscal years beginning after December 15, 2019 and the amendments of ASU 2017-12
are effective as of the beginning of the Company&rsquo;s next annual reporting period; early adoption is permitted. The Company
previously adopted ASU 2016-01. The Company does not anticipate that the adoption of the new standard will have a material effect
on its consolidated financial statements.</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">In March 2020, the FASB issued ASU 2020-03,
Codification Improvements to Financial Instruments, (&ldquo;ASU 2020-03&rdquo;). ASU 2020-03 improves various financial instruments
topics, including the CECL Standard. ASU 2020-03 includes seven different issues that describe the areas of improvement and the
related amendments to GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing
clarifications. The amendments related to Issue 1, Issue 2, Issue 4 and Issue 5 were effective upon issuance of ASU 2020-03. The
amendments related to Issue 3, Issue 6 and Issue 7 were effective for the Company beginning on January 1, 2020. The Company does
not anticipate that the adoption of the new standard will have a material effect on its consolidated financial statements.</P>



<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>4.</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ACCOUNTS
                                         RECEIVABLE, NET</B></FONT></TD>
</TR></TABLE>
<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Accounts receivable as of December 31, 2019
and 2018 consist of the following:</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Accounts receivable</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">98,195</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">118,922</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Less: reserve for doubtful accounts</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(36,416</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(26,773</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Accounts receivable, net</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">61,779</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">92,149</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">During the years ended December 31, 2019,
2018 and 2017, bad debts (recovery of bad debts) were $10,148, $5,826 and $(46,831) respectively.</P>



<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>5.</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>OTHER
                                         RECEIVABLES AND PREPAYMENTS, NET</B></FONT></TD>
</TR></TABLE>
<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Other receivables and prepayments as of December
31, 2019 and 2018 consist of the following:</P>

<P STYLE="font: 7pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Rental deposits</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">36,846</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">43,838</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Prepaid expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29,939</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">271,965</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Advances to employees</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">78</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">47</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">66,863</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">315,850</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Less: reserves for doubtful accounts</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(47,996</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(48,069</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Other receivables, net</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">18,867</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">267,781</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">During the years ended December 31, 2019,
2018 and 2017, bad debts on other receivables were $499, $16,403 and $32,213, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>6.</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>INVENTORIES</B></FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Inventories as of December 31, 2019 and 2018
consist of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Raw materials</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">25,985</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">27,638</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Work in progress</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">779</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">902</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Finished goods</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,060,615</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,320,562</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Total inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,087,379</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,349,102</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Less: inventory impairment loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,363</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Inventories, net</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,085,016</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,349,102</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">During the years ended December 31, 2019,
2018 and 2017, write-downs of inventories to lower of cost or net realizable value of $2,363, $0 and $(73,860), respectively,
were (credited against) charged to costs of revenue in relation to the Company&rsquo;s operations. Subsequent sale of impaired
inventory items is recorded as credits to inventory write-downs previously recorded.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>7.</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>PROPERTY
                                         AND EQUIPMENT, NET</B></FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Property and equipment as of December 31,
2019 and 2018 consist of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Plant and machinery</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,915,160</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,770,626</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Automobiles</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">137,367</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">139,380</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Office and computer equipment</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">22,689</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">37,005</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Total property and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,075,216</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,947,011</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Less: Accumulated depreciation</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,418,376</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(685,518</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Property and equipment, net</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">656,840</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,261,493</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Depreciation from the Company&rsquo;s operations
were $778,117, $467,929 and $974,432 for the years ended December 31, 2019, 2018 and 2017 respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company did not record any impairment
on its property and equipment for the years ended December 31, 2019, 2018 and 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>8.</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>INTANGIBLE
                                         ASSETS, NET</B></FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Intangible assets as of December 31, 2019
and 2018 consist of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Software copyright</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,673,830</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,698,359</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Patent and others</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,975,905</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,019,516</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Total intangible assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,649,735</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,717,875</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Less: Accumulated amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,541,480</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,564,070</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Less: Impairment loss</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,108,255</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,153,805</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Intangible assets, net</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Amortization expense from the Company&rsquo;s
continuing operations was $0, $359,701 and $353,971 for the years ended December 31, 2019, 2018 and 2017, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company recorded impairment on its intangible
assets from its continuing operations $0, $3,281,779 and $0 for the years ended December 31, 2019, 2018 and 2017, respectively.
During the year ended December 31, 2018, as a result of lower-than-expected revenue performance of the Company, management determined
not to further update and maintain its software copyright and patent for the therapy products of sleep respiratory business. The
unamortized software copyright and patent and others of $3,281,779 were fully impaired.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B>9.</B></TD><TD STYLE="text-align: left"><B>EQUITY SECURITIES</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On November 3, 2017 (the &ldquo;Effective
Date&rdquo;), the Company completed a purchase of an aggregate of 1,304,348 shares of common stock, par value $0.001 per share
(the &ldquo;Shares&rdquo;) of Guardion Health Sciences, Inc. (&ldquo;GHSI&rdquo; or the &ldquo;Seller&rdquo;), at a purchase price
of $1.15 per Share (or a purchase price of $1.5 million in the aggregate) in a private placement (the &ldquo;Private Placement&rdquo;).
The Private Placement occurred pursuant to a Stock Purchase Agreement dated November 3, 2017 (the &ldquo;Purchase Agreement&rdquo;)
by and among GHSI as Seller and (i) LLIT and (ii) Digital Grid (Hong Kong) Technology Co., Limited (&ldquo;DGHKT&rdquo;; and together
with LLIT, &ldquo;Purchasers&rdquo;), as purchasers of, in aggregate, 4,347,827 Shares for aggregate purchase price of $5.0 million.
The investments account for less five percent of GHSI&rsquo;s total shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Prior to January 1, 2018, the Company accounted
for the equity securities at cost and only adjusted for other-than-temporary declines in fair value and distributions of earnings.
As of December 31, 2018, under ASU 2016-01 the Company elected to measure this equity investment using the measurement alternative,
which requires that the investment is measured at cost, less any impairment, plus or minus any changes resulting from observable
price changes in orderly transactions for an identical or similar investment of the same issuer. For the year ended December 31,
2018 the investment was not impaired and there were no observable price changes.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On January 30, 2019, GHSI effectuated a one-for-two
(1:2) reverse stock split of its common stock without any change to its par value. On April 9, 2019, GHSI closed its initial public
offering of 1,250,000 shares of its common stock at a public offering price of $4.00 per share for total gross proceeds of $5.0
million, before deducting underwriting discounts and commissions and other offering costs and expenses payable by it. GHSI&rsquo;s
shares began trading on the NASDAQ Capital Market on April 5, 2019 under the symbol &ldquo;GHSI&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company accounted for the equity securities
as marketable securities as of December 31, 2019. The share price of GHSI at December 31, 2019 is $0.22 per share, based on which
the Company re-valued its equity securities in GHSI and recognized the fair value change of $1,356,565 through unrealized loss
on marketable securities.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>10.</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>SHORT-TERM
                                         BORROWINGS</B></FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Loans from Hangzhou Lianluo Interactive</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">931,450</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Loans from DGHKT.</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Loans from Ping Chen</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">243,881</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Total short-term borrowings</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,208,331</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The short-term borrowings are all from related
parties. See Note 19.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Interest expense on short-term borrowings
amounted to $0, $200,799 and $6,246 for the years ended December 31, 2019, 2018 and 2017, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>11.</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ACCRUED
                                         EXPENSES AND OTHER CURRENT LIABILITIES</B></FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Other payables and other current liabilities
as of December 31, 2019 and 2018 consist of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Accrued salaries and social welfare</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">663,929</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">337,599</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accrued expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">572,932</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">388,572</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Reimbursed employee&rsquo;s expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27,460</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,228</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Deposits from customers</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">253,014</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">198,907</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">Others</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">13,138</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,813</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Total accrued expenses and other current liabilities</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,530,473</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">977,119</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>12.</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>COMMITMENTS
                                         AND CONTINGENCY</B></FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Operating Leases</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Rent expense for the years ended December
31, 2019, 2018 and 2017 was $206,006, $301,021 and $244,860, respectively. The lease commitment is $46,340 with a contract maturity
date at December 16, 2020. All of Company&rsquo;s leases were short term (less than 12 months) and the Company elected the practical
expedient not to record right of use of assets related to short term leases.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Employment Contracts</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Under
the PRC labor law, all employees have signed employment contracts with the Company. Management employees have employment contracts
with terms up to three years and non-management employees have either a three</FONT>-<FONT STYLE="font-family: Times New Roman, Times, Serif">year
employment contract renewable on an annual basis or non-fixed term employment contract.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Contingency</U></P>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0">The Company is periodically the subject of
various pending or threatened legal actions and claims arising out of its operations in the normal course of business. In the
opinion of management of the Company, adequate provision has been made in the Company&rsquo;s financial statements at December
31, 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>13.</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>EQUITY</B></FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Common Shares</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">LLIT is authorized to issue 4,736,111 shares of Class A common
stock and 1,513,889 shares of Class B common stock, each with a par value of $0.021848. Each share of Class A common stock is entitled
to one vote, and each share of Class B common stock is entitled to ten votes and is convertible at any time into one share of Class
A common stock. Shares of Class A common stock and Class B common stock are treated equally, identically and ratably with respect
to any dividends declared by the Board of Directors unless the Board of Directors declares different dividends to the Class A common
stock and Class B common stock by getting approval from a majority of common stock holders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On April 28, 2016, the Company entered
into a definitive securities purchase agreement with Hangzhou Lianluo pursuant to which Hangzhou Lianluo has agreed to purchase
1,388,888 common shares of the Company for an aggregate of $20,000,000. The purchase price is $14.40 per share, which represents
a 35% premium to the Company&rsquo;s closing price of $10.64 on April 27, 2016. In August 2016, the Company closed the securities
purchase agreement (the &ldquo;Securities Purchase Agreement&rdquo;) with Hangzhou Lianluo and Hangzhou Lianluo completed the purchase
of $20 million of the Company&rsquo;s common shares and warrants to purchase common shares (Note 14). As of December 31, 2016,
the Company reported a subscription receivable of $1,492,538 from Hangzhou Lianluo which had been collected on April 13, 2017.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On June 8, 2017, the Company held the Annual
General Meeting to approve the amend and restate the Company&rsquo;s amended and restated Memorandum and Articles of Association
(the &ldquo;New M&amp;AAs&rdquo;) in order that the Company&rsquo;s authorized share capital be re-classified and re-designated
into 6,250,000 Common Shares of par value of $0.021848 each, of which 4,736,111 would be designated as Class A Common Shares of
par value of $0.021848 each and 1,513,889 be designated as Class B Common Shares of par value of $0.021848 each.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">In 2018, the Company issued an aggregate
of 34,375 common shares to a consultant under the Company&rsquo;s incentive plan for advice and services provided concerning the
Company&rsquo;s merger and acquisition planning, development and strategy implementation. The 34,375 common shares were issued
in two tranches including 17,187 common shares issued on February 21, 2018 and 17,188 common shares issued on March 5, 2018. The
fair value of the 34,375 common shares was $835,999, which was calculated based on the grant date stock price of $25.44 on February
21, 2018 and of $23.20 March 5, 2018. During the year ended December 31, 2018, the Company amortized $835,999 as consulting expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Also in 2018, the Company issued 25,000
common shares to a consulting firm for management consulting and advisory services to be provided for a period of 12 months up
to August 15, 2019. The fair value of these shares on the grant date based on the closing price was approximately $288,000. During
the year ended December 31, 2018 and 2019, the Company amortized $108,888 and $179,112 as consulting expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">At December 31, 2019 and 2018, the number of shares of Class
A common stock issued and outstanding was 836,933 and 836,933 respectively. At December 31, 2019 and 2018, the number of shares
of Class B common stock issued and outstanding was 1,388,888.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Statutory Surplus Reserves</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">A PRC company is required to make appropriations
to statutory surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles
of the PRC (&ldquo;PRC GAAP&rdquo;). Appropriations to the statutory surplus reserve is required to be at least 10% of the after-tax
net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entity&rsquo;s&rsquo; registered capital.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The statutory surplus reserve fund is non-distributable
other than during liquidation and can be used to fund previous years&rsquo; losses, if any, and may be utilized for business expansion
or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing
the par value of shares currently held by them, provided that the remaining statutory surplus reserve balance after such issue
is not less than 25% of the registered capital.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">No amount was allocated to the statutory
surplus reserve account as both the subsidiaries in China had incurred accumulated losses as of December 31, 2019 and 2018.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Stock Option Plan</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Under the employee stock option plan, the
Company&rsquo;s stock options generally expire ten years from the date of grant. On December 29, 2011, the Company entered into
five-year agreements with its employees and directors, pursuant to which, the Company issued an aggregate of 56,250 options at
an exercise price of $11.60 per share. The options vest in equal annual installments over the five years of the agreements ending
December 28, 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On October 7, 2013, pursuant to the Company&rsquo;s Share Incentive
Plan, the Company granted a non-statutory option to acquire 11,750 of the Company&rsquo;s common shares at an exercise price of
$18.40 per share to Mr. Ping Chen, the CEO of the Company. The options vest in equal annual installments over the five years of
the agreement ending October 6, 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On August 20, 2014, pursuant to the Company&rsquo;s Share Incentive
Plan, the Company granted additional option to acquire 16,375 of the Company&rsquo;s common shares at an exercise price of $42.48
per share to Mr. Ping Chen. The options vest in equal annual installments over the five years of the agreement ending August 19,
2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On August 7, 2015, the Company entered into two-year agreements
with its employees and directors, pursuant to which the Company issued an aggregate of 43,625 options at an exercise price of $13.12
per share. The options vest in equal annual installments over the two years of the agreements ending August 6, 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On March 21, 2016, the Company entered into
two-year agreements with its employees and directors, pursuant to which the Company issued an aggregate of 72,608 options at
an exercise price of $15.04 per share. The options vest in equal annual installments over the two years of the agreements ending
March 20, 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">In 2018, 1,375 options were exercised for cash to purchase 1,375
shares of the Company&rsquo;s common shares for an aggregate consideration of $17,851, and 5,000 options were exercised on a cashless
basis to purchase 1,000 common shares of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">As of December 31, 2019, all outstanding
options have been vested.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company valued the stock options using
the Black-Scholes model with the following assumptions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Expected</B><BR> <B>Terms&nbsp;(years)</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Expected <BR> Volatility</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Dividend <BR> Yield</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Risk Free<BR> Interest Rate</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Grant Date<BR> &nbsp;Fair Value<BR> &nbsp;Per share</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 20%; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">10</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 19%; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">126%-228%</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 19%; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">0%</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 19%; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">0.73%-1.65%</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 19%; text-align: center">$9.76-$41.20</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following is a summary of the option activity:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1.5pt solid">Stock options</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Shares</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted average <BR> exercise
    price</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Aggregate</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>intrinsic<BR>
                                         value <SUP>(1)</SUP></B></P></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%">Outstanding as of January 1, 2018</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">127,108</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">18.08</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Forfeited</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(10,500</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">Exercised</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(6,375</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Outstanding as of December 31, 2018</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">110,233</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">18.72</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Forfeited</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(10,875</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt">Exercised</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt">Outstanding as of December 31, 2019</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">99,358</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">19.20</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>(1)</SUP></FONT></TD>
    <TD STYLE="width: 97%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The intrinsic
    value of the stock options at December 31, 2019 is the amount by which the market value of the Company&rsquo;s common stock
    of $3.12 as of December 31, 2019 exceeds the exercise price of the options.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Following is a summary of the status of options outstanding
and exercisable at December 31, 2019:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Outstanding options</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Exercisable options</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Average <BR> exercise <BR> price</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Average <BR> remaining <BR> contractual<BR> life (years)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Average <BR> exercise<BR> price</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Average<BR> remaining <BR> contractual <BR> life (years)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 14%; text-align: right">11.60</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; text-align: right">13,125</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; text-align: right">2.00</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 14%; text-align: right">11.60</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; text-align: right">13,125</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: right">2.00</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">18.40</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,750</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.77</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">18.40</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,750</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.77</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">42.48</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,375</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.64</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">42.48</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,375</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.64</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">13.12</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,875</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.60</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">13.12</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,875</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.60</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">$</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">15.04</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">43,233</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">6.22</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">$</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">15.04</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">43,233</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">6.22</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">99,358</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">99,358</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">For the years ended December 31, 2019, 2018
and 2017, the Company recognized $69,176, $247,134 and $479,233 respectively, as compensation expense under its stock option plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">As of December 31, 2019, unrecognized share-based
compensation expense related to options was nil.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>14.</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>WARRANTS</B></FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On April 28, 2016, the Company signed Share Purchase Agreement
(&ldquo;SPA&rdquo;) with Hangzhou Lianluo. In this SPA, Hangzhou Lianluo is entitled with 125,000 warrants to acquire from the
Company 125,000 common shares at purchase price of $17.60 per share. The warrants will be exercisable at any time. The Company
recognized the warrants as a derivative liability because warrants can be settled in cash. Warrants are remeasured at fair value
with changes in fair value recorded in earnings in each reporting period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">There was a total of 125,000 warrants issued
and outstanding as of December 31, 2019 and 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The fair value of the outstanding warrants
was calculated using the Black Scholes Model with the following assumptions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1.5pt solid">Stock options</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%">Market price per share (USD/share)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">3.12</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">9.04</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">13.84</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Exercise price (USD/share)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17.60</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17.60</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17.60</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Risk free rate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.81</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.60</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.36</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Dividend yield</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Expected term/Contractual life (years)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.3</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7.3</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8.3</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Expected volatility</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">279.93</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">256.20</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">241.20</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>


<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The following is a reconciliation of the
beginning and ending balances of warrants liability measured at fair value on a recurring basis using Level 3 inputs:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left">Beginning balance</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,129,246</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,729,111</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,499,362</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Warrants issued to Hangzhou Lianluo</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Warrants redeemed</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Fair value change of the issued warrants included in earnings</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(739,616</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(599,865</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">229,749</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Ending balance</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">389,630</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,129,246</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,729,111</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The following is a summary of the warrants
activity:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted <BR> Average <BR>
    Exercise Price</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted Average<BR> &nbsp;Remaining
    <BR> Contractual Life&nbsp;(Years)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; padding-bottom: 1.5pt">Outstanding as of January 1, 2018</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">125,000</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">$</TD><TD STYLE="width: 9%; padding-bottom: 1.5pt; text-align: right">17.60</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; padding-bottom: 1.5pt; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Granted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Forfeited</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Exercised</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Redeemed</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Outstanding as of December 31, 2018</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">125,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">$</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">17.60</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Granted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Forfeited</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Exercised</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Redeemed</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Outstanding as of December 31, 2019</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">125,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">$</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">17.60</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B>15.</B></TD><TD STYLE="text-align: left"><B>SELLING EXPENSES</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company&rsquo;s selling expenses consist
of the followings:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Year ended December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left">Salaries and social welfare</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">761,774</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,765,019</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">805,048</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Travelling expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34,244</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">170,931</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">150,648</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Service fee</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,369</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">41,437</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">84,445</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Advertising &amp; Promotion</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,811</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">56,259</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">76,592</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Entertainment fee</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,848</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">42,656</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35,438</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Office expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,960</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,302</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">Others</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,224</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,567</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">10,905</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Total Selling expenses</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">835,270</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,082,829</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,170,378</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><B>16.</B></TD><TD STYLE="text-align: left"><B>GENERAL AND
                                         ADMINISTRATIVE EXPENSES</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company&rsquo;s general and administrative
expenses consist of the followings:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Year ended December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left">Salaries and social welfare</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,358,629</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,068,643</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">862,660</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Service fee</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">750,734</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,493,403</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">915,228</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Office expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">268,555</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">391,850</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">388,751</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Research &amp; Development</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">301,713</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">344,575</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Depreciation &amp; Amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">138,811</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">79,177</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">31,739</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Stock compensation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">69,176</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">247,134</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">479,233</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Entertainment fee</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,176</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,593</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Travel Expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,056</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,902</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">75,080</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">Others</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,671</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">53,050</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">94,764</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Total General and administrative expenses</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,593,808</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,675,465</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,192,030</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>17.</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>LOSS
                                         PER SHARE</B></FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The following is a reconciliation of the
basic and diluted loss per share computation for the years ended December 31, 2019 and 2018:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Year ended December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left">Net loss attributable to the Company&rsquo;s common shareholders</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(4,450,994</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(8,910,002</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(5,136,434</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Weighted average shares outstanding &ndash; Basic and diluted</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,225,821</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,202,176</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,164,071</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Loss per share &ndash; Basic and diluted</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(2.00</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(4.05</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(2.37</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company has been authorized to issue
Class A and Class B common stock. The two classes of common stock are substantially identical in all material respects, except
for voting rights. Since the Company did not declare any dividends during the years ended December 31, 2019 and 2018, the net
loss per common share attributable to each class is the same under the &ldquo;two-class&rdquo; method. As such, the two classes
of common stock have been presented on a combined basis in the consolidated statements of operations and comprehensive income
and in the above computation of net loss per common share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">For the years ended December 31, 2019, 2018
and 2017, all the outstanding warrants and options were anti-dilutive.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>18.</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>INCOME
                                         TAXES</B></FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>British Virgin Islands</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Lianluo Smart is a tax-exempt company incorporated
in the British Virgin Islands.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>PRC</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">PRC enterprise income tax is calculated based
on the Enterprise Income Tax Law (the &ldquo;EIT Law&rdquo;). Under the EIT Law, a unified enterprise income tax rate of 25% and
unified tax deduction standards will be applied equally to both domestic-invested enterprises and foreign-invested enterprises.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Under the current PRC laws, PRC government
grants a preferential income tax rate of 15% to government-certified high technology companies, and under the new standard the
period of validity for the certification of high technology companies is three years. In 2009, 2012 and 2015, Beijing Dehaier
updated its certification for &ldquo;high technology&rdquo; company. Therefore, Beijing Dehaier used a 15% income tax rate to
calculate the income tax expense for the years ended December 31, 2017, 2016 and 2015. In 2018, Beijing Dehaier did not pass the
certification for &ldquo;high technology&rdquo; company, and therefore, is subject to a PRC income tax rate of 25% on its 2018
income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The tax rate for Lianluo Connection is 25%.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The BVI and PRC components of loss before
income taxes consisted of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Years Ended December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="10" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; padding-left: 1.5pt">BVI</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(1,385,394</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(957,973</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(1,724,488</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; padding-left: 1.5pt">PRC</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,065,600</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(7,952,029</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,411,946</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt; padding-left: 0.125in">Loss before income taxes</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(4,450,994</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(8,910,002</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(5,136,434</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The income taxes (benefit) provision for the years presented
is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Years Ended December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="10" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 1.5pt">Current:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; padding-left: 9pt">BVI</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; padding-left: 9pt">PRC</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; padding-left: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 1.5pt">Deferred:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 9pt">BVI</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; padding-left: 9pt">PRC</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt; padding-left: 15pt">Income taxes (benefit) provision</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">A reconciliation of the provision for income
taxes determined at the statutory income tax rate to the Company&rsquo;s income taxes is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Years ended December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left">Loss before provision for income tax and non-controlling interests</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(4,450,994</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(8,910,002</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(5,136,434</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">PRC corporate income tax rate</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">25</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">25</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">25</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Income tax benefit computed at PRC statutory corporate income tax rate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,112,749</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,227,500</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,284,108</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Reconciling items:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt">Allowances and reserves</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,414</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,940</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">126,090</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Impairment on intangible assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">818,935</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt">BVI tax rate and PRC tax law differential</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">346,349</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">239,493</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">431,122</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Others</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,828</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">39,977</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt">Valuation allowance on deferred tax assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">705,158</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,163,832</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">686,919</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt">Income tax benefit</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Deferred taxes assets</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Deferred tax assets and liabilities are recognized
for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective
tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. The tax effects of
temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of December 31, 2019
and 2018 are presented below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; width: 76%; font-weight: bold; text-align: left">Deferred tax assets</TD><TD STYLE="padding-bottom: 1.5pt; width: 1%">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; width: 1%; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; width: 9%; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; width: 1%; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; width: 1%">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; width: 1%; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; width: 9%; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; width: 1%; text-align: left">&nbsp;</TD></TR>

<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Allowances and reserves</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">155,354</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">134,940</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Impairment on intangible assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">818,935</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">818,935</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Net operating loss carried forward</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,789,703</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,458,463</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Valuation reserve</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4,763,992</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,412,338</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Deferred tax assets, non-current</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">As of December 31, 2019, the Company&rsquo;s
PRC subsidiaries had net operating loss carry forwards of $15,158,812, which will expire in various years through year 2024. Management
believes it is more likely than not that the Company will not realize these potential tax benefits as these operations will not
generate any operating profits in the foreseeable future. As a result, a valuation reserve was provided against the full amount
of the potential tax benefits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Uncertain tax position</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The accounting for uncertain tax positions
prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return. The Company is required to recognize in the financial statements the impact
of a tax position, if that position is more-likely than-not of being sustained on audit, based on the technical merits of the
position. The Company recorded a net charge for unrecognized tax benefits in 2019 and 2018 of $0 and $0, respectively.&nbsp;The
Company includes interest and penalties related to unrecognized tax benefits, if any, within the benefit from (provision for)
income taxes.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Company only files income tax returns
in PRC. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment
of taxes is due to computational errors made by the taxpayer or its withholding agent. The statute of limitations extends to five
years under special circumstances, which are not clearly defined. In the case of a related party transaction, the statute of limitations
is ten years. There is no statute of limitations in the case of tax evasion.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>19.</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>RELATED
                                         PARTY TRANSACTIONS AND BALANCE</B></FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">In addition to the transactions and balances
disclosed elsewhere in these financial statements, the Company had the following material related party transactions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
                                         the years ended December 31, 2019, 2018 and 2017, the Company purchased from Hangzhou
                                         Lianluo, its controlling shareholder, and subsidiary of $42,000, $204 and $3,760, respectively.
                                         As of December 31, 2019, the Company reported $42,000 payable to Hangzhou Lianluo and
                                         subsidiary.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">(2)</TD><TD STYLE="text-align: left">During the years ended
                                         December 31, 2019, 2018 and 2017, the Company sold equipment of $9,588, $nil and $nil
                                         to a related party company in which its previous CEO Mr. Ping Chen holds 51% ownership
                                         in, respectively. As of December 31, 2019, the Company reported an outstanding receivable
                                         of $10,708 due from the related party company</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0px"></TD>
    <TD STYLE="width: 24px; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
    July 1, 2018, the Company leased office premises from Hangzhou Lianluo for a period of 1 year, with an annual rental of $84,447
    (RMB580,788). Rental payments charged as expenses in 2019 and 2018 were $35,892 and $39,942, respectively. As of December
    31, 2019, the Company reported an outstanding rental payable of $75,834 to Hangzhou Lianluo.</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">(4)</TD><TD STYLE="text-align: left">Short-term borrowing
                                         from related party companies:</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">i) Borrowings from Hangzhou Lianluo</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of December 31, 2019, the loan balance consists of the following
from Hangzhou Lianluo:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0; border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold">No.</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Principal (USD)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">From</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">To</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 15%; text-align: left; padding-left: 0">1</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 24%; text-align: right">57,320</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 28%; text-align: center; padding-left: 5.4pt">February 2, 2019</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 28%; text-align: center; padding-left: 5.4pt">February 1, 2020</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0">2</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,361</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">March 7, 2019</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">March 6, 2020</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0">3</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">85,980</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">April 8, 2019</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">April 7, 2020</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0">4</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">57,320</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">June 27, 2019</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">June 26, 2020</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0">5</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">56,942</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">July 19, 2019</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">July 18, 2020</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0">6</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,154</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">July 22, 2019</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">July 21, 2020</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0">7</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">145,854</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">August 6, 2019</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">August 6, 2020</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0">8</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">71,650</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">May 20, 2019</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">May 19, 2020</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; text-align: left; padding-left: 0">9</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">419,869</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt; padding-left: 5.4pt">May 21, 2019</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt; padding-left: 5.4pt">May 20, 2020</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; font-weight: bold; padding-bottom: 4pt; padding-left: 0">Total</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">931,450</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 4pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">During 2019, the Company borrowed $942,500
from Hangzhou Lianluo, repaid $0; the loans are non-interest bearing. In addition, the above loans due at February 1, 2020, March
6 and April 7, 2020 has been extended, interest-free and without specific repayment date, which is based upon both parties&rsquo;
agreement as of the date of this report.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">As of December 31, 2018, the loan balance
was zero. During 2018, the Company borrowed $3,682,592 carrying an annual interest rate of 5%-8% and was fully settled through
debt offset agreement among the Company, Hangzhou Lianluo and DGHKT. Debt offset agreements refer to below iv) Borrowings to DGHKT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">ii) Borrowings from DGHKT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of December 31, 2019, the loan balance consists of the following
from DGHKT, an affiliate of Hangzhou Lianluo:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-left: 0; text-align: left; font-weight: bold; text-indent: 0">No.</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Principal (USD)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">From</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">To</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: 0; width: 15%; text-align: left; padding-left: 0">1</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 24%; text-align: right">5,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 28%; text-align: center; padding-left: 5.4pt">May 20, 2019</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 28%; text-align: center; padding-left: 5.4pt">May 19, 2020</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: 0; text-align: left; padding-left: 0">2</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">November 28, 2019</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">November 27, 2020</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: 0; text-align: left; padding-left: 0">3</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">December 5, 2019</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">December 4, 2020</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: 0; padding-bottom: 1.5pt; text-align: left; padding-left: 0">4</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt; padding-left: 5.4pt">December 24, 2019</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1.5pt; padding-left: 5.4pt">December 23, 2020</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: 0; text-align: left; font-weight: bold; padding-bottom: 4pt; padding-left: 0">Total</TD><TD STYLE="font-weight: bold; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">33,000</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 4pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During 2019, the Company borrowed $33,000 interest free, and
repaid $0 in principal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">iii) Borrowings from Mr. Ping Chen:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">During 2019, the Company borrowed from Mr.
Ping Chen, its previous CEO, free of interest to fund its operation. During 2019, 2018 and 2017, the borrowings were $387,182,
nil and nil, and Mr. Ping Chen forgave a debt of $143,301 d in 2019. The balances were $243,881, nil and nil as of December 31,
2019, 2018 and 2017, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">iv) Borrowings to DGHKT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On March 15, 2018, the Company entered into
a $6 million loan agreement with DGHKT (an affiliate of Hangzhou Lianluo) for a term of 12 months. The Company also borrowed RMB34.3
million (equivalently $5.20 million) from Hangzhou Lianluo, its principal shareholder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Pursuant to an agreement dated December 27,
2018, the Company, DGHKT, Hangzhou Lianluo agreed that the outstanding amount owed by DGHKT to us of RMB35.6 million be repaid
by Hangzhou Lianluo on behalf of DGHKT, to the Company. This repayment is agreed to be settled in the form of offset against the
amount owed by the Company to Hangzhou Lianluo of RMB35.6 million (equivalent to $5.2 million). As a result, the Company no longer
owed or were owed by Hangzhou Lianluo or DGHKT any amount as of December 31, 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>20.</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>CONCENTRATIONS</B></FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Major Customers</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">For the year ended December 31, 2019, two
customers each accounted for approximately 21% and 15%, respectively, of the Company&rsquo;s revenues. For the year ended December
31, 2018, two customers each accounted for approximately 16% and 13%, respectively, of the Company&rsquo;s revenues. For the year
ended December 31, 2017, two customers accounted for approximately 44% and 12%, respectively, of the Company&rsquo;s revenues.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>Major Suppliers</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">For the year ended December 31, 2019, one
supplier accounted for 100% of the Company&rsquo;s purchases. For the year ended December 31, 2018, two suppliers each accounted
for approximately 31% and 17% respectively, of the Company&rsquo;s purchases. For the year ended December 31, 2017, two suppliers
each accounted for approximately 40% and 23%, respectively, of the Company&rsquo;s purchases.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Revenues by categories</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following represents the revenues by categories, all derived
from China:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the years ended<BR>
    December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt; text-align: left"><U>Categories</U></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">Product sales</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left; text-indent: 14.2pt">Medical Devices</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">58,750</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">221,414</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">827,032</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 14.2pt">Mobile Medicine (sleep apnea diagnostic products)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">153,644</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">120,930</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">54,979</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">OSAS service (analysis and detection)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">171,064</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">217,042</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">Total Revenues</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">383,458</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">559,386</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right">882,011</TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<!-- Field: Page; Sequence: 282; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->48<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>21.</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>SUBSEQUENT
                                         EVENTS</B></FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 4.2pt 0pt 0; text-align: left">1) Litigation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On May 9, 2019, Tianjin Wuqing Bohai Printing
Co., Ltd. (&ldquo;Wuqing Bohai&rdquo;) filed an arbitration application with Beijing Arbitration Commission against Beijing Dehaier,
claiming that Beijing Dehaier failed to pay for goods in accordance with purchase contracts entered into with Wuqing Bohai in
2017 and 2018 and requested Beijing Dehaier to pay Wuqing Bohai an amount of RMB119,770 (approximately $17,450), plus RMB10,000
(approximately $1,457) to cover the expenses&nbsp;of&nbsp;keeping goods that Beijing Dehaier failed to accept. On June 5, 2019,
Beijing Dehaier submitted an answer to compliant, noting that it had not received some of the goods under the contracts and Wuqing
Bohai failed to provide invoices for some of the goods allegedly received by Beijing Dehaier. Beijing Dehaier submitted that it
should only be responsible for the purchase value of RMB48,450 (approximately $7,059). On March 6, 2020, the Beijing Arbitration
Commission entered an award, ordering that Beijing Dehaier pay Wuqing Bohai the disputed amount of RMB119,770 (approximately $17,203)
and an arbitration fee of RMB10,443 (approximately $1,500) by March 24, 2020 and dismissed other claims of Wuqing Bohai.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">2) Equity Financing</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On February 14, 2020, the Company consummated a registered direct
offering of 323,750 Class A Common Shares and a concurrent private placement of warrants to purchase up to 323,750 Class A Common
Shares with certain accredited investors. The purchase price per Class A Common Share in the registered direct offering was $6.80.
The warrants sold in the concurrent private placement are exercisable for a period of five and one-half years upon issuance, at
an initial exercise price of $6.80 per share, which was thereafter adjusted to $4.9912, subject to full ratchet anti-dilution protection.
On February 25, 2020, we consummated a second registered direct offering of 437,500 Class A Common Shares and a concurrent private
placement of warrants to purchase up to 437,500 Class A Common Shares with the same accredited investors. The purchase price per
Class A Common Share in the second registered direct offering was $5.60. The warrants sold in the second concurrent private placement
are exercisable for a period of five and one-half years upon issuance, at an initial exercise price of $5.60 per share, subject
to anti-dilution protections. On March 2, 2020, we consummated a third registered direct offering of 612,500 Class A Common Shares
and a concurrent private placement of warrants to purchase up to 612,500 Class A Common Shares with the same accredited investors.
The purchase price per Class A Common Share in this registered direct offering was $5.60 per share. The warrants sold in the third
concurrent private placement are exercisable for a period of five and one-half years upon issuance, at an initial exercise price
of $5.60 per share, subject to anti-dilution protections.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The above equity financings, after deducting
the placement agent&rsquo;s commissions and other expenses, generated net proceeds of approximately $7.2 million for the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The following table presents the Company&rsquo;s
balance sheet as of December 31, 2019 on a pro forma basis to give effect to the issuance and sale of 1,373,750 Class A Common
Shares in the foregoing three registered direct offerings:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">As of December 31, 2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Audited</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">equity financing</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Pro
    Forma</B></FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left; padding-bottom: 1.5pt">Cash and cash equivalents</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">22,834</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">7,168,195</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">7,191,029</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Total Current Liabilities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,233,112</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,233,112</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Stockholders&rsquo; equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Class A Common Shares,</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,285</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,015</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">48,300</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Class B Common Shares</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,345</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,345</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Additional paid-in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,833,249</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,138,180</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">47,971,429</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Accumulated deficit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(44,607,198</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(44,607,198</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Accumulated other comprehensive income</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,436,530</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,436,530</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Total shareholders&rsquo; (deficit) equity</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,288,789</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,879,406</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Total capitalization</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(1,288,789</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">5,879,406</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">3) Impact of COVID-19</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On January 30, 2020, the World Health Organization
(&ldquo;WHO&rdquo;) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the
&ldquo;COVID-19 outbreak&rdquo;) and the risks to the international community as the virus spreads globally beyond its point of
origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The full impact of the COVID-19 outbreak
continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have
on the Company&rsquo;s financial condition, liquidity, and future results of operations. Management is actively monitoring the
global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution
of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19
outbreak on its results of operations, financial condition, or liquidity for fiscal year 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">As a result of these events, the Company
assessed the near-term operations, working capital, finances and capital formation opportunities, and implemented, in late December
2019 and early February 2020, a downsizing of our operations, including workforce reductions, reductions of salaried employee
compensation and a reduction of hours worked to preserve cash resources, cut costs and focus the operations on customer-centric
sales and project management activities. The extent to which COVID-19 will impact the business and financial results will depend
on future developments, which are uncertain and cannot be predicted at this time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The service was suspended due to restrictions
and hospital closures except for essential services in February 2020 and recovered gradually in March 2020 as hospitals began
to resume business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">4) Staff termination</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">In 2019, Beijing Dehaier and Lianluo Connection
have terminated the employment of over 50 employees due to the business downturn. 34 of these former employees filed complaints
with Beijing Changping District Employment Dispute Arbitration Commission and Beijing Shijingshan District Employment Dispute
Arbitration Commission, respectively, claiming that Beijing Dehaier and Lianluo Connection failed to pay them, among others, certain
salaries, overtime fees and compensations upon terminations. As of the date of this report, Beijing Dehaier and Lianluo Connection
have entered into settlement agreements with 30 former employees and settled disputes through negotiations with the rest of these
employees. The settlement amount was RMB2,435,582 (approximately $349,019) and has been recorded in the financial statements of
the first quarter of 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">5) Debt Extension</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">As mentioned in Note 19 the Company has a
borrowing of $931,450 due from Hangzhou Lianluo as of December 31, 2019. The loans due at February 1, 2020, March 6 and April
7, 2020, totaling $167,661, were extended, interest-free and without specific repayment date, which is based upon both parties&rsquo;
agreement as of the date of this report.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">6) Change of CEO and Directors</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On April 1, 2020, Mr. Ping Chen resigned
from his positions as Chief Executive Officer and director of Lianluo Smart Limited (the &ldquo;Company&rdquo;), effectively immediately.
Mr. Chen&rsquo;s resignation was due to personal reasons and not because of any disagreement with the Company on any matter relating
to the Company&rsquo;s operations, policies or practices.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On the same date, the Board of Directors
of the Company appointed Mr. Zhitao He as Chief Executive Officer of the Company. Mr. He has served as chairman and director of
the Company since October 2016. The Board of Directors also appointed the Company&rsquo;s Interim Chief Financial Officer, Ms.
Yingmei Yang, as a director to fill the vacancy created by Mr. Chen&rsquo;s resignation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On April 24, 2020, Mr. Xiaogang Tong resigned
from his positions as an independent director and member of each committee of the Board of Directors of Lianluo Smart Limited
(the &ldquo;Company&rdquo;), effectively immediately. Mr. Tong&rsquo;s resignation was due to personal reasons and not because
of any disagreement with the Company on any matter relating to the Company&rsquo;s operations, policies or practices.&#9;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">On the same date, the Board of Directors
of the Company appointed Mr. Fuya Zheng (&ldquo;Mr. Zheng&rdquo;) as a director, member of each of Audit Committee, Compensation
Committee and Nominating Committee and Chair of Audit Committee of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;<B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="finegg_001"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>UNAUDITED
CONSOLIDATED FINANCIAL STATEMENTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>FOR
THE SIX MONTHS ENDED JUNE 30, 2020 AND 2019</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="finegg_002"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated
Balance Sheets</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(In
thousands, except par value) (Unaudited)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif; text-align: center">Assets</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">June
    30, <BR> 2020</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">December&nbsp;31,
    <BR> 2019</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">Current assets:</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Cash and cash equivalents</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">141,855</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">79,750</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Restricted cash</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">837</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">797</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Accounts receivable, net</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">38,147</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">54,185</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt">Inventories</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">142,275</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">109,509</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Income taxes receivable</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,510</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,521</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Prepaid expenses and other current
    assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">20,061</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">14,206</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Due from
    related parties</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">21,854</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">21,654</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -9pt; padding-left: 45pt">Total current
    assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">367,539</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">282,622</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Property and equipment, net</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">45,098</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">47,130</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Noncurrent deferred tax assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">403</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1,041</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Equity investment</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">6,457</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">6,457</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Investment at cost</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">15,000</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">15,000</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Right of use assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">31,459</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">38,099</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Other noncurrent assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">7,051</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">6,448</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 45pt">Total
    assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">473,007</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">396,797</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">Liabilities, Temporary Equity and Equity</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Current liabilities:</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Accounts payable</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">221,876</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">165,653</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Accrued liabilities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">46,693</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">49,396</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Deferred revenue</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">36,975</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">25,846</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt">Line of credit</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">6,510</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">6,379</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Current portion of long-term debt</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">269</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">258</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Lease liabilities
    - current</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">8,503</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">8,585</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -9pt; padding-left: 45pt">Total current
    liabilities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">320,826</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">256,117</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Long-term debt, less current portion</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,153</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,223</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Income taxes payable</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">675</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">675</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Lease liabilities - noncurrent</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">24,556</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">30,643</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Other liabilities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">66</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">66</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 45pt">Total
    liabilities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">348,276</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">289,724</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Commitments and contingencies (note 15)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Temporary Equity:</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -9pt; padding-left: 27pt">Series AA convertible Preferred
    Stock, $.001 par value; 25,890 shares authorized as of both June 30, 2020 and December 31, 2019; 24,870 shares issued and
    outstanding as of both June 30, 2020 and December 31, 2019</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">187,146</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">187,146</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 27pt">Series
    A convertible Preferred Stock, $.001 par value; 59,000 shares authorized; 36,476 shares issued and outstanding as of both
    June 30, 2020 and December 31, 2019</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">655</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">655</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt; padding-left: 27pt">Total Temporary
    Equity</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">187,801</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">187,801</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Equity (deficit):</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -9pt; padding-left: 27pt">Class A Common Stock, $.001 par
    value; 142,000 shares authorized; 849 shares issued and outstanding as of both June 30, 2020 and December 31, 2019</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -9pt; padding-left: 27pt">Class B Common Stock, $.001 par
    value; 59,000 shares authorized; none issued or outstanding as of June 30, 2020 and December 31, 2019</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -9pt; padding-left: 27pt">Additional paid-in
    capital</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">735</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">744</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -9pt; padding-left: 27pt">Accumulated
    other comprehensive loss</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(1,777</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(505</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 27pt">Accumulated
    deficit</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(62,029</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(80,968</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 45pt">Total
    equity (deficit)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(63,070</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(80,728</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 4pt; padding-left: 0.5in">Total liabilities,
    temporary equity and equity</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">473,007</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">396,797</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
accompanying notes to consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="finegg_003"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated
Statements of Operations</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(In
thousands, except per share data) (Unaudited)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> Six Months Ended<BR> June
    30, </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 2020 </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 2019 </TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left"> Net sales </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 9%; text-align: right"> 862,700 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 9%; text-align: right"> 797,426 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt"> Cost of sales </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 738,122 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 718,807 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Gross profit </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 124,578 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 78,619 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Other operating income </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 264 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 28 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt"> Selling, general, and administrative expenses </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 107,138 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 115,504 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Income (loss) from operations </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 17,704 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (36,857 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Interest income </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 590 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 242 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Interest expense </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (378 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2,025 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"> Other income, net </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2,790 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3,478 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt"> Gain from sale of and equity income from equity method investments </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 24,098 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt"> Income (loss) before provision for income taxes </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 20,706 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> (11,064 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt"> Provision for income taxes </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 1,767 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 4,405 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt"> Net income (loss) </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> 18,939 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> (15,469 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt"> Less: undistributed net
    income allocable to Series A and Series AA convertible Preferred Stocks </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> (18,682 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left; padding-bottom: 4pt"> Undistributed net income
    (loss) allocable to common stockholders of Newegg Inc. for basic earnings per share </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> 257 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> (15,469 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt"> Basic earnings (loss) per share </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> 0.30 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> (18.22 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt"> Diluted earnings (loss) per share </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> 0.16 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"> (18.22 </TD><TD STYLE="padding-bottom: 4pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD> Weighted average shares used in computation of earnings per share: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt"> Basic </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 849 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 849 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 9pt"> Diluted </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1,577 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 849 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
accompanying notes to consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="finegg_004"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated
Statements of Comprehensive Income (Loss)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(In
thousands) (Unaudited)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Six
    Months Ended <BR> June 30,</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left">Net income (loss)</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">18,939</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">(15,469</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Foreign currency translation
    adjustments</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(1,272</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(2,285</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 4pt; padding-left: 9pt">Comprehensive
    income (loss)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">17,667</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(17,754</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
accompanying notes to consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="finegg_005"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated
Statements of Temporary Equity and Equity (Deficit)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(In
thousands) (Unaudited)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">Series AA</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">Series A</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">convertible</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">convertible</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">Class A</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">Accumulated</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">(Accumulated</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">preferred</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">preferred</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">Total</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">common</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">Additional</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">other</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">deficit)/</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">stock</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">stock</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif; text-align: center">temporary</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">stock</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif; text-align: center">paid-In</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif; text-align: center">comprehensive</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif; text-align: center">Retained</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif; text-align: center">Total</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Shares</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Shares</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">equity</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Shares</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Par&nbsp;value</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">capital</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">income</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">earnings</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">equity</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; width: 45%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">Balance
    at December 31, 2018</TD><TD STYLE="width: 0%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="width: 0; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">24,870</TD><TD STYLE="width: 0; padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 0%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="width: 0; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 5%; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">187,146</TD><TD STYLE="width: 0; padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 0%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="width: 0; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">36,476</TD><TD STYLE="width: 0; padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 0%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="width: 0; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 5%; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">655</TD><TD STYLE="width: 0; padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 0%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="width: 0; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 5%; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">187,801</TD><TD STYLE="width: 0; padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 0%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="width: 0; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 5%; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">849</TD><TD STYLE="width: 0; padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 0%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="width: 0; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 5%; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1</TD><TD STYLE="width: 0; padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 0%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="width: 0; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 5%; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="width: 0; padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 0%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="width: 0; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 5%; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">628</TD><TD STYLE="width: 0; padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 0%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="width: 0; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 5%; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(63,977</TD><TD STYLE="width: 0; padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="width: 0%; font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="width: 0; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 5%; border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(63,348</TD><TD STYLE="width: 0; padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Net loss</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(15,469</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(15,469</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 0.25in">Other
    comprehensive income</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(2,285</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(2,285</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt; padding-left: 0.25in">Stock-based
    compensation</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">371</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">371</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">Balance
    at June 30, 2019</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">24,870</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">187,146</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">36,476</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">655</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">187,801</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">849</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">371</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(1,657</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(79,446</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(80,731</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Net loss</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(1,522</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(1,522</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 0.25in">Other
    comprehensive loss</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1,152</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1,152</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt; padding-left: 0.25in">Stock-based
    compensation</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">373</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">373</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">Balance
    at December 31, 2019</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">24,870</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">187,146</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">36,476</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">655</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">187,801</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">849</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">744</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(505</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(80,968</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(80,728</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Net income</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">18,939</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">18,939</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 0.25in">Other
    comprehensive loss</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(1,272</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(1,272</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt; padding-left: 0.25in">Stock-based
    compensation</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(9</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(9</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">Balance
    at June 30, 2020</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">24,870</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">187,146</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">36,476</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">655</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">187,801</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">849</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">735</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(1,777</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(62,029</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(63,070</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
accompanying notes to consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="finegg_006"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated
Statements of Cash Flows</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(In
thousands) (Unaudited)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Six
    Months Ended <BR> June 30,</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">Cash flows from operating activities:</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Net income (loss)</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">18,938</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">(15,469</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Adjustments to reconcile net loss
    to net cash provided by (used in) operating activities:</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 0.25in">Depreciation and amortization</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">4,508</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">5,449</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 0.25in">Bad debt expense</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">466</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">227</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 0.25in">Provision for obsolete and excess
    inventory</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">983</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">3,760</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 0.25in">Stock-based compensation</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(9</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">371</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 0.25in">Gain on equity method investment</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(24,098</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 0.25in">Deferred income taxes</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">638</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(56</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 0.25in">Loss on disposal of property
    and equipment</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">77</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">482</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 0.25in">Changes in operating assets and
    liabilities:</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 27pt">Accounts receivable</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">15,528</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">38,970</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 27pt">Inventories</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(33,945</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">85,537</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 27pt">Prepaid expenses and other assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(6,361</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">3,286</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 27pt">Accounts payable</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">56,031</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(113,947</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 27pt">Accrued liabilities and other liabilities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(2,855</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(15,291</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 27pt">Deferred revenue</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">11,072</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(14,651</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt; padding-left: 27pt">Dues from
    affiliate</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(201</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(750</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 27pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt; padding-left: 0.5in">Net cash
    provided by (used in) operating activities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">64,870</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(46,181</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 0.5in">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Cash flows from investing activities:</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Payments to acquire property and
    equipment</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(2,609</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(6,227</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Proceeds on disposal of property
    and equipment</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">78</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">15</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Sale of equity
    method investment</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">61,000</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt; padding-left: 0.5in">Net cash
    provided by (used in) investing activities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(2,531</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">54,788</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 0.5in">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Cash flows from financing activities:</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Borrowings under line of credit</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">20,000</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">93,291</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Repayments under line of credit</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(20,000</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(72,816</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Repayments of long-term debt</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(131</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(13,120</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Loan from affiliate</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">15,000</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Repayment
    of loan from affiliate</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(15,000</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt; padding-left: 0.5in">Net cash
    provided by (used in) financing activities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(131</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">7,355</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 0.5in">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Foreign currency effect on cash, cash equivalents and
    restricted cash</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(63</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(794</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 0.5in">Net increase in cash, cash equivalents
    and restricted cash</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">62,145</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">15,168</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 0.5in">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Cash, cash equivalents and restricted cash:</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt; padding-left: 9pt">Beginning of period</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">80,547</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">56,679</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; padding-left: 9pt">End of period</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">142,692</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">71,847</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Supplemental disclosures of cash flow information:</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Cash paid for interest</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">957</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1,744</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 9pt">Cash paid (refund) for income taxes</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">131</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(442</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
accompanying notes to consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="finegg_007"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(1)</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Organization
    and Description of Business</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
Inc. (&ldquo;Newegg&rdquo; or the &ldquo;Company&rdquo;) is an electronics-focused e-retailer that offers customers a comprehensive
selection of the latest consumer electronics products, detailed product descriptions and images, &ldquo;how-to&rdquo; information,
and customer reviews via its websites. The Company&rsquo;s strategic focus is based on three key areas: (1) providing a differentiated
and superior online shopping experience, (2) offering reliable and timely product fulfillment, and (3) delivering superior customer
service.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company was incorporated as Newegg Computers in the state of California on February&nbsp;4, 2000. In June&nbsp;2005, Newegg
Inc. was incorporated in the state of Delaware. On September&nbsp;29, 2005, Newegg Computers was merged into Newegg Inc.
under Delaware law with Newegg Inc. being the surviving company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
August&nbsp;2016, the Company entered into a share purchase agreement (the &ldquo;Purchase Agreement&rdquo;) with Hangzhou
Liaison Interactive Information Technology Co., Ltd, (&ldquo;Liaison&rdquo;), a publicly traded company in China. The transaction
was completed on March 30, 2017. Pursuant to the Purchase Agreement, Liaison purchased 490,706&nbsp;shares of Class&nbsp;A Common
Stock and 12,782,546&nbsp;shares of Series&nbsp;A convertible Preferred Stock from existing shareholders for a total consideration
of $91.9&nbsp;million. Additionally, the Company issued, and Liaison purchased, 24,870,027&nbsp;shares of Series&nbsp;AA Convertible
Preferred Stock for a total consideration of $172.2&nbsp;million. Upon the close of this transaction, Liaison, through Digital
Grid (Hong Kong) Technology Co., Limited (&ldquo;Digital Grid&rdquo;), a fully-owned subsidiary of Liaison, became the majority
owner of the Company. See Note 12 &ndash;Convertible Preferred Stock for further discussion about the Company&rsquo;s accounting
treatment for this transaction.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table details our subsidiaries as of June 30, 2020.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="width: 84%; border-bottom: black 1.5pt solid; font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt"><B>Subsidiary</B></FONT></TD>
    <TD STYLE="width: 1%; padding-bottom: 1.5pt; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="width: 15%; border-bottom: black 1.5pt solid; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt"><B>Jurisdiction</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">CAOPC, Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">United States</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Chief Value Limited</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">Hong Kong</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">ChiefValue.com Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">United States</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">INOPC, Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">United States</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Magnell Associate, Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">United States</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Australia Pty Ltd</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">Australia</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Business Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">United States</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Canada Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">Canada</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Capital Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">Taiwan</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Capital International</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">Cayman Islands</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg China Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">Cayman Islands</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Commerce (SH) Co., Ltd</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">China</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Enterprises LLC</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">United States</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Europe, Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">Cayman Islands</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Greater China (Hong Kong) Company Limited</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">Hong Kong</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg International, Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">Cayman Islands</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Logistics Services Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">United States</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg North America Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">United States</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Staffing Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">United States</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Taiwan Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">Taiwan</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Tech (Chengdu) LTD</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">China</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Tech (China) Co., Ltd.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">China</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Tech (Shanghai) Co., Ltd.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">China</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Tech (Xian) Co., Ltd.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">China</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Tech Corporation</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">Cayman Islands</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Tech Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">Cayman Islands</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Tech Research and Development Limited</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">Hong Kong</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Tech Services (Shanghai) Co., Ltd.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">China</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Tech Support (Shanghai) Co. Ltd.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">China</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Tech Support Limited</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">Hong Kong</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Tech, Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">United States</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Texas., Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">United States</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Trading (China) Co. Ltd.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">China</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg Trading Limited</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">Hong Kong</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg UK, Ltd.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">United Kingdom</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Newegg.com Americas Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">United States</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">NJOPC, Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">United States</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Nutrend Automotive Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">United States</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">OZZO Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">United States</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">OZZO International</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">Cayman Islands</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">OZZO International Limited</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">Hong Kong</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">OZZO Logistics (China) Co., Ltd.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">China</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Pure Cleaning, Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">United States</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Rosewill Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">United States</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">Rosewill Limited</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">Hong Kong</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman,serif"><FONT STYLE="font-size: 10pt">TNOPC, Inc.</FONT></TD>
    <TD STYLE="font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 10pt">United States</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(2)</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Summary
    of Significant Accounting Policies</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(a)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Principles
    of Consolidation</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying unaudited consolidated financial &nbsp;&nbsp;statements are prepared in accordance with accounting principles generally
accepted in the United States of America and include the accounts of all consolidated subsidiaries. All intercompany balances
and transactions have been eliminated in consolidation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(b)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Use
    of Estimates</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
preparation of the Company&rsquo;s consolidated financial statements in conformity with U.S.&nbsp;generally accepted accounting
principles requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements
and accompanying notes. Estimates are used for, but not limited to, revenue recognition, incentives earned from vendors, investment
valuation, and stock-based compensation. Actual results could differ from such estimates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of June 30, 2020, the effects of the ongoing COVID-19 pandemic on our business, results of operations, and financial condition
continue to evolve. As a result, many of our estimates and assumptions required increased judgment and carry a higher degree of
variabilities and volatility. As additional information become available, our estimates may change materially in future periods.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(c)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Change
    in Accounting Principle</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842), as amended (&ldquo;ASU 2016-02&rdquo;), which requires lessees
to recognize a right-of-use (&ldquo;ROU&rdquo;) asset and lease liabilities on the balance sheet for most lease arrangements and
expands disclosures about leasing agreements, among other items. The Company adopted ASU 2016-02 using the modified retrospective
transition approach through a cumulative-effect adjustment, which after completing the implementation analysis, resulted in no
adjustment to the Company&rsquo;s January 1, 2019 beginning retained earnings balance. On January 1, 2019, the Company recognized
$26.4 million of ROU operating lease assets and $28.7 million of operating lease liabilities, including noncurrent operating lease
liabilities of $21.0 million, as a result of the adoption. The difference between the ROU operating lease assets and the operating
lease liabilities was primarily due to previously accrued rent expense relating to periods prior to January 1, 2019, and the remaining
prepaid rent balance as of December 31, 2018. The adoption of ASU 2016-02 did not have an impact on the Company&rsquo;s consolidated
results of operations or cash flows.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
part of the adoption, the Company elected the package of practical expedients, which among other things, permits the Company to
not reassess whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing
leases, and the initial direct costs for any existing leases. The Company also elected the practical expedient to not assess whether
existing land easements that were not previously accounted for as lease are or contain a lease under the new guidance. The Company
did not elect the hindsight practice expedient to use hindsight when determining lease term and assessing impairment of ROU lease
assets. See Note 9 &ndash; Lease Obligations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(d)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Reclassifications</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain
prior period amounts have been reclassified to conform with the current period presentation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(e)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Cash
    and Cash Equivalents</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash
and cash equivalents consist primarily of cash on deposit, certificates of deposit, and money market accounts. Cash equivalents
are all highly liquid investments with original maturities of three months or less. Amounts receivable from credit card processors
are also considered cash equivalents as they are both short term and highly liquid in nature, and are typically converted to cash
within three business days. Amounts due to the Company from credit card processors that are classified as cash and cash equivalents
totaled $13.2 million and $9.2 million at June 30, 2020 and December&nbsp;31, 2019, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(f)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Restricted
    Cash</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Restricted
cash includes amounts deposited in commercial bank time deposits and money market accounts to collateralize the Company&rsquo;s
deposit obligations. The Company considers restricted cash related to obligations classified as current liabilities to be current
assets and restricted cash related to obligations classified as long-term liabilities as noncurrent assets. At June 30, 2020 and
December&nbsp;31, 2019, the Company had $0.8 million and $0.8 million, respectively, in restricted cash, primarily related to
collateralization required pursuant to a lease agreement and the restricted cash account required under the Company&rsquo;s health
insurance plan. The restricted cash balance is classified as a current asset in the consolidated balance sheets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following is a reconciliation of cash and cash equivalents, and restricted cash reported within the consolidated balance sheets
that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">June&nbsp;30,<BR>
    2020</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">December&nbsp;31,<BR>
    2019</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left">Cash and cash equivalents</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">141,855</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">79,750</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Restricted cash</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">837</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">797</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 4pt">Total cash and cash equivalents,
    and restricted cash</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">142,692</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">80,547</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(g)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Accounts
    Receivable</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounts
receivable consist primarily of vendor receivables, which do not bear interest, and represent amounts due for marketing development
funds, cooperative advertising, price protection and other incentive programs offered to the Company by certain vendors. Accounts
receivable also include receivables from business customers on 30- to 60-day credit terms. The Company estimates an allowance
for doubtful accounts based on historical experience and other factors. Accounts receivable are written off when deemed uncollectible.
Recoveries of accounts receivable previously written off are recorded when received. Amounts receivable from business customers
were $15.6 million and $14.6 million, net of allowances of $0.1 million and $0.1 million, at June 30, 2020 and December&nbsp;31,
2019, respectively. See further discussion of amounts receivable related to vendor incentive programs under Incentives Earned
from Vendors below.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(h)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Inventories</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inventories,
consisting of products available for sale, are accounted for using the first-in, first-out (FIFO) method and are valued at the
lower of cost and net realizable value. In-bound freight-related costs are included as part of the cost of merchandise held for
resale. In addition, certain vendor payments are deducted from the cost of merchandise held for resale. The Company records an
inventory provision for refurbished, slow-moving, or obsolete inventories based on historical experience and assumptions of future
demand for product. These allowances are released when the related inventory is sold or disposed of. Amounts of inventory allowances
were $4.1 million and $3.7 million, as of June 30, 2020 and December 31, 2019, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(i)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Property
    and Equipment</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property
and equipment are stated at cost, less accumulated amortization and depreciation computed using the straight-line method over
the estimated useful life of each asset. Leasehold improvements are amortized over the lesser of the remaining lease term or the
estimated useful life of the assets. Expenditures for repair and maintenance costs are expensed as incurred, and expenditures
for major renewals and improvements are capitalized. Costs incurred during the application development stage of internal-use software
and website development are capitalized and included in property and equipment. When assets are retired or otherwise disposed
of, the cost and accumulated depreciation or amortization are removed from the accounts, and any gain or loss is reflected in
the Company&rsquo;s consolidated statements of operations. The useful lives for depreciable assets are as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 50%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Buildings</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 49%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">20&ndash;39
    years</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: white">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Machinery
    and equipment</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3&ndash;7
    years</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Computer
    and software</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3&ndash;5
    years</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: white">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Leasehold
    improvements</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Lesser
    of lease term or 10 years</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Capitalized
    software</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3&ndash;5
    years</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: white">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furniture
    and fixtures</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5&ndash;7
    years</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(j)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Leases</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company defines lease agreements at their inception as either operating or finance leases depending on certain defined criteria.
Certain lease agreements may entitle the Company to receive rent holidays, other incentives, or periodic payment increases over
the lease term. Accordingly, rent expense under operating leases is recognized on the straight-line basis over the original lease
term, inclusive of predetermined minimum rent escalations or modifications and rent holidays.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(k)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Impairment
    of Long-Lived Assets</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluates the recoverability of long-lived assets for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. The impairment test comprises two steps. The first step compares
the carrying amount of the asset to the sum of expected undiscounted future cash flows. If the sum of expected undiscounted future
cash flows exceeds the carrying amount of the asset, no impairment is taken. If the sum of expected undiscounted future cash flows
is less than the carrying amount of the asset, a second step is warranted and an impairment loss is measured as the amount by
which the carrying amount of the asset exceeds its fair value calculated using the present value of estimated net future cash
flows. There have been no impairment losses recognized by the Company for the six months ended June 30, 2020 and for the year
ended December 31, 2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(l)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Investments</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investments
are accounted for using the equity method if the investment provides the Company has the ability to exercise significant influence,
but not control, over an investee. Significant influence is generally deemed to exist if the Company has an ownership interest
in the voting stock of the investee between 20%&nbsp;and 50%, although other factors are considered in determining whether the
equity method is appropriate. Also, investments in limited partnerships&nbsp;of more than 3% to 5% are generally viewed as more
than minor and are accounted for using the equity method.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
investments for which the Company is not able to exercise significant influence over the investee and which do not have readily
determinable fair values were accounted for under the cost method prior to the adoption of ASU 2016-01 <I>Financial Instruments-Overall
(Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities</I>. Subsequent to the adoption of
this standard as of January 1, 2018, the Company has elected the measurement alternative to measure such investments at cost,
less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or
a similar investment of the same issuer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(m)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Fair
    Value of Financial Instruments</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fair
value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. To increase the comparability of fair value measures, a three-tier fair value
hierarchy prioritizes the inputs used in measuring fair value. These tiers include Level&nbsp;1, defined as observable inputs
such as quoted prices in active markets; Level&nbsp;2, defined as inputs other than quoted prices in active markets that are either
directly or indirectly observable; and Level&nbsp;3, defined as unobservable inputs in which little or no market data exist, therefore,
requiring the Company to develop its own assumptions to determine the best estimate of fair value.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued and other liabilities approximate
fair value because of the short maturity of these instruments. The carrying amounts of long-term debt and line of credit at June
30, 2020 and December 31, 2019 approximates fair value because the interest rate approximates the current market interest rate.
The fair value of these financial instruments was determined using level 2 input.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(n)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Accumulated
    Other Comprehensive Income (Loss)</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Comprehensive
loss consists of net loss and adjustments to stockholders&rsquo; equity for foreign currency translation adjustments. Accumulated
other comprehensive loss consists entirely of foreign currency translation adjustments. The tax impact is not material to the
consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(o)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Revenue
    Recognition</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company adopted Accounting Standards Update No. 2014-09 <I>Revenue From Contracts with Customers (Topic 606)</I> as of January
1, 2018. Revenue recognition is evaluated through the following five step process:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.
Identification of the contract with a customer;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.
Identification of the performance obligations in the contract;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.
Determination of the transaction price;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.
Allocation of the transaction price to the performance obligations in the contract; and</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.
Recognition of revenue when or as a performance obligation is satisfied.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue
is recognized when control of a promised product or service transfers to a customer, in an amount that reflects the consideration
to which the Company expects to be entitled in exchange for transferring those products or services. Revenue is recognized net
of sales taxes and discounts. The Company primarily generates revenue through product sales on its platforms and through fees
earned for facilitating marketplace transactions and extended warranty sales on its platforms.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left">The Company recognizes revenue
on product sales at a point in time to customers when control of the product passes to the customer upon delivery to the customer
or when service is provided. The Company fulfills orders with its owned inventory or with inventory sourced through its suppliers.
The vast majority of the Company&rsquo;s product sales are fulfilled from its owned inventory. The amount recognized in revenue
represents the expected consideration to be received in exchange for such goods or services. For orders fulfilled with inventory
sourced through the Company&rsquo;s suppliers, and where the products are shipped directly by the Company&rsquo;s supplier to the
Company&rsquo;s customer, the Company evaluates the criteria outlined in ASC 606-10-55, <I>Principal versus Agent Considerations</I>,
in determining whether revenue should be recognized on a gross or net basis. The Company determined that it is the principal in
these transactions as it controls the specific good before it is transferred to the customer. The Company is the entity responsible
for fulfilling the promise to provide the specified good to the customer and takes responsibility for the acceptability of the
goods, assumes inventory risk before the specified good has been transferred to the customer or after transfer of control to the
customer, has discretion in establishing the price, and selects the suppliers of products sold. The Company accounts for product
sales under these arrangements on a gross basis upon receipt of the product by the customer. Product sales exceeded 95% of consolidated
net sales for six months ended June 30, 2020 and 2019.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company generally requires payment by credit card upon placement of an order, and to a limited extent, grants credit to business
customers on 30- to 60-day terms. Shipping and handling is considered a fulfillment activity, as it takes place before the customer
obtains controls of the good. Amounts billed to customers for shipping and handling are included in net sales upon completion
of the performance obligation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s product sales contracts include terms that could cause variability in the transaction price such as sales returns
and credit card chargebacks. As such, the transaction price for product sales includes estimates of variable consideration to
the extent it is probable that a significant reversal of revenue recognized will not occur. Sales are reported net of estimated
returns and allowances and credit card chargebacks, based on historical experience.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company also earns fees for facilitating marketplace transactions and extended warranty sales on its platforms. For marketplace
transactions, the Company&rsquo;s websites host third-party sellers and the Company also provides the payment processing function.
The Company recognizes revenue upon sale of products made available through its marketplace store. The Company is not the principal
in this arrangement and does not control the specific goods sold to the customer. The Company reports the net amount earned as
commissions, which are determined using a fixed percentage of the sales price or fixed reimbursement amount. The Company also
offers extended warranty programs for various products on behalf of an unrelated third party. The Company reports the net amount
earned as revenue at the time of sale, as it is not the principal in this arrangement and does not control the specific goods
sold to the customer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company offers its customers the opportunity to purchase goods and services on its website using deferred financing promotional
programs provided by a third-party financing company. These programs include an option to make no payments for a period of six,
twelve, eighteen or twenty-four months. The third-party financing company makes all decisions to extend credit to the customer
under a separate agreement with the customer, owns all such receivables from the customer, assumes all risk of collection, and
has no recourse to the Company in &nbsp;the event the customer does not pay. The third-party financing company pays the Company
for the purchase price on behalf of the customer, less certain transaction fees. Accordingly, sales generated through these programs
are not reflected in the Company&rsquo;s receivables once payment is received from the third-party financing company. The transaction
fee paid by the Company to the third-party financing company is recognized as a reduction of revenue. These transaction fees for
the six months ended June 30, 2020 and 2019 were immaterial.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
the extent that the Company sells its products on third-party platforms, the Company incurs incremental contract acquisition costs
in the form of sales commissions paid to the platforms. The commissions are generally determined based on the sales price and
an agreed-upon commission rate. The Company elects the practical expedient under Accounting Standards Update No. 2014-09 <I>Revenue
From Contracts with Customers (Topic 606)</I> to recognize sales commission as an expense as incurred, as the amortization period
of the asset that the Company otherwise would have recognized is less than one year.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has three types of contractual liabilities: (1) amounts collected, or amounts invoiced and due, related to product sales
where receipt of the product by the customer has not yet occurred or revenue cannot be recognized. Such amounts are recorded in
the consolidated balance sheets as deferred revenue and are recognized when the applicable revenue recognition criteria have been
satisfied. For all of the product sales, the Company ships a large volume of packages through multiple carriers. Actual delivery
dates may not always be available and as such, the Company estimates delivery dates as needed based on historical data. (2) amounts
collected for the Company&rsquo;s Premier membership services, which are typically paid upfront for membership benefits over a
3-month, 6-month, or 12-month period, including free 3-day shipping, free return, rush processing and dedicated customers services.
Such amounts were initially recorded as deferred revenue and were recognized as revenue ratably over the subscription period.
The Company discontinued its Premier membership services in 2019, resulting in no balance of deferred revenue related to this
program as of December 31, 2019. The amount of deferred revenue related to the Premier membership services was immaterial as of
December 31, 2018. (3) unredeemed gift cards, which are initially recorded as deferred revenue and are recognized in the period
they are redeemed. Subject to governmental agencies escheat requirements, certain gift cards not expected to be redeemed, also
known as &ldquo;breakage&rdquo;, are recognized as revenue based on the historical redemption pattern. These gift cards breakage
revenue for the six months ended June 30, 2020 and 2019 were immaterial.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deferred
revenue totaled $37.0 million and $25.9 million at June 30, 2020 and December 31, 2019, respectively. During the six months ended
June 30, 2020, the Company recognized $23.1 million of net revenue included in deferred revenue at December 31, 2019. During the
six months ended June 30, 2019, the Company recognized $31.6 million of net revenue included in deferred revenue at December
31, 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(p)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Cost
    of Sales</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s cost of sales represents the purchase price of the products it sells to its customers, offset by incentives earned
from vendors, including marketing development funds and other vendor incentive programs. See further discussion of vendor payments
under Incentives Earned from Vendors below. Cost of sales also includes freight-in and freight-out costs and charges related to
refurbished, slow-moving, or obsolete inventory.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(q)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Shipping
    and Handling</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company records revenue for shipping and handling billed to its customers. Shipping and handling revenue totaled approximately
$15.7 million and $8.5&nbsp;million for the six months ended June 30, 2020 and 2019, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
related shipping and handling costs are included in cost of sales. Shipping and handling costs totaled approximately $35.6 million
and $30.7&nbsp;million for the six months ended June 30, 2020 and 2019, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(r)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Incentives
    Earned from Vendors</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company participates in various vendor incentive programs that include, but are not limited to, purchasing-based volume discounts,
sales-based volume incentives, marketing development funds, including for certain cooperative advertising, and price protection
agreements. Vendor incentives are recognized in the consolidated statements of operations as an offset to marketing and promotional
expenses to the extent that they represent reimbursement of advertising costs incurred by the Company on behalf of the vendors
that are specific, incremental, and identifiable. Reimbursements that are in excess of such costs and all other vendor incentive
programs are accounted for as a reduction of cost of sales, or if the related product inventory is still on hand at the reporting
date, inventory is reduced in the consolidated balance sheets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company reduced cost of sales by $53.7 million and $72.5&nbsp;million for the six months ended June 30, 2020 and 2019, respectively,
for these vendor incentive programs. Reductions to advertising and promotional expenses related to direct reimbursements for costs
incurred in advertising vendors&rsquo; products totaled $0.6 million and $0.2&nbsp;million for the six months ended June 30, 2020
and 2019, respectively. Amounts receivable related to vendor incentive programs were $19.4 million and $34.8 million, net of allowances
of $0.2 million and $0.5 million, at June 30, 2020 and December&nbsp;31, 2019, respectively. Amounts due to the Company are included
in accounts receivable in the consolidated balance sheets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(s)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Selling,
    General, and Administrative Expenses</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Selling,
general, and administrative expenses primarily consist of marketing and advertising expenses, sales commission, credit card processing
fees, payroll and related benefits, depreciation and amortization, professional fees, litigation costs, rent expense, information
technology expenses, warehouse costs, office expenses, and other general corporate costs.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(t)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Advertising</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Advertising
and promotional expenses are charged to operations when incurred and are included in selling, general, and administrative expenses.
Advertising and promotional expenses for the six months ended June 30, 2020 and 2019 were $11.7 million and $15.3&nbsp;million,
respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(u)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Stock-Based
    Compensation</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
measurement and recognition of compensation expense for all stock-based payment awards made to employees and directors, including
employee stock options and restricted stock, is based on estimated fair value of the awards on the date of grant. The value of
awards that are ultimately expected to vest is recognized as expense on a straight-line basis over the requisite service periods
in the consolidated statements of operations. See Note&nbsp;13 &ndash; Stock-Based Compensation for further information about
the Company&rsquo;s stock compensation plans.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(v)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Income
    Taxes</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is subject to federal and state income taxes in the United States and taxes in foreign jurisdictions. In accordance with
ASC Topic 740, the Company uses the asset and liability&nbsp;method of accounting for income taxes. Under the asset and liability
method, deferred taxes are determined based on the temporary differences between the financial statement and tax bases of assets
and liabilities, using tax rates expected to be in effect during the years in which the bases differences are expected to reverse.
A valuation allowance is established against deferred tax assets when it is more likely than not that some portion or all of the
deferred tax assets will not be realized.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will
be sustained upon examination by the taxing authorities based on the technical merits of the position. The Company measures the
recognized tax benefit as the largest amount of tax benefit that has greater than a 50% likelihood of being realized upon the
ultimate settlement with a taxing authority. The Company reverses a previously recognized tax benefit if it determines that the
tax position no longer meets the more-likely-than-not threshold of being sustained. The Company accrues interest and penalties
related to unrecognized tax benefits in income tax expense.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(w)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Concentration
    of Credit Risk and Significant Customers and Vendors</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company maintains its cash and cash equivalents in bank deposit accounts which, at times, may exceed federally insured limits.
The Company has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk
from cash and cash equivalents.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the six months ended June 30, 2020 and 2019, the Company had no individual customers that accounted for greater than 10% of net
sales.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company purchases its products on credit terms from vendors located primarily in the United States. For both the six months ended
June 30, 2020 and 2019, the Company&rsquo;s cumulative annual purchases from one vendor was 12.5% and 12.1% of total purchases,
respectively. The majority of products that the Company sells are available through multiple channels.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has receivables due from vendors related to its advertising and promotional programs and receivables due from business
customers with credit terms. As of June 30, 2020, the Company&rsquo;s receivables from three vendors were 19.4%, 14.6%, and 14.1%
of net receivables, and no receivables from business customers with credit terms exceeded 10% of net receivables. As of December&nbsp;31,
2019, the Company&rsquo;s receivables from one vendor was 22.1% of net receivables, and no receivable from business customers
with credit terms exceeded 10% of net receivables.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(x)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Foreign
    Currency Translation</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
financial statements of foreign subsidiaries and affiliates where the local currency is the functional currency are translated
into U.S.&nbsp;dollars using exchange rates in effect at the balance sheet date for assets and liabilities and average exchange
rates during the year for revenues and expenses. Any gain or loss on currency translation is included in stockholders&rsquo; equity
as accumulated other comprehensive income.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(y)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Convertible
    Preferred Stock</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left">Under the Company&rsquo;s
current certificate of incorporation, Series A convertible Preferred Stock is convertible at the holder&rsquo;s option into
Class A Common Stock by dividing the Series A Original Issue Price by the Series A Conversion Price in effect at the time of
conversion. Similarly, each share of Series AA convertible Preferred Stock is convertible at the holder&rsquo;s option into
Class A Common Stock by dividing the sum of the Series AA Original Issue Price plus any dividends declared but unpaid thereon
by the Series AA Conversion Price in effect at the time of conversion. Further, upon the date of an IPO, all outstanding
shares of Series A convertible Preferred Stock and Series AA convertible Preferred Stock shall automatically be converted
into shares of Class B Common Stock at the then-effective conversion rate. Finally, upon a date (prior to the date of an IPO)
specified by vote or written consent of at least a majority of the then outstanding shares of Series A convertible Preferred
Stock, all outstanding shares of Series A convertible Preferred Stock shall automatically be converted into shares of Class A
Common Stock at the then effective conversation rate. Upon a date (prior to the date of an IPO) specified by vote or written
consent of at least a majority of the then outstanding shares of Series AA convertible Preferred Stock, all outstanding
shares of Series AA convertible Preferred Stock shall automatically be converted into shares of Class A Common Stock at the
then effective conversation rate. The Company&rsquo;s current certificate of incorporation also allows the Series A
convertible Preferred Stock and Series AA convertible Preferred Stock to be redeemed upon certain defined deemed liquidation
events.&nbsp; As the possible redemption of these shares was outside of the control of the Company, the carrying amount of
the Series A and AA convertible preferred stocks were classified as temporary equity. The transactions and the carrying
amount of the Series A and AA convertible preferred stocks were reclassified to temporary equity retrospectively for year
2018 to conform with year 2019 presentation. The Series A and Series AA convertible Preferred Stocks were initially recorded
at their original issuance amounts, net of direct third-party costs incurred in connection with issuance.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(3)</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fair
    Value</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s financial assets and liabilities that are measured at fair value on a recurring basis include cash and cash equivalents,
and restricted cash. The carrying amounts of cash and cash equivalents and restricted cash approximate their fair value.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s financial assets that are measured at fair value on a non-recurring basis when impairment is identified include
equity method investment and investment in equity securities without readily determinable fair value not accounted for under the
equity method. The fair values of these investments are determined based on valuation techniques using the best information available,
and may include quoted market prices, market comparable, and discounted cash flow projections. An impairment charge is recorded
when the cost of the investment exceeds its fair value. This is considered a Level 3 fair value measurement. See Note 5 &ndash;
Investment for further information regarding the fair value measurement of these investments.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
fair value of accounts receivables approximates carrying value due to the short-term maturities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s loans to affiliate, loans from affiliate, line of credit and long-term debt are carried at cost with fair value
disclosed, if required. The fair value of the amounts outstanding under the line of credit and long-term debt with a floating
interest rate approximates the carrying value due primarily to the variable nature of the interest rate of the instruments, which
is considered a Level&nbsp;2 fair value measurement. The fair value of the amounts outstanding under loans to affiliate, and line
of credit with a fixed interest rate is estimated based on the discounted amount of the contractual future cash flows using an
appropriate discount rate. This is considered a Level&nbsp;3 fair value measurement. The following is a summary of the carrying
amounts and estimated fair values of these financial instruments as of June 30, 2020 and December 31, 2019 (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">June
    30, <BR> 2020</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">December
    31,<BR> 2019</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Carrying
    Value</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Estimated
    Fair Value</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Carrying
    Value</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Estimated
    Fair Value</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; font: 10pt Times New Roman, Times, Serif; text-align: left">Loans to affiliate</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">15,000</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">15,000</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">15,000</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">15,000</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">Line of credit</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">6,510</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">6,510</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">6,379</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">6,379</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Long-term debt</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,422</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,364</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,481</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,424</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(4)</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Property
    and Equipment, Net</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property
and equipment, net consisted of the following (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">June&nbsp;30,<BR>
    2020</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">December&nbsp;31,<BR>
    2019</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif">Land &nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">2,244</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">2,179</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">Buildings</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">32,326</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">32,455</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Machinery and equipment</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">40,429</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">40,477</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Computer and software</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">32,403</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">32,538</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Leasehold improvements</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">12,386</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">12,560</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Capitalized software</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">14,978</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">12,650</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Furniture and fixtures</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">3,165</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">3,196</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Construction in progress</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">6,684</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">6,706</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">144,615</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">142,761</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Accumulated depreciation and
    amortization</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(99,517</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(95,631</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property
    and equipment, net</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">45,098</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">47,130</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Depreciation
and amortization expense associated with property and equipment was $4.5 million and $5.4&nbsp;million for the six months ended
June 30, 2020 and 2019, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
September 2019, the Company entered into a sale leaseback transaction for one of its real estate properties in the United States.
The Company sold the property for gross proceeds of $38.5 million, and recognized a gain of $28.8 million from the transaction,
which is included as other operating income in its consolidated statements of operations. The Company concurrently leased back
the property from the buyer under a lease agreement for ten years, resulting in ROU lease asset of $14.1 million and a lease liability
of $13.9 million as of the lease commencement date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(5)</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Investment</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 17, 2018, the Company acquired an equity interest in Mountain Capital Fund L.P. (&ldquo;Mountain&rdquo;) from Pegasus View
Global Ltd., an international business company incorporated in the Republic of Seychelles (&ldquo;Pegasus&rdquo;), which is a
related party. Mountain is an exempted limited partnership registered under the partnership law in the Cayman Islands and primarily
engages in investing. The Company&rsquo;s equity interest in Mountain was limited to 50% of Mountain&rsquo;s investment in One97
Communications Limited and PayTM E-Commerce Private Limited (collectively, the &ldquo;Mountain Investment&rdquo;). In addition
to the $43.0 million initial investment made during 2018, the purchase price in this transaction included a contingent consideration
of up to $7.0 million upon satisfaction of certain conditions described in the purchase agreement. The Company evaluated the Mountain
Investment under the variable interest model and the voting interest model and concluded that Mountain Capital Fund L.P. is not
a variable interest entity and no consolidation is needed under either the variable interest model or the voting interest model.
The Company recorded an estimate of contingent consideration payable of $7.0 million as of the acquisition date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Mountain
sold a portion of its investment in One97 Communications Limited (&ldquo;One97&rdquo;) to various third-party buyers during the
six months ended June 30, 2019, and sold the rest of its investment in One97 in the six months ended December 31, 2019, which
resulted in the Company&rsquo;s disposal of all of its investment in One97. The Company recorded a gain on the equity method investment
in Mountain of $24.1million for the six months ended June 30, 2019. As of June 30, 2020 and December 31, 2019, the carrying value
of the Company&rsquo;s investment in Mountain was $6.5 million, and the Company&rsquo;s ownership percentage in Mountain was approximately
8.0%. As Mountain is a limited partnership, the Company continues accounting for the Mountain Investment under the equity method
as of June 30, 2020 and December 31, 2019 and for the periods then ended.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
Note 17 &ndash; Related Party Transactions for further information regarding this transaction.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">In August 2018, the Company purchased
11,506,695 Series B+ Preferred shares in Bitmain Technologies Holding Company, a privately-held company incorporated in the Cayman
Islands, for a total consideration of $15.0 million. Bitmain Technologies Holding Company and its subsidiaries (together &ldquo;Bitmain&rdquo;)
primarily designs and sells cryptocurrency mining hardware, operate cryptocurrency mining pools, and provide mining farm services.
As this represents an investment in equity securities without readily determinable fair values, the Company elected the measurement
alternative under ASU 2016-01 to measure this investment at cost, less any impairment, plus or minus changes resulting from observable
price changes in orderly transactions for the identical or a similar investment of the same issuer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">The Company reviewed the investment
in Bitmain for impairment as of June 30, 2020 and December 31, 2019, by evaluating if events or circumstances have occurred that
may have a significant adverse effect on the fair value of the investment. The Company concluded there were no impairment indicators
as of June 30, 2020 and December 31, 2019. In the absence of observable price changes in orderly transactions for the identical
or a similar investment of the same issuer during the six months ended June 30, 2020 and 2019, the carrying value of the investment
remained at $15.0 million as of June 30, 2020 and December 31, 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">There was no impairment loss
on cost method investments for the six months ended June 30, 2020 and 2019.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(6)</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Accrued
    Liabilities</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accrued
liabilities consisted of the following (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">June&nbsp;30,<BR>
    2020</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">December&nbsp;31,<BR>
    2019</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left">Accrued personnel</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">16,983</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">20,534</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Allowance for sales returns</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">4,727</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">4,812</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Accrued advertising expense</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,720</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,051</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Sales and other taxes payable</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">11,685</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">8,974</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Accrued legal expense</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">621</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1,396</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Accrued freight expense</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,272</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">3,563</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Accrued medical expense</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">521</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1,298</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Other</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">7,164</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">6,768</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
    accrued liabilities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">46,693</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">49,396</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(7)</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Line
    of Credit</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
July&nbsp;2018, the Company entered into a credit agreement with several financial institutions that provided a revolving credit
facility of up to $100.0&nbsp;million with a maturity date of July&nbsp;27, 2021. Prior to July 27, 2020 and subject to certain
terms and conditions, the Maximum Revolving Advance Amount, as defined in the loan agreement, could be increased up to $140.0
million. The revolving credit facility includes a letter of credit sublimit of $25.0&nbsp;million, which can be used to issue
standby and trade letters of credit, and a $10.0&nbsp;million sublimit for swingline loans. Advances from this line of credit
will be subject to interest at LIBOR plus the Applicable Margin, as defined in the loan agreement, or the Alternate Base Rate
(to be defined as the highest of the financial institution&rsquo;s prime rate, the Overnight Bank Funding Rate plus 0.50%, or
the daily LIBOR plus 1.0%) plus the Applicable Margin. For LIBOR loans, the Company may select interest periods of one, two, or
three months. Interest on LIBOR loans shall be payable at the end of the selected interest period. Interest on Alternate Base
Rate loans is payable monthly. The line of credit is guaranteed by certain of the Company&rsquo;s U.S.&nbsp;subsidiaries and is
collateralized by certain of the assets of the Company. Such assets include all receivables, equipment and fixtures, general intangibles,
inventory, subsidiary stock, securities, investment property, and financial assets, contract rights, and ledger sheets, as defined
in the loan agreement. To maintain availability of funds under the loan agreement, the Company will pay on a quarterly basis,
an unused commitment fee of either 0.25% of the difference between the amount available and the amount outstanding under the facility
if the difference is less than one-third of the Maximum Revolving Advance Amount or 0.40% of the difference between the amount
available and the amount outstanding under the facility if the difference is equal to or greater than one-third of the Maximum
Revolving Advance Amount. As of June 30, 2020 and December&nbsp;31, 2019, there was no balance outstanding under this line of
credit. The credit facility contains customary covenants, including covenants that limit or restrict the Company&rsquo;s ability
to incur capital expenditures and lease payments, make certain investments, enter into certain related-party transactions, and
pay dividends. The credit facility also requires the Company to maintain certain minimum financial ratios and maintain operation
banking relationship with the financial institutions. As of June 30, 2020 and December&nbsp;31, 2019, the Company was in compliance
with all financial covenants related to the line of credit.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
July&nbsp;2015, the Company entered into a credit agreement with a financial institution that provided for a revolving credit
facility of up to $5.0&nbsp;million with a maturity date of no later than August&nbsp;26, 2016. The Company extended the maturity
date of this credit agreement to October 24, 2020. Advances from this line of credit are subject to interest at a floating interest
rate of the one-year savings account plus 0.63% not to be lower than 1.62% per annum. The interest rate was equivalent to 1.72%
as of June 30, 2020 and December&nbsp;31, 2019. The line of credit is guaranteed by one of the Company&rsquo;s China subsidiaries
and is collateralized by a real estate asset of that subsidiary. As of June 30, 2020 and December&nbsp;31, 2019, there was $5.1
million and $4.9 million, respectively, outstanding under this line of credit.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
May 2018, the Company entered into a credit agreement with a financial institution that provided for a revolving credit facility
of up to $3.6 million with a maturity date of May 14, 2019. Advances from this line of credit
are subject to a fixed interest rate of 5.22% per annum. The line of credit is guaranteed by one of the Company&rsquo;s China
subsidiaries and is collateralized by the foreign bank deposit assets of the same subsidiary. This credit agreement expired in
May 2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
March 2019, the Company entered into a credit agreement with a financial institution that provided for a revolving credit facility
of $3.6 million with a maturity date of September 19, 2019. Advances from this line of credit were subject to interest at a floating
interest rate of the Loan Prime Rate, as defined in the credit agreement, times 142%. This credit facility is collateralized by
all of the assets of one of the Company&rsquo;s subsidiaries in China. This credit agreement expired in September 2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
December 2019, the Company entered into a credit agreement with a financial institution that provided for a revolving credit facility
of $1.4 million. Advances from this line of credit were subject to a fixed interest rate of 6.09% per annum. The line of credit
is collateralized by a real estate asset of that subsidiary. As of both June 30, 2020 and December&nbsp;31, 2019, there was $1.4
million outstanding under this line of credit.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(8)</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Long-Term
    Debt</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has entered into various loans with financial institutions. Long-term debt consisted of the following (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">June&nbsp;30,<BR>
    2020</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">December&nbsp;31,<BR>
    2019</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left">Term Loan</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">2,422</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">2,481</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Less current portion</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(269</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(258</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term
    debt less current portion</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">2,153</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">2,223</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Credit
Facility</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
March 2018, the Company entered into a long-term revolving loan agreement with a financial institution that provided a revolving
credit facility of up to $13.0 million with a maturity date of March 8, 2020 (the &ldquo;Credit Facility&rdquo;). For each calendar
quarter during the term of this credit agreement, advances from the Credit Facility are subject to an interest rate of either
the Wall Street Journal Prime Rate or LIBOR-Based Rate, as defined in the loan agreement, at the Company&rsquo;s option. The LIBOR-Based
Rate may be calculated as either LIBOR plus 2.75% if the Compensating Deposits, as defined in the credit agreement, are less than
$15.0 million as a daily average for the previous calendar quarter or LIBOR plus 2.5% if the Compensating Deposits equal at least
$15.0 million as a daily average for the previous calendar quarter. The Credit Facility was collateralized by a real estate asset
of the Company, and contained customary covenants, including covenants that limit or restrict the Company&rsquo;s ability to incur
indebtedness, capital expenditures and lease payments, make certain investments and enter into certain related-party transactions.
Additionally, there was a requirement to maintain minimum liquidity (to be defined as cash or cash equivalents and securities
that are readily marketable and are not subject to any lien, claim, encumbrance, charge or any other restriction) of $35.0 million
during the term of the Credit Facility. The Company paid off the loan in full during 2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Term
Loan</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2013, the Company entered into a term loan agreement with a financial institution for $4.1 million with a maturity date of November
26, 2028 (the &ldquo;Term Loan&rdquo;). The Term Loan bears a floating interest rate of the one-year savings account plus 0.43%
per annum in the first two years and a floating interest rate of the one-year savings account plus 0.61% per annum for the remaining
of the term, not to be lower than 1.8% during the entire term. The interest rate was equivalent to 1.98% as of June 30, 2020.
The Term Loan is collateralized by a first position security interest in a floor of an office building owned by the Company in
Taiwan.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Aggregate
maturities of long-term debt, excluding unamortized debt issuance costs, were as follows (in thousands) as of June 30, 2020:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 88%; text-align: left">2020</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">134</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">2021</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">271</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">2022</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">276</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">2023</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">281</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">2024</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">286</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Thereafter</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1,174</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">2,422</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(9)</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Lease
    Obligations</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Operating
Leases</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company leases certain office and warehouse facilities and warehouse equipment under various noncancelable operating leases. The
Company is also committed under the terms of certain of these operating lease agreements to pay property taxes, insurance, utilities,
and maintenance costs. See Note 4 &ndash; Property and Equipment, net for disclosure for sales and leaseback transaction.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Most
of the Company&rsquo;s leases do not provide an implicit rate that can be readily determined. Therefore, the Company uses a discount
rate based on its incremental borrowing rate, which is determined using its credit rating and information available as of the
commencement date. The Company&rsquo;s operating lease agreements may include options to extend the lease term. The Company made
an accounting policy election to exclude options that are not reasonably certain of exercise when determining the term of the
borrowing in the assessment of the incremental borrowing rate. Additionally, the Company also made an accounting policy election
to not separate lease and non-lease components of a contract, and to recognize the lease payments under short-term leases as an
expense on a straight-line basis over the lease term without recognizing the lease liability and the ROU lease asset.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluates whether its contractual arrangements contain leases at the inception of such arrangements. Specially, the Company
considers whether it can control the underlying asset and have the right to obtain substantially all of the economic benefits
or outputs from the assets. Substantially all of its leases are long-term operating leases with fixed payment terms. The Company
does not have significant financing leases. Its ROU operating lease assets represent the right to use an underlying asset for
the lease term, and its operating lease liabilities represent the obligation to make lease payments. ROU operating lease assets
are recorded in other noncurrent assets in the consolidated balance sheet. Operating lease liabilities are recorded in other current
liabilities or other noncurrent liabilities in the consolidated balance sheets based on their contractual due dates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s operating lease liability is recognized as of the lease commencement date at the present value of the lease payments
over the lease term. The Company&rsquo;s ROU operating lease asset is recognized as of the lease commencement date at the amount
of the corresponding lease liability, adjusted for prepaid lease payments, lease incentives received, and initial direct costs
incurred. The Company evaluates its ROU lease assets for impairment consistent with its impairment of long-lived assets policy.
See Note 2&mdash;Summary of Significant Accounting Policies.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">Operating lease expense is recognized
on a straight-line basis over the lease term, and is included in selling, general, and administrative expenses in the consolidated
statement of operations. Operating lease expense totaled $8.0 million and $5.8&nbsp;million, respectively, for the six months ended
June 30, 2020 and 2019. Cash payments made for operating leases totaled $7.3 million during the six months ended June 30, 2020,
which were included in cash flows from operating activities in the consolidated statement of cash flows. As of June 30, 2020, the
Company&rsquo;s ROU operating lease assets were $31.5 million, and its operating lease liabilities were $33.0 million, of which
$24.6 million was classified as non-current. As of December 31, 2019, the Company&rsquo;s ROU operating lease assets were $38.1
million, and its operating lease liabilities were $39.2 million, of which $30.6 million was classified as non-current. New ROU
operating lease assets and liabilities entered into during 2019 were $21.3 million and $20.9 million, respectively. No new ROU
operating lease assets and liabilities entered into during the six months ended June 30, 2020. The Company&rsquo;s weighted average
remaining lease term and the discount rate for its operating leases were approximately 5.9 years and 5.04% at June 30, 2020, and
6.06 years and 5.06% at December 31, 2019.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has certain sublease arrangements for some of the leased office and warehouse facilities. Sublease rental income for the
six months ended June 30, 2020 and 2019 was immaterial.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table summarizes the future minimum rental payments under noncancelable operating lease arrangements in effect at June
30, 2020 (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 88%; text-align: left">2020</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">5,129</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">2021</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">9,696</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">2022</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">7,515</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">2023</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">4,949</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">2024</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">3,008</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Thereafter</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">11,066</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 4pt">Total minimum payments</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">41,363</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt">Less: Imputed interest</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">8,304</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">Present value of lease liabilities</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">33,059</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(10)</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Income
    Taxes</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">The Company&rsquo;s income tax
provision for interim periods is determined using an estimate of the annual effective tax rate adjusted for discrete items, if
any, for relevant interim periods. The Company updates the estimate of the annual effective tax rate each six months and makes
cumulative adjustments if the estimated annual effective tax rate changes. The quarterly tax provision and the quarterly estimate
of the annual effective tax rate are subject to significant variations due to several factors including variability in predicting
the pre-tax and taxable income and the mix of jurisdictions to which those items relate, relative changes in expenses or losses
for which tax benefits are not recognized, how the Company does business, and changes in laws, regulations, and administrative
practices. The effective tax rate can be volatile based on the amount of pre-tax income. For example, the impact of discrete items
on the effective tax rate is greater when pre-tax income is lower.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">The expense or (benefit) for
income taxes for the six months ended June 30, 2020 and 2019 was $1.4 million and $4.0 million, respectively. The effective tax
rate for the six months ended June 30, 2020 and 2019 was 6.9% and (35.9)%, respectively. The low effective tax rate is primarily
attributable to the valuation allowance the Company maintains on the net deferred tax assets related to U.S. operations and certain
withholding tax in 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">As of June 30, 2020 and June&nbsp;30,
2019, the Company&rsquo;s uncertain tax positions were approximately $0.6 million and $0.6 million respectively.&nbsp;Changes in
tax laws, regulations, administrative practices, principles, and interpretations may impact the tax contingencies. The Company
does not anticipate the uncertain tax positions to materially change within the next twelve months.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">The Company is subject to both
direct and indirect taxation in the U.S. and various states and foreign jurisdictions. The Company is under examination by certain
tax authorities for the 2010 to 2019 tax years. The Company believes that adequate amounts have been reserved for any adjustments
that may ultimately result from these or other examinations. The material jurisdictions where the Company is subject to potential
examination by tax authorities for tax years after 2010 include, among others, the U.S. (Federal and California), Canada and China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><I></I></B></FONT></P>

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<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(Unaudited)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(11)</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Common
    Stock</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s Common Stock consists of Class&nbsp;A and Class&nbsp;B Common Stock (collectively, &ldquo;Common Stock&rdquo;).
The holders of outstanding shares of Common Stock vote as one class on all matters submitted to a vote of the stockholders of
the Company. Each holder of shares of Class&nbsp;A Common Stock is entitled to one vote per share, whereas each holder of shares
of Class&nbsp;B Common Stock is entitled to 10 votes per share. No shares of Class&nbsp;B Common Stock are issuable until the
Company completes an underwritten public offering of its Class&nbsp;A Common Stock pursuant to an effective registration statement
under the Securities Act of 1933, as amended, in which the Class&nbsp;A Common Stock is designated for trading on the New York
Stock Exchange or the NASDAQ Global Market (an &ldquo;IPO&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
holders of Common Stock are entitled to share equally, on a per share basis, in any dividends or other distributions declared
by the Board of Directors with respect to the Common Stock. Each share of Class&nbsp;B Common Stock is convertible into one share
of Class&nbsp;A Common Stock at the option of the holder. Each share of Class&nbsp;B Common Stock will automatically convert into
one share of Class&nbsp;A Common Stock upon the written consent of a majority of the Class&nbsp;B stockholders, subject to the
consent of one of the Company&rsquo;s significant shareholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">No
Common Stock dividend was declared by the Company&rsquo;s Board of Directors for the six months ended June 30, 2020 and 2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(12)</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Convertible
    Preferred Stock</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s convertible Preferred Stock currently consists of Series&nbsp;AA convertible Preferred Stock and Series A convertible
Preferred Stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following tables include the activity of the convertible Preferred Stock:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">Repurchased</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">Outstanding</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">as of</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">as of</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">June 30,</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">June 30,</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Authorized</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Issued</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; font: 10pt Times New Roman, Times, Serif; text-align: left">Series A convertible preferred stock</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">59,000,000</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">47,402,573</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">(10,926,589</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">36,475,984</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Series AA convertible preferred stock</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">25,889,968</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">24,870,027</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">24,870,027</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">Repurchased</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">Outstanding</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">as of</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">as of</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">December&nbsp;31,</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">December&nbsp;31,</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Authorized</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Issued</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; font: 10pt Times New Roman, Times, Serif; text-align: left">Series A convertible preferred stock</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">59,000,000</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">47,402,573</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">(10,926,589</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">36,475,984</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Series AA convertible preferred stock</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">25,889,968</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">24,870,027</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">24,870,027</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
holders have various rights and preferences as follows.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(a)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Dividends</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Series AA convertible Preferred Stock and Series&nbsp;A convertible Preferred Stock are entitled to noncumulative dividends of
at least $0.0016 per share before any dividends may be paid on Common Stock. In addition to the dividend preferences discussed
above, the holders of the Series AA convertible Preferred Stock and Series&nbsp;A convertible Preferred Stock are entitled to
share in any dividends paid to holders of the Common Stock on an equal basis as if the Series AA convertible Preferred Stock and
the Series&nbsp;A convertible Preferred Stock had been converted to Common Stock. Such dividends are payable when and as declared
by the Company&rsquo;s Board of Directors. No Series AA convertible Preferred Stock or Series&nbsp;A convertible Preferred Stock
dividends were declared by the Company&rsquo;s Board of Directors for the six months ended June 30, 2020 and 2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(b)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Voting</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
holders of the Series AA convertible Preferred Stock and Series&nbsp;A convertible Preferred Stock are entitled to vote on all
matters presented to the stockholders of the Company for their action or consideration. The holders of the Series AA convertible
Preferred Stock and Series&nbsp;A convertible Preferred Stock are entitled to 10 votes per &ldquo;as converted&rdquo; share of
Class&nbsp;A Common Stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(c)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Optional
    Conversion</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
share of Series AA convertible Preferred Stock and Series&nbsp;A convertible Preferred Stock is convertible at the option of the
holder at any time into Class&nbsp;A Common Stock. The conversion ratio is subject to adjustment for certain dilutive events,
including certain types of stock dividends, stock splits, stock issuances, stock option grants, or a combination of these. As
of both June 30, 2020 and December 31, 2019, approximately 24.9 million shares of Class A Common Stock could be issued based upon
conversion ratios of 1:1 upon optional conversion of all outstanding shares of Series AA convertible Preferred Stock. As of both
June 30, 2020 and December&nbsp;31, 2019, approximately 36.5 million shares of Class&nbsp;A Common Stock could be issued, respectively,
based upon conversion ratios of 1:1 upon optional conversion of all outstanding shares of Series&nbsp;A convertible Preferred
Stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;<B><I>&nbsp;</I></B></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(d)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Mandatory
    Conversion</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left">Each share of Series&nbsp;AA
convertible Preferred Stock and Series&nbsp;A convertible Preferred Stock will automatically convert at the then effective conversion
rate into shares of Class&nbsp;B Common Stock upon the closing of an IPO. Upon a vote or written consent of holders of at least
a majority of Series&nbsp;AA convertible Preferred Stock, all outstanding shares of Series AA convertible Preferred Stock shall
automatically be converted into shares of Class A Common Stock at the then effective conversion rate. Upon a vote or written consent
of holders of at least a majority of Series&nbsp;A convertible Preferred Stock (which must include the consent of a certain significant
shareholder or his designee, as long as such significant shareholder or such designee has Voting Power (as defined in the Company&rsquo;s
Amended and Restated Certificate of Incorporation, the &ldquo;Charter&rdquo;) with respect to at least 20% of the outstanding Series
A convertible Preferred Stock), all outstanding shares of Series A convertible Preferred Stock shall automatically be converted
into shares of Class A Common Stock at the then effective conversion rate. The conversion ratio is subject to adjustment for certain
dilutive events, including certain types of stock dividends, stock splits, or a combination of these. As of June 30, 2020 and December&nbsp;31,
2019, each share of Series&nbsp;AA convertible Preferred Stock and Series&nbsp;A convertible Preferred Stock could be converted,
as described above, into one share of Class&nbsp;B Common Stock or one share of Class&nbsp;A Common Stock.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(e)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Liquidation</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
the occurrence of a Qualified Liquidation Event, as defined in the Charter, each share of Series AA convertible Preferred Stock
is entitled to receive, before any payment may be made to the holders of any other capital stock of the Company (including all
other series of Preferred Stock of the Company outstanding), an amount equal to the greater of (i) the original issuance price
of each share of Series AA convertible Preferred Stock, plus an amount equal to the amount of compounded annual interest that
such original purchase price would yield had it been deposited from the Series AA Preferred Issue Date, as defined in the Charter,
to the date of payment of such liquidation preference, inclusive, at the Three Month London Interbank Offered Rate (in U.S. dollars)
in effect from time to time during such period, plus 50 basis points (subject to a maximum compounded interest rate per annum
of 5%) (as adjusted for dividends in cash or in kind, share subdivisions, combinations, reclassifications, conversions and consolidations
involving the Company&rsquo;s capital stock and any restructuring, recapitalization, merger and combination involving the Company),
plus all declared but unpaid dividends on such share of Series AA convertible Preferred Stock, and (ii) the amount to which the
holder thereof would have received if such holder had converted all of its shares of Series AA convertible Preferred Stock into
shares of Class A Common Stock immediately prior to such Qualified Liquidation Event. Following the payment in full of the Series
AA Liquidation Amount, as defined in the Charter, the holders of the Series&nbsp;A convertible Preferred Stock are entitled to
receive, before any distributions are made to the holders of the Common Stock, an amount equal to the original issuance price
of each share of Series&nbsp;A convertible Preferred Stock plus any declared but unpaid dividends thereon. After the payment of
all preferential amounts required to be paid to the holders of Series AA convertible Preferred Stock and Series A convertible
Preferred Stock, the remaining assets available will be distributed pro rata among the holders of Series AA convertible Preferred
Stock, Series&nbsp;A convertible Preferred Stock and Common Stock as if all the shares had been converted to Common Stock immediately
prior to such Qualified Liquidation Event.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(f)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Right
    of First Refusal</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has a right of first refusal in the event that the holders of Series AA convertible Preferred Stock and Series&nbsp;A
convertible Preferred Stock attempt to sell their shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(g)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Pre-emptive
    Rights.</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain
holders of Series AA convertible Preferred Stock, Series&nbsp;A convertible Preferred Stock and Common Stock have pre-emptive
rights to purchase any shares of Series AA convertible Preferred Stock, Series&nbsp;A convertible Preferred Stock or Common Stock
that the Company proposes to issue other than in connection with an IPO and certain excluded issuances specified in the Stockholders
Agreement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(13)</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Stock-Based
    Compensation</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Stock-based
compensation includes stock option awards issued under the Company&rsquo;s employee incentive plan and restricted stock issued
under a significant shareholder&rsquo;s incentive plan, as further discussed in (a) below. There was no income tax benefit recognized
in the consolidated statements of operations for stock-based compensation arrangements in any of the periods presented.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(a)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Stock
    Incentive Programs</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>2005
Incentive Award Plan:</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September&nbsp;22, 2005, the Board of Directors approved the Company&rsquo;s 2005 Equity Incentive Plan, which was amended in
January 2008, October 2009, December 2011 and September 2015 (the &ldquo;Incentive Award Plan&rdquo;). Under the
Incentive Award Plan, the Company may grant equity incentive awards to employees, directors, and consultants based on the Company&rsquo;s
Class&nbsp;A Common Stock. A committee of the Board of Directors of the Company determines the eligibility, types of equity awards,
vesting schedules, and exercise prices for equity awards granted. Subject to certain adjustments in the event of a change in capitalization
or similar transaction, the Company may issue a maximum of 14,200,000&nbsp;shares of its Class&nbsp;A Common Stock under the Incentive
Award Plan. The Company issues new shares of Class&nbsp;A Common Stock from its authorized share pool to settle stock-based compensation
awards. The exercise price of options granted under the plan shall not be less than the fair value of the Company&rsquo;s Class&nbsp;A
Common Stock as of the date of grant. Options typically vest over the term of four years, and are typically exercisable for a
period of 10&nbsp;years after the date of grant, except when granted to a holder who, at the time the option is granted, owns
stock representing more than 10% of the voting power of all classes of stock of the Company or any subsidiaries, in which case,
the term of the option shall be no more than five&nbsp;years from the date of grant. In September&nbsp;2015, the Incentive Award
Plan was amended to permit additional awards to be made after the tenth anniversary of the original adoption of said plan.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Significant
Shareholder Incentive Plan:</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2016, a significant shareholder established an incentive program (the&nbsp;&ldquo;Significant Shareholder Incentive
Program&rdquo;) where he caused to be transferred a total of 5,198,458&nbsp;shares of the Company&rsquo;s Series&nbsp;A
Preferred Stock from Tekhill USA LLC, a limited liability company fully owned by the significant shareholder, into the Fred
Chang Partners Trust (the&nbsp;&ldquo;Trust&rdquo;). In March&nbsp;and May&nbsp;2016, the Trust entered into restricted share
award agreements (the&nbsp;&ldquo;Award Agreements&rdquo;) with several key executives of the Company, under which the Trust
granted a total of 5,090,157 restricted shares of the Company&rsquo;s Series&nbsp;A Preferred Stock to those executives to be
vested over a 15-year period in equal annual installments on each anniversary date of the grant date. As of December&nbsp;31,
2016, the Award Agreements were terminated with a concurrent offer from the significant shareholder to re-establish the
Significant Shareholder Incentive Program. During the year ended December 31, 2017, the re-established incentive program (the
&ldquo;Re-established Significant Shareholder Incentive Program&rdquo;) granted a total of 3,898,843 restricted shares of the
Company&rsquo;s Series A Preferred Stock to a subset of the same recipients with substantially the same terms as those under
the Significant Shareholder Incentive Program. The Re-established Significant Shareholder Incentive Program subsequently
modified the vesting period from 15 years to 10 years during the year ended December 31, 2017, which did not have a
significant impact on the consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(b)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Stock
    Compensation Valuation Assumptions</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
fair value of each option award granted under the Incentive Award Plan is estimated using the Black-Scholes-Merton option pricing
model on the date of grant. This model requires the input of highly complex and subjective variables. These variables include,
but are not limited to, the expected stock price volatility over the expected life of the awards and actual and projected employee
stock option exercise behavior with the following inputs: risk-free interest rate, expected stock price volatility, forfeiture
rate, expected term, dividend yield and weighted average grant date fair value.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
risk-free interest rate is based on the currently available rate on a U.S.&nbsp;Treasury zero-coupon issue with a remaining term
equal to the expected term of the option converted into a continuously compounded rate. The expected volatility of stock options
is based on a review of the historical volatility and the implied volatility of a peer group of publicly traded companies comparable
to the Company. In evaluating comparability, the Company considered factors such as industry, stage of life cycle, and size. After
the adoption of Accounting Standards Update No. 2016-09 <I>Compensation-Stock Compensation (Topic 718): Improvements to Employee
Share-Based Payment Accounting</I> as of January 1, 2017, the Company elected to continue to estimate the total number of awards
for which the requisite service period will not be rendered based on historical data. The expected term assumption used by the
Company reflects the application of the simplified method set out in Securities and Exchange Commission Staff Accounting Bulletin
No.&nbsp;110, Shared-Based Payment. The simplified method defines the expected term of an option as the average of the contractual
term of the options and the weighted average vesting period for all option tranches. The dividend yield reflects the Company&rsquo;s
dividend rate on the date of grant. The Company did not grant any stock options during the six months ended June 30, 2019. For
the six months ended June 30, 2020, the Company granted stock options representing the right to purchase a total of 8,888,000 shares
of the Company&rsquo;s Class A Common Stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
cost of the restricted shares is determined using the fair value of the Company&rsquo;s Series&nbsp;A Convertible Preferred Stock
on the date of the grant. Compensation expense is recognized on a straight-line basis over the vesting period. There was no grant
of the restricted shares under the Re-established Significant Shareholder Incentive Program during the six months ended June 30,
2020 and 2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(c)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Stock
    Option and Restricted Stock Activity</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Stock
Option</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table summarizes the activity for all stock options granted:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">Average</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">Weighted</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">remaining</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">Aggregate</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">average</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">contractual</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">intrinsic</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">Options</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">exercise</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">terms</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">value</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">outstanding</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">price</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">(in
    years)</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">(in&nbsp;thousands)</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; font: 10pt Times New Roman, Times, Serif">Outstanding at December 31, 2019</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">2,602,178</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">2.54</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt">Exercised</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&mdash;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 9pt">Grant</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">8,888,000</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">3.77</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt; padding-left: 9pt">Forfeited
    or expired</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(6,784</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: right">4.24</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">Outstanding at June 30, 2020</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">11,483,394</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: right">3.49</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: right">8.69</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: right">2,330</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">Vested and expected to vest at June 30, 2020</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">10,594,594</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">3.47</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">8.58</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,330</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">Exercisable at June 30, 2020</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,595,394</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2.53</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">4.31</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">2,330</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the six months ended June 30, 2020 and 2019, the total intrinsic value of stock options exercised was both $0, and the compensation
expense for stock options granted included in &ldquo;Selling, general and administrative expenses&rdquo; in the consolidated statements
of operations totaled $0.2 million and $0.1 million, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of June 30, 2020 and December&nbsp;31, 2019, there were $8.1 million and $0.1 million, respectively, of unrecognized compensation
costs related to nonvested options. The weighted average remaining vesting term of the stock option was 3.96 years as of June
30, 2020.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Restricted
Stock</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table summarizes the activity for restricted stock issued from the Fred Chang Partners Trust under the Re-established
Significant Shareholder Incentive Program:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center">Weighted-<BR> average</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Shares</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">grant
    date<BR> fair value</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif">Unvested at December 31, 2019</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">2,358,561</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">1.58</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">Vested</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">(112,313</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1.58</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">Cancelled</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(2,246,248</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">1.58</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">Unvested at June 30, 2020</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1.58</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the six months ended June 30, 2020 and 2019, the compensation expense for restricted shares granted included in &ldquo;Selling,
general and administrative expenses&rdquo; in the consolidated statement of operations were immaterial.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
March 31, 2020, all unvested restricted stocks were cancelled. As of June 30, 2020, the Company had no unrecognized compensation
costs related to restricted stock. As of December&nbsp;31, 2019, there were $3.4 million of unrecognized compensation costs related
to restricted stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(d)</I></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Common
    Stock Valuations</I></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
exercise prices of stock options and restricted stock granted were determined contemporaneously by the Company&rsquo;s Board of
Directors based on the estimated fair value of the underlying Class&nbsp;A Common Stock and Series A convertible Preferred Stock.
The Class&nbsp;A Common Stock and Series A convertible Preferred Stock valuations were based on a combination of the income approach
and two market approaches, which were used to estimate the total enterprise value of the Company. The income approach quantifies
the present value of the future cash flows that management expects to achieve from continuing operations. These future cash flows
are discounted to their present values using a rate corresponding to the Company&rsquo;s estimated weighted average cost of capital.
The Company&rsquo;s weighted average cost of capital is calculated by weighting the required return on interest-bearing debt and
common equity capital in proportion to their estimated percentages in the Company&rsquo;s capital structure. The market approach
considers multiples of financial metrics based on acquisition values or quoted trading prices of comparable public companies.
An implied multiple of key financial metrics based on the trading and transaction values of publicly traded peers is applied to
the Company&rsquo;s similar metrics in order to derive an indication of value. A marketability discount is then applied to reflect
the fact that the Company&rsquo;s Class&nbsp;A Common Stock and Series A convertible Preferred Stock are not traded on a public
exchange. The amount of the discount varies based on management&rsquo;s expectation of effecting a public offering of the Company&rsquo;s
Class&nbsp;A Common Stock within the ensuing 12 months. The enterprise value indications from the income approach and market approaches
were used to estimate the fair value of the Company&rsquo;s Class&nbsp;A Common Stock and Series A convertible Preferred Stock
in the context of the Company&rsquo;s capital structure as of each valuation date. Each valuation was based on certain estimates
and assumptions. If different estimates and assumptions had been used, these valuations could have been different.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(14)</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Net
    Income (Loss) per Share</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Basic
earnings per share of Common Stock is calculated by dividing net income available to holders of Common stock by the weighted average
number of shares of Common Stock outstanding for the period. Under the two-class method, undistributed net income is allocated
between shares of Common Stock and participating securities based on their participating rights. The diluted earnings per share
of Common Stock calculation assumes the issuance of all dilutive potential common shares outstanding. Dilutive potential Common
Stock consists of incremental shares of Class A Common Stock issuable upon the exercise of the stock options and upon conversion
of all Preferred Stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
calculating the numerator of diluted earnings per share under the two-class method, undistributed net income is re-allocated to
the common shares and participating securities that are assumed to be outstanding for diluted earnings per share purposes. In
doing so, the undistributed net income allocated to common shares and participating securities for purposes of basic earnings
per share is re-allocated in accordance with the sequencing rules of the FASB authoritative guidance to give effect to the potential
common shares and participating securities that are assumed to be outstanding for purpose of computing diluted earnings per share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Basic
and diluted net loss per share is presented using the two-class method required for participating securities: Series AA convertible
Preferred Stock, Series A convertible Preferred Stock and Class A Common Stock. Basic net loss per share is computed using the
weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed using
the weighted-average number of shares of common stock and, if dilutive, common stock equivalents outstanding during the period.
The Company&rsquo;s common stock equivalents consist of shares of common stock issuable upon the exercise of stock options and
the conversion of Series AA convertible Preferred Stock and Series A convertible Preferred Stock. For the periods in which the
Company has generated net loss, the basic and diluted net loss per share are the same because common stock equivalents are excluded
from diluted net loss per share due to their antidilutive impact.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table summarizes the calculation of basic and diluted net income (loss) per common share (in thousands, except per share
data):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Six
    Months Ended<BR>
    June 30,</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; font: bold 10pt Times New Roman, Times, Serif">Reconciliation of
    net income attributable to Newegg Inc. to undistributed net income allocable to common stockholders for the basic computation</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Net
    income (loss)</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">18,939</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">(15,469</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt; text-indent: -10pt; padding-left: 10pt">Less:
    undistributed net income allocable to Series A and Series AA convertible Preferred Stocks</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(18,682</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt; text-indent: -10pt; padding-left: 10pt">Undistributed
    net income (loss) allocable to common stockholders of Newegg Inc. for basic earnings per share</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">257</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(15,469</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Basic earnings per share</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-indent: -10pt; padding-left: 10pt">Basic weighted
    average shares outstanding</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">849</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">849</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-indent: -10pt; padding-left: 10pt">Basic earnings
    (loss) per share</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">0.30</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(18.22</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Diluted earnings per share</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: -10pt; padding-left: 10pt">Basic weighted average shares
    outstanding</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">849</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">849</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1.5pt; text-indent: -10pt; padding-left: 10pt">Dilutive
    effect of stock options</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">728</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-indent: -10pt; padding-left: 10pt">Diluted
    weighted average shares outstanding</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">1,577</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">849</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt; text-indent: -10pt; padding-left: 10pt">Diluted
    earnings (loss) per share</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">0.16</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">(18.22</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following shares were excluded from the calculation of diluted net loss per share calculation as their effect would have been
anti-dilutive (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">Six
    Months Ended<BR>
    June 30,</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left">Stock options</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">1,308</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">3,834</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; text-indent: -10pt; padding-left: 10pt">Common stock
    issuable from the conversion of Series AA convertible Preferred Stock and Series A convertible Preferred Stock</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">61,346</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">61,346</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 5pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(15)</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Commitments
    and Contingencies</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">From
time to time, the Company is a party to various lawsuits, claims, and other legal proceedings that arise in the ordinary course
of business. The Company discloses contingencies deemed to be reasonably possible and accrues loss contingencies when, in consultation
with legal advisors, it is concluded that a loss is probable and reasonably estimable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">In February 2018, the Commonwealth
of Massachusetts Department of Revenue issued a notice of intent to assess sales/use taxes on the Company for the period from October
1, 2017 through October 31, 2017 for a total assessment of $652,255 including penalties and interest. The Department of Revenue
subsequently reduced this amount to $295,911. In May 2020, the Company received from the Commonwealth of Massachusetts Department
of Revenue another notice of assessment for sales and use taxes for the months of November 2017 through September 2018 in the amount
of $2,721,370, including penalties and interest. The Company has appealed these assessments and the Company intends to vigorously
protest them. The outcome of this matter or the timing of such payments, if any, cannot be predicted at this time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
December 2014, an individual plaintiff sued Newegg.com Americas Inc. (&ldquo;Newegg.com Americas&rdquo;) in Superior Court in
Los Angeles County, California, alleging that Newegg.com Americas had engaged in deceptive advertising practices and seeking to
certify a class action. In 2016, the Court sustained Newegg.com Americas&rsquo; demurrer to the plaintiff&rsquo;s claims without
leave to amend. The plaintiff appealed, and in July 2018 the Court of Appeal reversed the decision of the trial court, thus allowing
the case to proceed. The matter is now pending in the trial court. The Company does not believe that a loss is probable and intends
to vigorously defend itself and its subsidiaries. Depending on the amount and timing, an unfavorable result could materially affect
the Company&rsquo;s business, consolidated results of operations, financial position or cash flows.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to the legal proceedings mentioned above, from time to time, the Company may become involved in legal proceedings arising
in the ordinary course of business. There can be no assurance with respect to the outcome of any legal proceeding. The outcome
of the litigation described above, the other pending lawsuits filed against the Company and other claims, including those that
may be made in the future, may be adverse to the Company, and the monetary liability and other negative operational or financial
impact may be material to the Company&rsquo;s consolidated results of operations, financial position, and cash flows.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 5pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(16)</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Employee
    Benefit Plan</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company maintains a 401(k) defined-contribution plan for the benefit of its eligible employees. All full-time domestic employees
who have completed at least six months of service and are at least 18&nbsp;years of age are eligible to participate in the plan.
Eligible employees may elect to contribute up to 100% of their eligible compensation. The Company&rsquo;s matching contributions
are made at the discretion of the Company&rsquo;s Board of Directors. In addition, the Company may make a profit-sharing contribution
at the sole discretion of the Board of Directors. Total contributions by the Company for the six months ended June 30, 2020 and
2019 were $1.0 million and $0.9 million, respectively. Contributions made by the Company are immediately 100% vested.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 5pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(17)</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Related
    Party Transactions</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Investment</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 17, 2018, the Company acquired an equity interest in Mountain Capital Fund L.P. from Pegasus. The sole owner of Pegasus
is the spouse of a member of the Company&rsquo;s Board of Directors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Loans
to Affiliate</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 5pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 17, 2019, the Company loaned $15.0 million to Digital Grid under a term loan agreement with a maturity date of April
30, 2020&nbsp;and a fixed interest rate of 5.0% (the &ldquo;$15.0 Million Loan&rdquo;). The $15.0 Million Loan was subsequently
extended to December 31, 2020.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the six months ended June 30, 2020, the Company recorded interest income of $0.4 million from loans to affiliate in interest income
in the consolidated statement of operations. As of June 30, 2020 and December 31, 2019, the amount of interest receivable as a
component of &ldquo;Dues from related parties&rdquo; in the consolidated balance sheets was immaterial.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Loans
from Affiliate</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 14, 2019, the Company entered into three loan agreements with BARD Company Limited, an entity affiliated with our Chief
Executive Officer, pursuant to which the Company borrowed a total of $15.0 million. For all of the three loans, the maturity date
was March 31, 2019 unless extended to April 30, 2019 in accordance with the terms of the loan agreements, and the interest rate
is 6% per annum. The Company repaid the three loans in their entirety as of March 8, 2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 5pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Sales
to Related Parties</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Due
from related parties and net sales to related parties primarily reflect sales of finished goods and services with the exception
of loans to affiliate as discussed above.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of&nbsp;both June 30, 2020 and December 31, 2019,&nbsp;due from related parties represent amounts receivable of&nbsp;$1.5 million,
due from Digital Grid.&nbsp;Digital Grid is determined to be&nbsp;a related party by virtue of common control. There were no sales
to this related party during the&nbsp;six months ended June 30, 2020 and 2019.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of&nbsp;June 30, 2020 and December 31, 2019,&nbsp;due from related parties represent amounts receivable of&nbsp;$4.3 million and&nbsp;$4.3
million, respectively, due from Connect Technova Inc. (&ldquo;Connect Technova&rdquo;).&nbsp;Connect Technova&nbsp;is determined
to be&nbsp;a related party by virtue of common control. Sales during the&nbsp;six months ended June 30, 2020 and 2019&nbsp;to
this related party were&nbsp;immaterial.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 5pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of&nbsp;June 30, 2020 and December 31, 2019,&nbsp;amount due to related parties was immaterial.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(18)</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Segment
    Information</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">The Company&rsquo;s Chief Executive
Officer, who is the chief operating decision maker&nbsp;(&ldquo;CODM&rdquo;) reviews financial information presented on a consolidated
basis. There are no segment managers who are held accountable for operations, operating results and plans for levels or components
below the consolidated unit level. The Company considers itself to be operating within one reportable segment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"> Revenue from external customers
for each group of similar products and services are not reported to the CODM. The Company&rsquo;s product categories as well as
the aggregation of the Company&rsquo;s product SKUs (&ldquo;Stock Keeping Units&rdquo;) into product categories regularly change.
Separate identification of this information is impractical, as it is not readily available and the cost to develop it would be
excessive. The following table summarizes net sales from external customers for the six months ended June 30, 2020 and 2019 (in
thousands): </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap"> &nbsp; </TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> Six
    Months Ended June 30, </TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap"> &nbsp; </TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 2020 </TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 2019 </TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left"> United States </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 9%; text-align: right"> 780,689 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 9%; text-align: right"> 715,461 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> Canada </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 57,200 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 61,772 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt"> Rest of world </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 24,810 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 20,193 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-bottom: 4pt"> Total </TD><TD STYLE="font-weight: bold; padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right"> 862,700 </TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right"> 797,426 </TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table summarizes net property, plant and equipment by country (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">June&nbsp;30,<BR>
    2020</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1.5pt solid">December&nbsp;31,<BR>
    2019</TD><TD STYLE="padding-bottom: 1.5pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; font: 10pt Times New Roman, Times, Serif; text-align: left">United States</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">19,414</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 9%; font: 10pt Times New Roman, Times, Serif; text-align: right">20,650</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">Canada</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">289</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">447</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">China</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">25,395</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">26,033</TD><TD STYLE="padding-bottom: 1.5pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">Total</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">45,098</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">47,130</TD><TD STYLE="padding-bottom: 4pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Notes
to Consolidated Financial Statements</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(Unaudited)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(19)</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>COVID-19
    Considerations</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 48px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
    January 30, 2020, the World Health Organization (&ldquo;WHO&rdquo;) announced a global health emergency because of a new strain
    of coronavirus originating in Wuhan, China (the &ldquo;COVID-19 outbreak&rdquo;) and the risks to the international community
    as the virus spread globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic,
    based on the rapid increase in exposure globally.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 48px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
    March 27, 2020, the &lsquo;Coronavirus Aid, Relief, and Economic Security Act&rsquo; (the CARES Act) was signed into law by
    the president. The CARES act provides several favorable tax provisions. The Company evaluated the impacts of CARES Act and
    determined it has no material impact to the income tax provision.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 48px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    full impact of the COVID-19 outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the
    full magnitude that the pandemic will have on the Company&rsquo;s financial condition, liquidity and future results of operation.
    Management is actively monitoring the global situation on its financial condition, liquidity, operations, suppliers, industry
    and workforce. Given the almost daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the
    Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition or
    liquidity for fiscal year 2020. </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 48px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    Company&rsquo;s online business and warehouses remain active to serve our customers during the COVID-19 outbreak, and for
    the six months ended June 30, 2020, the Company has seen increased demand for its products and services as compared with the
    six months ended June 30, 2019.</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(5)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">However,
    the course of the COVID-19 outbreak remains uncertain, and a prolonged global economic slowdown and increased unemployment
    could have a material adverse impact on economic and market conditions, which in turn could lead to a reduced demand for the
    Company&rsquo;s products and services.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 48px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(6)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
    a consequence of the COVID-19 outbreak, the Company has experienced occasional supply constraints, primarily in the form of
    delays in shipment of inventory. The Company has also experienced some increases in the cost of certain products, as well
    as a drop in promotions by some manufacturers. While the Company considers such events to be relatively minor and temporary,
    continued supply chain disruptions could lead to delayed receipt of, or shortages in, inventory and higher costs, and negatively
    impact sales in fiscal year 2020.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Although
the Company cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time, if the pandemic continues,
it may have an adverse effect on the Company&rsquo;s results of future operations, financial position and liquidity in fiscal
year 2020.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(20)</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Subsequent
    Events</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has evaluated subsequent events from the balance sheet date through October 23, 2020, the date the consolidated financial
statements were issued.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
                                         September 2020, the Company paid back the revolving credit facility of $1.4 million in
                                         full.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
                                         October 2020, the Company entered into a lease agreement for 275,985 square feet of office
                                         and warehouse space, with commencement date on November 1, 2020. The lease has a 100
                                         month term, and rental cost of approximately $193,000 per month.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-transform: uppercase; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><A NAME="NEW_003"></A>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>CONSOLIDATED
FINANCIAL STATEMENTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>FOR THE YEARS
ENDED DECEMBER 31, 2019, 2018 AND 2017</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><A NAME="fin1_001"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Report
of Independent Registered Public Accounting Firm</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Stockholders and Board of Directors</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Newegg Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">City of Industry, CA</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Opinion on the Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">We have audited the accompanying
consolidated balance sheet of Newegg Inc. and subsidiaries (the &ldquo;Company&rdquo;) as of December 31, 2019, the related
consolidated statements of operations, comprehensive loss, temporary equity and equity (deficit), and cash flows for the year
then ended, and the related notes (collectively referred to as the &ldquo;consolidated financial statements&rdquo;). In our
opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the
Company at December 31, 2019, and the results of its operations and its cash flows for the year then ended<B>,&nbsp;</B>in
conformity with accounting principles generally accepted in the United States of America.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> We have also audited the retrospective
adjustments to the 2018 and 2017 consolidated financial statements to reclassify the Series A and AA convertible preferred stock
to temporary equity as described in Note 2(y) to the consolidated financial statements. In our opinion, such retrospective adjustments
are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the 2018 and
2017 consolidated financial statements of the Company other than with respect to the retrospective adjustments, and accordingly,
we do not express an opinion or any other form of assurance on the 2018 and 2017 consolidated financial statements taken as a
whole. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Change in Accounting Method Related to Leases</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As discussed in Note 2 to the consolidated
financial statements, the Company has changed its method of accounting for leases during the year ended December 31, 2019, due
to the adoption of Accounting Standards Codification 842, &ldquo;Leases.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Basis for Opinion</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">These consolidated financial statements are
the responsibility of the Company&rsquo;s management. Our responsibility is to express an opinion on the Company&rsquo;s consolidated
financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (&ldquo;PCAOB&rdquo;) and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">We conducted our audit in accordance with
the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required
to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are
required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion
on the effectiveness of the Company&rsquo;s internal control over financial reporting. Accordingly, we express no such opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Our audit included performing procedures
to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe
that our audit provides a reasonable basis for our opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">/s/ BDO USA, LLP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have served as the Company&rsquo;s auditor since 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Los Angeles, California</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> October 23, 2020, except for the retrospective adjustments
to the classification of the Series A and AA convertible preferred stock to temporary equity for the 2018 and 2017 consolidated
financial statements, as to which the date is December 9, 2020 </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Report of Independent Registered Public
Accounting Firm&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To the Stockholders and Board of Directors<BR>
Newegg Inc.:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Opinion on the Consolidated Financial Statements</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">We have audited, before the effects of
the adjustment to retrospectively apply the change in the classification of the Series A convertible Preferred Stock and
Series AA convertible Preferred Stock to temporary equity as described in Note 2(y), the consolidated balance sheet of Newegg
Inc. and subsidiaries (the Company) as of December&nbsp;31, 2018, the related consolidated statements of operations,
comprehensive loss, temporary equity and equity (deficit), and cash flows for each of the years in the two-year period ended
December&nbsp;31, 2018, and the related notes (collectively, the consolidated financial statements). The 2018 and 2017
consolidated financial statements before the effects of the adjustment described in Note 2(y) are not presented herein. In
our opinion, the consolidated financial statements, before the effects of the adjustments to retrospectively apply the change
in the classification of the Series A convertible Preferred Stock and Series AA convertible Preferred Stock to temporary
equity as described in Note 2(y), present fairly, in all material respects, the financial position of the Company as of
December&nbsp;31, 2018, and the results of its operations and its cash flows for each of the years in the two-year period
ended December&nbsp;31, 2018, in conformity with U.S. generally accepted accounting principles.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">We were not engaged to audit, review, or
apply any procedures to the adjustments to retrospectively apply the change in the classification of the Series A convertible
Preferred Stock and Series AA convertible Preferred Stock to temporary equity as described in Note 2(y) and, accordingly, we do
not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied.
Those adjustments were audited by other auditors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><I>Basis for Opinion</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">These consolidated financial statements are
the responsibility of the Company&rsquo;s management. Our responsibility is to express an opinion on these consolidated financial
statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">We conducted our audit in accordance with
the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing
procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud,
and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial
statements. We believe that our audit provides a reasonable basis for our opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">/s/ KPMG LLP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We served as the Company&rsquo;s auditor from 2014 to 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Irvine, California<BR>
April 18, 2019</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="fin1_002"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated
Balance Sheets</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">December
31, 2019 and 2018</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(In
thousands, except par value)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">Assets</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Current assets:</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left; text-indent: -9pt; padding-left: 0.25in">Cash and cash equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">79,750</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">56,437</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 0.25in">Restricted cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">797</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">242</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 0.25in">Accounts receivable, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">54,185</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">88,161</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -9pt; padding-left: 0.25in">Inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">109,509</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">223,908</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 0.25in">Income taxes receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,521</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,520</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 0.25in">Prepaid expenses and other current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,206</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,611</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">Due from related parties</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">21,654</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,618</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 27pt">Total current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">282,622</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">394,497</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Property and equipment, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">47,130</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">57,442</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Noncurrent deferred tax assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,041</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Equity investment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,457</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">59,617</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Investment at cost</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Right of use assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">38,099</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Other noncurrent assets</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6,448</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6,434</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 27pt">Total assets</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">396,797</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">533,024</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 9pt">Liabilities, Temporary Equity and Equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Current liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 0.25in">Accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">165,653</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">266,426</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 0.25in">Accrued liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">49,396</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">44,949</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 0.25in">Deferred revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,846</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">37,078</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -9pt; padding-left: 0.25in">Line of credit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,379</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">42,867</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 0.25in">Current portion of long-term debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">258</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">248</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">Lease liabilities - current</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">8,585</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 27pt">Total current liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">256,117</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">391,568</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Long-term debt, less current portion</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,223</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,424</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Income taxes payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">675</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">650</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Lease liabilities - noncurrent</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,643</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Other liabilities &nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">66</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">929</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 27pt">Total liabilities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">289,724</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">408,571</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Commitments and contingencies (note 15)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Temporary equity:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -9pt; padding-left: 0.25in">Series AA convertible Preferred Stock, $.001 par value; 25,890 shares
    authorized as of both December 31, 2019 and 2018; 24,870 shares issued and outstanding as of both December&nbsp;31, 2019 and
    2018</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">187,146</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">187,146</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">Series A convertible Preferred
    Stock, $.001 par value; 59,000 shares authorized; 36,476 shares issued and outstanding as of both December 31, 2019 and 2018</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">655</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">655</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Total Temporary equity</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">187,801</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">187,801</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt">Equity (deficit): &nbsp; &nbsp; &nbsp; &nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 0.25in">Class A Common Stock, $.001 par value; 142,000 shares
    authorized; 849 shares issued and outstanding as of both December 31, 2019 and 2018</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 0.25in">Class B Common Stock, $.001 par value; 59,000 shares
    authorized; none issued or outstanding as of December 31, 2019 and 2018</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 0.25in">Additional paid-in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">744</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 0.25in">Accumulated other comprehensive income (loss)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(505</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">628</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 0.25in">Accumulated deficit</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(80,968</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(63,977</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 27pt">Total deficit</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(80,728</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(63,348</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 27pt">Total liabilities, temporary equity
    and equity</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">396,797</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">533,024</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">See accompanying
notes to consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="fin1_003"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated
Statements of Operations</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Years
ended December 31, 2019, 2018 and 2017</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(In
thousands, except per share data)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left">Net sales &nbsp; &nbsp; &nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1,533,928</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">2,022,437</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">2,158,131</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt">Cost of sales &nbsp; &nbsp; &nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,369,054</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,816,834</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,925,990</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Gross profit &nbsp; &nbsp; &nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">164,874</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">205,603</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">232,141</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other operating income/(expense)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,314</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,555</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">170</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Selling, general, and administrative expenses</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">229,192</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">247,174</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">246,106</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Loss from operations &nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(36,004</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(43,126</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13,795</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Interest income &nbsp; &nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">586</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,484</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,801</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Interest expense &nbsp; &nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,945</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,595</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,096</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Other income, net &nbsp; &nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,184</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,599</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,216</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Gain from sale of and equity income from equity method investments</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">21,777</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">9,617</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">154</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Loss before provision for income taxes&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(12,402</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(32,021</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(11,720</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Provision for income taxes &nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,589</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,582</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">247</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Net loss &nbsp; &nbsp; &nbsp; &nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(16,991</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(33,603</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(11,967</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">Less: Dividend or deemed dividend paid to Series A convertible Preferred Stock</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(19,960</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(19,247</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Net loss attributable to common stock</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(16,991</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(53,562</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(31,214</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Net loss per share, basic and diluted</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(20.01</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(80.68</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(44.04</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Weighted average number of common stock outstanding
    used in computing per share amounts, basic and diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">849</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">664</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">709</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
accompanying notes to consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<!-- Field: Page; Sequence: 321; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->87<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><A NAME="fin1_004"></A>NEWEGG
INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">Consolidated Statements
of Comprehensive Loss</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">Years ended December
31, 2019, 2018 and 2017</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">(In thousands)</P>



<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left">Net loss &nbsp; &nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(16,991</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(33,603</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(11,967</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Foreign currency translation adjustments</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,133</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(2,974</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,222</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive loss</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(18,124</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(36,577</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(9,745</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
</TABLE>


<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
accompanying notes to consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->88<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="fin1_005"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated
Statements of Temporary Equity and Equity (</FONT>Deficit)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Years
ended December 31, 2019, 2018 and 2017</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(In
thousands)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Series
    B-1</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Series
    B-2</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">redeemable</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">redeemable</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Series
    AA</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Series
    A</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">convertible</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">convertible</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">convertible</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">convertible</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Class
    A</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Accumulated</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(Accumulated</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">preferred</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">preferred</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">preferred</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">preferred</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Total</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">common</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Additional</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">other</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">deficit)/</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">stock</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">stock</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">stock</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">stock</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">temporary</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">stock</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">paid-In</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">comprehensive</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Retained</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Total</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Shares</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Amount</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Shares</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Amount</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Shares</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Amount</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Shares</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Amount</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">equity</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Shares</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Par&nbsp;value</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">capital</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">income</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">earnings</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">equity</FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Balance
    at December 31, 2016</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0%; border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0%; border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">2,637</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0%; border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0%; border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0%; border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0%; border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0%; border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">42,898</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0%; border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">770</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0%; border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">3,407</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0%; border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">709</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0%; border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">1</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0%; border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">30,493</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0%; border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">1,380</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0%; border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">7,094</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 0%; border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="width: 6%; border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">38,968</FONT></TD><TD STYLE="width: 0%; padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Net
    loss</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(11,967</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(11,967</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Other
    comprehensive income</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">2,222</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">2,222</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Stock-based
    compensation</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">3,996</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">3,996</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Issuance
    of Series AA convertible Preferred Stock, net of issuance costs</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">24,870</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">187,146</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">187,146</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Deemed
    dividend</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(19,247</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(19,247</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Redemption
    of Series B-1 redeemable convertible Preferred Stock</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(2,637</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(2,637</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Balance
    at December 31, 2017</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">24,870</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">187,146</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">42,898</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">770</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">187,916</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">709</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">1</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">15,242</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">3,602</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(4,873</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">13,972</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Net
    loss</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(33,603</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(33,603</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Other
    comprehensive loss</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(2,974</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(2,974</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Issuance
    of Common Stock</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">234</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">380</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">380</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Stock-based
    compensation</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">3,895</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">3,895</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Deemed
    dividend</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(19,517</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(443</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(19,960</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.25in; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Share
    repurchases</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(6,422</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(115</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(115</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(94</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(25,058</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(25,058</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Balance
    at December 31, 2018</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">24,870</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">187,146</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">36,476</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">655</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">187,801</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">849</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">1</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">628</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(63,977</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(63,348</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Net
    loss</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(16,991</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(16,991</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Other
    comprehensive loss</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(1,133</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(1,133</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.25in; text-align: left; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Stock-based
    compensation</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">744</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">744</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">Balance
    at December 31, 2019</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">24,870</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">187,146</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">36,476</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">655</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">187,801</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">849</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">1</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">744</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(505</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(80,968</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">(80,728</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 8pt">)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
accompanying notes to consolidated financial statements.</FONT></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="fin1_006"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated
Statements of Cash Flows</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Years
ended December 31, 2019, 2018 and 2017</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(In
thousands)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Cash flows from operating activities:</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left">Net loss &nbsp; &nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(16,991</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(33,603</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(11,967</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">Adjustments to reconcile net loss to net cash used in operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.25in; text-align: left">Depreciation and amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,708</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,230</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,625</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.25in; text-align: left">Bad debt expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">882</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">566</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,640</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.25in; text-align: left">Provision for obsolete and excess inventory</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,278</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,721</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,590</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.25in; text-align: left">Stock-based compensation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">744</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,895</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,996</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.25in; text-align: left">Gain on equity method investment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(21,777</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9,617</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(154</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.25in; text-align: left">Deferred income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,007</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,173</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(694</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.25in; text-align: left">Loss (Gain) on disposal of property and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(29,726</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(30</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">284</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.25in; text-align: left">Changes in operating assets and liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.375in; text-align: left">Accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33,104</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,481</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">746</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.375in">Inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">110,140</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,252</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(16,882</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.375in; text-align: left">Prepaid expenses and other assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,525</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,158</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,635</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.375in; text-align: left">Accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(100,733</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(18,523</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(25,898</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.375in; text-align: left">Accrued liabilities and other liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,038</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,946</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,862</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.375in; text-align: left">Deferred revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11,226</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,223</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,087</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt">Dues from affiliate</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,036</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,955</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,089</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.5in; text-align: left; padding-bottom: 1.5pt">Net cash used in operating activities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(10,077</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(62,887</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(21,219</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Cash flows from investing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">Loans to affiliate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(15,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(20,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(62,574</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">Loan repayments from affiliate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">70,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">Insurance settlement proceeds</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">900</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">Acquisition of equity investments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(58,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">Payments to acquire property and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(10,283</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,046</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,413</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">Proceeds on disposal of property and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">38,550</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Sale of equity method investment</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">77,515</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">876</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.5in; text-align: left; padding-bottom: 1.5pt">Net cash provided by (used in) investing activities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">84,682</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(16,046</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(55,111</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Cash flows from financing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">Net proceeds from issuance of preferred stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">168,588</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">Borrowings under line of credit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">98,001</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">123,289</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">63,304</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">Repayments under line of credit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(134,440</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(88,709</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(67,524</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">Borrowings of long-term debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">Repayments of long-term debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13,254</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(251</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(17,748</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">Loan from affiliate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">Repayment of loan from affiliate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(15,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">Debt issuance costs</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(620</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">Proceeds from exercise of stock options</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">380</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">Payment for shares buyback</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(45,134</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Redemption of Series B-1 redeemable convertible
    Preferred Stock</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(2,637</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.5in; text-align: left">Net cash provided by (used in) financing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(49,693</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,955</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">143,983</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Foreign currency effect on cash, cash equivalents and restricted cash</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,044</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(770</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(999</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.5in">Net increase (decrease) in cash, cash equivalents and restricted cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,868</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(77,748</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">66,654</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Cash, cash equivalents and restricted cash:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; padding-bottom: 1.5pt">Beginning of year</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">56,679</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">134,427</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">67,773</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; padding-bottom: 4pt">End of year &nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">80,547</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">56,679</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">134,427</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Supplemental disclosures of cash flow information:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">Cash paid for interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2,634</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,295</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,064</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">Cash paid for income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,034</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,301</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Supplemental Schedule of Noncash Investing Activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">Property and equipment acquisitions included in accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">19</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">262</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">Accrued investment cost included in accrued liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2,579</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">7,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
accompanying notes to consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 10pt"><A NAME="fin1_007"></A><B>NEWEGG
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Notes to Consolidated Financial Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(1)</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Organization
                                         and Description of Business</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Newegg
Inc. (&ldquo;Newegg&rdquo; or the &ldquo;Company&rdquo;) is an electronics-focused e-retailer that offers customers a comprehensive
selection of the latest consumer electronics products, detailed product descriptions and images, &ldquo;how-to&rdquo; information,
and customer reviews via its websites. The Company&rsquo;s strategic focus is based on three key areas: (1) providing a differentiated
and superior online shopping experience, (2) offering reliable and timely product fulfillment, and (3) delivering superior customer
service.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company was incorporated as Newegg Computers in the state of California on February&nbsp;4, 2000. In June&nbsp;2005, Newegg
Inc. was incorporated in the state of Delaware. On September&nbsp;29, 2005, Newegg Computers was merged into Newegg Inc.
under Delaware law with Newegg Inc. being the surviving company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
August&nbsp;2016, the Company entered into a share purchase agreement (the&nbsp;&ldquo;Purchase Agreement&rdquo;) with Hangzhou
Liaison Interactive Information Technology Co., Ltd, (&ldquo;Liaison&rdquo;), a publicly traded company in China. The transaction
was completed on March 30, 2017. Pursuant to the Purchase Agreement, Liaison purchased 490,706&nbsp;shares of Class&nbsp;A Common
Stock and 12,782,546&nbsp;shares of Series&nbsp;A convertible Preferred Stock from existing shareholders for a total consideration
of $91.9&nbsp;million. Additionally, the Company issued, and Liaison purchased, 24,870,027&nbsp;shares of Series&nbsp;AA Convertible
Preferred Stock for a total consideration of $172.2&nbsp;million. Upon the close of this transaction, Liaison, through Digital
Grid (Hong Kong) Technology Co., Limited (&ldquo;Digital Grid&rdquo;), a fully-owned subsidiary of Liaison, became the majority
owner of the Company. See Note 12 &ndash; Redeemable Convertible Preferred Stock and Convertible Preferred Stock for further discussion
about the Company&rsquo;s accounting treatment for this transaction.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table details our subsidiaries as of December 31, 2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap; width: 81%; border-bottom: black 1.5pt solid; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt"><B>&nbsp;Subsidiary</B></FONT></TD>
    <TD STYLE="white-space: nowrap; width: 1%; padding-bottom: 1.5pt; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; width: 18%; border-bottom: black 1.5pt solid; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt"><B>Jurisdiction</B></FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">CAOPC, Inc. </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">United States</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Chief Value Limited </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">Hong Kong</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">ChiefValue.com Inc.</FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">United States</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">INOPC, Inc.</FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">United States</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Magnell Associate, Inc. </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">United States</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Australia Pty Ltd</FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">Australia</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Business Inc. </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">United States</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Canada Inc. </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">Canada</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Capital Inc. </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">Taiwan</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Capital International </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">Cayman Islands</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg China Inc. </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">Cayman Islands</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Commerce (SH) Co., Ltd</FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">China</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Enterprises LLC </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">United States</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Europe, Inc.</FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">Cayman Islands</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Foundation Inc.</FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">United States</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Greater China (Hong Kong) Company Limited</FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">Hong Kong</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg International, Inc. </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">Cayman Islands</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Logistics Services Inc.</FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">United States</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Marketplace Inc.</FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">United States</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg North America Inc. </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">United States</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Recoveries LLC</FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">United States</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Taiwan Inc. </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">Taiwan</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Tech (Chengdu) LTD </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">China</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Tech (China) Co., Ltd. </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">China</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Tech (Shanghai) Co., Ltd. </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">China</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Tech (Xian) Co., Ltd. </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">China</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Tech Corporation </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">Cayman Islands</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Tech Inc. </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">Cayman Islands</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Tech Inc. (TW)</FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">Taiwan</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Tech Research and Development Limited </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">Hong Kong</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Tech Services (Shanghai) Co., Ltd. </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">China</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Tech Support (Shanghai) Co. Ltd. </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">China</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Tech Support Limited </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">Hong Kong</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Tech, Inc. </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">United States</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Texas., Inc.</FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">United States</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Trading (China) Co. Ltd.</FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">China</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg Trading Limited </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">Hong Kong</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg UK, Ltd. </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">United Kingdom</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Newegg.com Americas Inc.</FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">United States</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">NJOPC, Inc.</FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">United States</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Nutrend Automotive Inc. </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">United States</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">OZZO Inc. </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">United States</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">OZZO International </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">Cayman Islands</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">OZZO International Limited </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">Hong Kong</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">OZZO Logistics (China) Co., Ltd. </FONT></TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">China</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Rosewill Inc. </FONT></TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">United States</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">Rosewill Limited</FONT></TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">Hong Kong</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif"><FONT STYLE="font-size: 9.5pt">TNOPC, Inc.</FONT></TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; font-family: Times New Roman,serif; text-align: center"><FONT STYLE="font-size: 9.5pt">United States</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT>&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(2)</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Summary
                                         of Significant Accounting Policies</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(a)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Principles
                                         of Consolidation</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the
United States of America and include the accounts of all consolidated subsidiaries. All intercompany balances and transactions
have been eliminated in consolidation.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"></P>

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<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(b)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Use
                                         of Estimates</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
preparation of the Company&rsquo;s consolidated financial statements in conformity with U.S.&nbsp;generally accepted accounting
principles requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements
and accompanying notes. Estimates are used for, but not limited to, revenue recognition, incentives earned from vendors, investment
valuation, and stock-based compensation. Actual results could differ from such estimates.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(c)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Change
                                         in Accounting Principle</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
January 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842), as amended (&ldquo;ASU 2016-02&rdquo;), which requires lessees
to recognize a right-of-use (&ldquo;ROU&rdquo;) asset and lease liabilities on the balance sheet for most lease arrangements and
expands disclosures about leasing agreements, among other items. The Company adopted ASU 2016-02 using the modified retrospective
transition approach through a cumulative-effect adjustment, which after completing the implementation analysis, resulted in no
adjustment to the Company&rsquo;s January 1, 2019 beginning retained earnings balance. On January 1, 2019, the Company recognized
$26.4 million of ROU operating lease assets and $28.7 million of operating lease liabilities, including noncurrent operating lease
liabilities of $21.0 million, as a result of the adoption. The difference between the ROU operating lease assets and the operating
lease liabilities was primarily due to previously accrued rent expense relating to periods prior to January 1, 2019, and the remaining
prepaid rent balance as of December 31, 2018. The adoption of ASU 2016-02 did not have an impact on the Company&rsquo;s consolidated
results of operations or cash flows.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">As
part of the adoption, the Company elected the package of practical expedients, which among other things, permits the Company to
not reassess whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing
leases, and the initial direct costs for any existing leases. The Company also elected the practical expedient to not assess whether
existing land easements that were not previously accounted for as lease are or contain a lease under the new guidance. The Company
did not elect the hindsight practice expedient to use hindsight when determining lease term and assessing impairment of ROU lease
assets. See Note 9 &ndash; Lease Obligations.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(d)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Reclassifications</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">Certain
prior period amounts have been reclassified to conform to the current period presentation. </FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(e)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Cash
                                         and Cash Equivalents</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cash
and cash equivalents consist primarily of cash on deposit, certificates of deposit, and money market accounts. Cash equivalents
are all highly liquid investments with original maturities of three months or less. Amounts receivable from credit card processors
are also considered cash equivalents as they are both short term and highly liquid in nature, and are typically converted to cash
within three business days. Amounts due to the Company from credit card processors that are classified as cash and cash equivalents
totaled $9.2 million and $11.0 million at December&nbsp;31, 2019 and 2018, respectively.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(f)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Restricted
                                         Cash</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Restricted
cash includes amounts deposited in commercial bank time deposits and money market accounts to collateralize the Company&rsquo;s
deposit obligations. The Company considers restricted cash related to obligations classified as current liabilities to be current
assets and restricted cash related to obligations classified as long-term liabilities as noncurrent assets. At December&nbsp;31,
2019 and 2018, the Company had $0.8 million and $0.2 million, respectively, in restricted cash, primarily related to collateralization
required pursuant to a lease agreement and the restricted cash account required under the Company&rsquo;s health insurance plan.
The restricted cash balance is classified as a current asset in the consolidated balance sheets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following is a reconciliation of cash and cash equivalents, and restricted cash reported within the consolidated balance sheets
that sum to the total of the same such amounts shown in the consolidated statements of cash flows (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Cash and cash equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">79,750</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">56,437</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Restricted cash</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">797</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">242</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Total cash and cash equivalents, and restricted cash</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">80,547</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">56,679</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(g)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Accounts
                                         Receivable</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounts
receivable consist primarily of vendor receivables, which do not bear interest, and represent amounts due for marketing development
funds, cooperative advertising, price protection and other incentive programs offered to the Company by certain vendors. Accounts
receivable also include receivables from business customers on 30- to 60-day credit terms. The Company estimates an allowance
for doubtful accounts based on historical experience and other factors. Accounts receivable are written off when deemed uncollectible.
Recoveries of accounts receivable previously written off are recorded when received. Amounts receivable from business customers
were $14.6 million and $25.9 million, net of allowances of $0.1 million and $0.4 million, at December&nbsp;31, 2019 and 2018,
respectively. See further discussion of amounts receivable related to vendor incentive programs under Incentives Earned from Vendors
below.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(h)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Inventories</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inventories,
consisting of products available for sale, are accounted for using the first-in, first-out (FIFO) method and are valued at the
lower of cost and net realizable value. In-bound freight-related costs are included as part of the cost of merchandise held for
resale. In addition, certain vendor payments are deducted from the cost of merchandise held for resale. The Company records an
inventory provision for refurbished, slow-moving, or obsolete inventories based on historical experience and assumptions of future
demand for product. These allowances are released when the related inventory is sold or disposed of. Amounts of inventory allowances
were $3.7 million and $8.8 million, as of December 31, 2019 and 2018, respectively.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(i)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Property
                                         and Equipment</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property
and equipment are stated at cost, less accumulated amortization and depreciation computed using the straight-line method over
the estimated useful life of each asset. Leasehold improvements are amortized over the lesser of the remaining lease term or the
estimated useful life of the assets. Expenditures for repair and maintenance costs are expensed as incurred, and expenditures
for major renewals and improvements are capitalized. Costs incurred during the application development stage of internal-use software
and website development are capitalized and included in property and equipment. When assets are retired or otherwise disposed
of, the cost and accumulated depreciation or amortization are removed from the accounts, and any gain or loss is reflected in
the Company&rsquo;s consolidated statements of operations. The useful lives for depreciable assets are as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 0.55in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 50%">Buildings</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD>20&ndash;39 years</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Machinery and equipment</TD>
    <TD>&nbsp;</TD>
    <TD>3&ndash;7 years</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Computer and software</TD>
    <TD>&nbsp;</TD>
    <TD>3&ndash;5 years</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Leasehold improvements</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">Lesser of lease term or 10 years</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Capitalized software</TD>
    <TD>&nbsp;</TD>
    <TD>3&ndash;5 years</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Furniture and fixtures</TD>
    <TD>&nbsp;</TD>
    <TD>5&ndash;7 years</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(j)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Leases</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company defines lease agreements at their inception as either operating or finance leases depending on certain defined criteria.
Certain lease agreements may entitle the Company to receive rent holidays, other incentives, or periodic payment increases over
the lease term. Accordingly, rent expense under operating leases is recognized on the straight-line basis over the original lease
term, inclusive of predetermined minimum rent escalations or modifications and rent holidays.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"></P>

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<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(k)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Impairment
                                         of Long-Lived Assets</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluates the recoverability of long-lived assets for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. The impairment test comprises two steps. The first step compares
the carrying amount of the asset to the sum of expected undiscounted future cash flows. If the sum of expected undiscounted future
cash flows exceeds the carrying amount of the asset, no impairment is taken. If the sum of expected undiscounted future cash flows
is less than the carrying amount of the asset, a second step is warranted and an impairment loss is measured as the amount by
which the carrying amount of the asset exceeds its fair value calculated using the present value of estimated net future cash
flows. There have been no impairment losses recognized by the Company to date.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(l)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Investments</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Investments
are accounted for using the equity method if the investment provides the Company has the ability to exercise significant influence,
but not control, over an investee. Significant influence is generally deemed to exist if the Company has an ownership interest
in the voting stock of the investee between 20% and 50%, although other factors are considered in determining whether the
equity method is appropriate. Also, investments in limited partnerships of more than 3% to 5% are generally viewed as more
than minor and are accounted for using the equity method.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
investments for which the Company is not able to exercise significant influence over the investee and which do not have readily
determinable fair values were accounted for under the cost method prior to the adoption of ASU 2016-01 <I>Financial Instruments-Overall
(Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities</I>. Subsequent to the adoption of
this standard as of January 1, 2018, the Company has elected the measurement alternative to measure such investments at cost,
less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or
a similar investment of the same issuer.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(m)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Fair
                                         Value of Financial Instruments</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fair
value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. To increase the comparability of fair value measures, a three-tier fair value
hierarchy prioritizes the inputs used in measuring fair value. These tiers include Level&nbsp;1, defined as observable inputs
such as quoted prices in active markets; Level&nbsp;2, defined as inputs other than quoted prices in active markets that are either
directly or indirectly observable; and Level&nbsp;3, defined as unobservable inputs in which little or no market data exist, therefore,
requiring the Company to develop its own assumptions to determine the best estimate of fair value.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued and other liabilities approximate
fair value because of the short maturity of these instruments. The carrying amounts of long-term debt and line of credit at December
31, 2019 and 2018 approximates fair value because the interest rate approximates the current market interest rate. The fair value
of these financial instruments was determined using level 2 input.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(n)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Accumulated
                                         Other Comprehensive Income (Loss)</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Comprehensive
loss consists of net loss and adjustments to stockholders&rsquo; equity for foreign currency translation adjustments. Accumulated
other comprehensive loss consists entirely of foreign currency translation adjustments. The tax impact is not material to the
consolidated financial statements.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"></P>

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<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(o)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Revenue
                                         Recognition</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company adopted Accounting Standards Update No. 2014-09 <I>Revenue From Contracts with Customers (Topic 606)</I> as of January
1, 2018. Revenue recognition is evaluated through the following five step process:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.
Identification of the contract with a customer;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.
Identification of the performance obligations in the contract;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.
Determination of the transaction price;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.
Allocation of the transaction price to the performance obligations in the contract; and</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.
Recognition of revenue when or as a performance obligation is satisfied.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue
is recognized when control of a promised product or service transfers to a customer, in an amount that reflects the consideration
to which the Company expects to be entitled in exchange for transferring those products or services. Revenue is recognized net
of sales taxes and discounts. The Company primarily generates revenue through product sales on its platforms and through fees
earned for facilitating marketplace transactions and extended warranty sales on its platforms.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company recognizes revenue on product sales at a point in time to customers when control of the product passes to the customer
upon delivery to the customer or when service is provided. The Company fulfill orders with its owned inventory or with inventory
sourced through its suppliers. The vast majority of the Company&rsquo;s product sales are fulfilled from its owned inventory.
The amount recognized in revenue represents the expected consideration to be received in exchange for such goods or services.
For orders fulfilled with inventory sourced through the Company&rsquo;s suppliers, and where the products are shipped directly
by the Company&rsquo;s supplier to the Company&rsquo;s customer, the Company evaluates the criteria outlined in ASC 606-10-55,
<I>Principal versus Agent Considerations</I>, in determining whether revenue should be recognized on a gross or net basis. The
Company determined that it is the principal in these transactions as it controls the specific good before it is transferred to
the customer. The Company is the entity responsible for fulfilling the promise to provide the specified good to the customer and
takes responsibility for the acceptability of the goods, assumes inventory risk before the specified good has been transferred
to the customer or after transfer of control to the customer, has discretion in establishing the price, and selects the suppliers
of products sold. The Company accounts for product sales under these arrangements on a gross basis upon receipt of the product
by the customer. Product sales exceeded 95% of consolidated net sales in each of the years ended December 31, 2019, 2018 and 2017.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company generally requires payment by credit card upon placement of an order, and to a limited extent, grants credit to business
customers on 30- to 60-day terms. Shipping and handling is considered a fulfillment activity, as it takes place before the customer
obtains controls of the good. Amounts billed to customers for shipping and handling are included in net sales upon completion
of the performance obligation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s product sales contracts include terms that could cause variability in the transaction price such as sales returns
and credit card chargebacks. As such, the transaction price for product sales includes estimates of variable consideration to
the extent it is probable that a significant reversal of revenue recognized will not occur. Sales are reported net of estimated
returns and allowances and credit card chargebacks, based on historical experience.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company also earns fees for facilitating marketplace transactions and extended warranty sales on its platforms. For marketplace
transactions, the Company&rsquo;s websites host third-party sellers and the Company also provides the payment processing function.
The Company recognizes revenue upon sale of products made available through its marketplace store. The Company is not the principal
in this arrangement and does not control the specific goods sold to the customer. The Company reports the net amount earned as
commissions, which are determined using a fixed percentage of the sales price or fixed reimbursement amount. The Company also
offers extended warranty programs for various products on behalf of an unrelated third party. The Company reports the net amount
earned as revenue at the time of sale, as it is not the principal in this arrangement and does not control the specific goods
sold to the customer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company offers its customers the opportunity to purchase goods and services on its website using deferred financing promotional
programs provided by a third-party financing company. These programs include an option to make no payments for a period of six,
twelve, eighteen or twenty-four months. The third-party financing company makes all decisions to extend credit to the customer
under a separate agreement with the customer, owns all such receivables from the customer, assumes all risk of collection, and
has no recourse to the Company in the event the customer does not pay. The third-party financing company pays the Company for
the purchase price on behalf of the customer, less certain transaction fees. Accordingly, sales generated through these programs
are not reflected in the Company&rsquo;s receivables once payment is received from the third-party financing company. The transaction
fee paid by the Company to the third-party financing company is recognized as a reduction of revenue. These transaction fees for
the years ended December&nbsp;31, 2019, 2018 and 2017 were immaterial.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
the extent that the Company sells its products on third-party platforms, the Company incurs incremental contract acquisition costs
in the form of sales commissions paid to the platforms. The commissions are generally determined based on the sales price and
an agreed-upon commission rate. The Company elects the practical expedient under Accounting Standards Update No. 2014-09 <I>Revenue
From Contracts with Customers (Topic 606)</I> to recognize sales commission as an expense as incurred, as the amortization period
of the asset that the Company otherwise would have recognized is less than one year.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has three types of contractual liabilities: (1) amounts collected, or amounts invoiced and due, related to product sales
where receipt of the product by the customer has not yet occurred or revenue cannot be recognized. Such amounts are recorded in
the consolidated balance sheets as deferred revenue and are recognized when the applicable revenue recognition criteria have been
satisfied. For all of the product sales, the Company ships a large volume of packages through multiple carriers. Actual delivery
dates may not always be available and as such, the Company estimates delivery dates as needed based on historical data. (2) amounts
collected for the Company&rsquo;s Premier membership services, which are typically paid upfront for membership benefits over a
3-month, 6-month, or 12-month period, including free 3-day shipping, free return, rush processing and dedicated customers services.
Such amounts were initially recorded as deferred revenue and were recognized as revenue ratably over the subscription period.
The Company discontinued its Premier membership services in 2019, resulting in no balance of deferred revenue related to this
program as of December 31, 2019. The amount of deferred revenue related to the Premier membership services was immaterial as of
December 31, 2018. (3) unredeemed gift cards, which are initially recorded as deferred revenue and are recognized in the period
they are redeemed. Subject to governmental agencies escheat requirements, certain gift cards not expected to be redeemed, also
known as &ldquo;breakage&rdquo;, are recognized as revenue based on the historical redemption pattern. These gift cards breakage
revenue for the years ended December 31, 2019, 2018 and 2017 were immaterial.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deferred
revenue totaled $25.9 million and $37.1 million at December 31, 2019 and 2018, respectively. During the year ended December 31,
2019, the Company recognized $31.6 million of net revenue included in deferred revenue at December 31, 2018.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(p)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Cost
                                         of Sales</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s cost of sales represents the purchase price of the products it sells to its customers, offset by incentives earned
from vendors, including marketing development funds and other vendor incentive programs. See further discussion of vendor payments
under Incentives Earned from Vendors below. Cost of sales also includes freight-in and freight-out costs and charges related to
refurbished, slow-moving, or obsolete inventory.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(q)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Shipping
                                         and Handling</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company records revenue for shipping and handling billed to its customers. Shipping and handling revenue totaled approximately
$17.1 million, $21.9 million and $27.8&nbsp;million for the years ended December&nbsp;31, 2019, 2018 and 2017, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
related shipping and handling costs are included in cost of sales. Shipping and handling costs totaled approximately $62.1 million,
$67.6 million and $68.3&nbsp;million for the years ended December&nbsp;31, 2019, 2018 and 2017, respectively.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"></P>

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<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(r)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Incentives
                                         Earned from Vendors</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company participates in various vendor incentive programs that include, but are not limited to, purchasing-based volume discounts,
sales-based volume incentives, marketing development funds, including for certain cooperative advertising, and price protection
agreements. Vendor incentives are recognized in the consolidated statements of operations as an offset to marketing and promotional
expenses to the extent that they represent reimbursement of advertising costs incurred by the Company on behalf of the vendors
that are specific, incremental, and identifiable. Reimbursements that are in excess of such costs and all other vendor incentive
programs are accounted for as a reduction of cost of sales, or if the related product inventory is still on hand at the reporting
date, inventory is reduced in the consolidated balance sheets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company reduced cost of sales by $143.1 million, $181.7 million and $160.8&nbsp;million for the years ended December&nbsp;31,
2019, 2018 and 2017, respectively, for these vendor incentive programs. Reductions to advertising and promotional expenses related
to direct reimbursements for costs incurred in advertising vendors&rsquo; products totaled $0.7 million, $0.7 million and $0.6&nbsp;million
for the years ended December&nbsp;31, 2019, 2018 and 2017, respectively. Amounts receivable related to vendor incentive programs
were $34.8 million and $58.4 million, net of allowances of $0.5 million and $1.0 million, at December&nbsp;31, 2019 and 2018,
respectively. Amounts due to the Company are included in accounts receivable in the consolidated balance sheets.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(s)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Selling,
                                         General, and Administrative Expenses</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Selling,
general, and administrative expenses primarily consist of marketing and advertising expenses, sales commission, credit card processing
fees, payroll and related benefits, depreciation and amortization, professional fees, litigation costs, rent expense, information
technology expenses, warehouse costs, office expenses, and other general corporate costs.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(t)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Advertising</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Advertising
and promotional expenses are charged to operations when incurred and are included in selling, general, and administrative expenses.
Advertising and promotional expenses for the years ended December&nbsp;31, 2019, 2018 and 2017 were $25.8 million, $34.8 million
and $38.0&nbsp;million, respectively.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(u)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Stock-Based
                                         Compensation</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
measurement and recognition of compensation expense for all stock-based payment awards made to employees and directors, including
employee stock options and restricted stock, is based on estimated fair value of the awards on the date of grant. The value of
awards that are ultimately expected to vest is recognized as expense on a straight-line basis over the requisite service periods
in the consolidated statements of operations. See Note&nbsp;13 &ndash; Stock-Based Compensation for further information about
the Company&rsquo;s stock compensation plans.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(v)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Income
                                         Taxes</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is subject to federal and state income taxes in the United States and taxes in foreign jurisdictions. In accordance with
ASC Topic 740, the Company uses the asset and liability&nbsp;method of accounting for income taxes. Under the asset and liability
method, deferred taxes are determined based on the temporary differences between the financial statement and tax bases of assets
and liabilities, using tax rates expected to be in effect during the years in which the bases differences are expected to reverse.
A valuation allowance is established against deferred tax assets when it is more likely than not that some portion or all of the
deferred tax assets will not be realized.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will
be sustained upon examination by the taxing authorities based on the technical merits of the position. The Company measures the
recognized tax benefit as the largest amount of tax benefit that has greater than a 50% likelihood of being realized upon the
ultimate settlement with a taxing authority. The Company reverses a previously recognized tax benefit if it determines that the
tax position no longer meets the more-likely-than-not threshold of being sustained. The Company accrues interest and penalties
related to unrecognized tax benefits in income tax expense.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"></P>

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<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(w)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Concentration
                                         of Credit Risk and Significant Customers and Vendors</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company maintains its cash and cash equivalents in bank deposit accounts which, at times, may exceed federally insured limits.
The Company has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk
from cash and cash equivalents.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the years ended December&nbsp;31, 2019, 2018 and 2017, the Company had no individual customers that accounted for greater than
10% of net sales.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company purchases its products on credit terms from vendors located primarily in the United States. For the year ended December
31, 2019, the Company&rsquo;s cumulative annual purchases from two vendors exceeded 10% of total purchases. For the years ended
December 31, 2018 and 2017, the Company&rsquo;s cumulative annual purchases from one vendor exceeded 10% of total purchases. The
majority of products that the Company sells are available through multiple channels.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has receivables due from vendors related to its advertising and promotional programs and receivables due from business
customers with credit terms. As of December 31, 2019, the Company&rsquo;s receivables from one vendor exceeded 10% of net receivables,
and no receivables from business customers with credit terms exceeded 10% of net receivables. As of December&nbsp;31, 2018, no
vendor or business customers accounted for greater than 10% of net receivables.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(x)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Foreign
                                         Currency Translation</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
financial statements of foreign subsidiaries and affiliates where the local currency is the functional currency are translated
into U.S.&nbsp;dollars using exchange rates in effect at the balance sheet date for assets and liabilities and average exchange
rates during the year for revenues and expenses. Any gain or loss on currency translation is included in stockholders&rsquo; equity
as accumulated other comprehensive income.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(y)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Redeemable
                                         Convertible Preferred Stock and Convertible Preferred Stock</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
discussed more fully in Note&nbsp;12 &ndash; Redeemable Convertible Preferred Stock and Convertible Preferred Stock, the Company&rsquo;s
Single Vote Series&nbsp;B-1, Series&nbsp;B-1, and Series&nbsp;B-2 redeemable Convertible Preferred Stock was subject to redemption.
As the possible redemption of these shares was outside of the control of the Company, the carrying amounts of the Single Vote
Series&nbsp;B-1, Series&nbsp;B-1, and Series&nbsp;B-2 redeemable convertible Preferred Stock were classified as temporary equity.
The Single Vote Series&nbsp;B-1, Series&nbsp;B-1, and Series&nbsp;B-2 redeemable convertible Preferred Stock was initially recorded
at their original issuance amounts, net of direct third-party costs incurred in connection with issuance.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Single
Vote Series&nbsp;B-1, Series&nbsp;B-1, and Series&nbsp;B-2 redeemable convertible Preferred Stock were redeemable at two times
their original issue price. The Company accreted the carrying value of the redeemable convertible Preferred Stock to the respective
redemption amount on the effective interest method basis over the period from the original issuance date to the date eligible
for redemption.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the Company&rsquo;s current certificate of incorporation, Series A convertible Preferred Stock is convertible at the holder&rsquo;s
option into Class A Common Stock by dividing the Series A Original Issue Price by the Series A Conversion Price in effect at the
time of conversion.&nbsp; Similar, each share of Series AA convertible Preferred Stock is convertible at the holder&rsquo;s option
into to Class A Common Stock by dividing the sum of the Series AA Original Issue Price plus any dividends declared but unpaid
thereon by the Series AA Conversion Price in effect at the time of conversion. Further, upon the date of an IPO, all outstanding
shares of Series A convertible Preferred Stock and Series AA convertible Preferred Stock shall automatically be converted into
shares of Class B Common Stock at the then-effective conversion rate. Finally, upon a date (prior to the date of an IPO) specified
by vote or written consent of at least a majority of the then outstanding shares of Series A convertible Preferred Stock, all
outstanding shares of Series A convertible Preferred Stock shall automatically be converted into shares of Class A Common Stock
at the then effective conversation rate. &nbsp;Upon a date (prior to the date of an IPO) specified by vote or written consent
of at least a majority of the then outstanding shares of Series AA convertible Preferred Stock, all outstanding shares of Series
AA convertible Preferred Stock shall automatically be converted into shares of Class A Common Stock at the then effective conversation
rate. The Company&rsquo;s current certificate of incorporation also allows the Series A convertible Preferred Stock and Series
AA convertible Preferred Stock to be redeemed upon certain defined deemed liquidation events.&nbsp; As the possible redemption
of these shares was outside of the control of the Company, the carrying amount of the Series A and AA convertible preferred stocks
were classified as temporary equity. The transactions and the carrying amount of the Series A and
AA convertible preferred stocks were reclassified to temporary equity retrospectively for years 2018 and 2017 to conform with year
2019 presentation. The Series A and Series AA convertible Preferred Stocks were initially recorded at their
original issuance amounts, net of direct third-party costs incurred in connection with issuance.&nbsp;</FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(3)</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fair
                                         Value</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s financial assets and liabilities that are measured at fair value on a recurring basis include cash and cash equivalents,
and restricted cash. The carrying amounts of cash and cash equivalents and restricted cash approximate their fair value.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s financial assets that are measured at fair value on a non-recurring basis when impairment is identified include
equity method investment and investment in equity securities without readily determinable fair value not accounted for under the
equity method. The fair values of these investments are determined based on valuation techniques using the best information available,
and may include quoted market prices, market comparables, and discounted cash flow projections. An impairment charge is recorded
when the cost of the investment exceeds its fair value. This is considered a Level 3 fair value measurement. See Note 5 &ndash;
Investment for further information regarding the fair value measurement of these investments.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
fair value of accounts receivables approximates carrying value due to the short-term maturities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s loans to affiliate, loans from affiliate, line of credit and long-term debt are carried at cost with fair value
disclosed, if required. The fair value of the amounts outstanding under the line of credit and long-term debt with a floating
interest rate approximates the carrying value due primarily to the variable nature of the interest rate of the instruments, which
is considered a Level&nbsp;2 fair value measurement. The fair value of the amounts outstanding under loans to affiliate, loans
from affiliate, and line of credit with a fixed interest rate is estimated based on the discounted amount of the contractual future
cash flows using an appropriate discount rate. This is considered a Level&nbsp;3 fair value measurement. The following is a summary
of the carrying amounts and estimated fair values of these financial instruments as of December 31, 2019 and 2018 (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31, 2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Carrying Value</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Estimated Fair Value</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Carrying Value</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Estimated Fair Value</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; text-align: left">Loans to affiliate</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">15,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">15,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Line of credit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">6,379</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,379</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">42,867</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">42,867</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Long-term debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2,481</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,424</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">15,439</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">15,571</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(4)</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Property
                                         and Equipment, Net</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property
and equipment, net consisted of the following (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%">Land &nbsp; &nbsp; &nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">2,179</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">6,203</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Buildings &nbsp; &nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32,455</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,758</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Machinery and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,477</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,365</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Computer and software</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32,538</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32,181</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Leasehold improvements</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,560</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,198</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Capitalized software</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,650</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,554</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Furniture and fixtures</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,196</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,734</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Construction in progress</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6,706</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,315</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">142,761</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">148,308</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Accumulated depreciation and amortization</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(95,631</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(90,866</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property and equipment, net</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">47,130</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">57,442</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; margin: 0pt 0 0pt 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Depreciation
and amortization expense associated with property and equipment was $10.7 million, $10.2 million and $10.6&nbsp;million for the
years ended December&nbsp;31, 2019, 2018 and 2017, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; margin: 0pt 0 0pt 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
2019, the Company entered into a sale leaseback transaction for one of its real estate properties in the United States. The Company
sold the property for gross proceeds of $38.5 million, and recognized a gain of $28.8 million from the transaction, which is included
as other operating income in its consolidated statements of operations. The Company concurrently leased back the property from
the buyer under a lease agreement for ten years, resulting in ROU lease asset of $14.1 million and a lease liability of $13.9
million as of the lease commencement date.&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(5)</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Investment</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; margin: 0pt 0 0pt 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 17, 2018, the Company acquired an equity interest in Mountain Capital Fund L.P. (&ldquo;Mountain&rdquo;) from Pegasus View
Global Ltd., an international business company incorporated in the Republic of Seychelles (&ldquo;Pegasus&rdquo;), which is a
related party. Mountain is an exempted limited partnership registered under the partnership law in the Cayman Islands and primarily
engages in investing. The Company&rsquo;s equity interest in Mountain was limited to 50% of Mountain&rsquo;s investment in One97
Communications Limited and PayTM E-Commerce Private Limited (collectively, the &ldquo;Mountain Investment&rdquo;). In addition
to the $43.0 million initial investment made during 2018, the purchase price in this transaction included a contingent consideration
of up to $7.0 million upon satisfaction of certain conditions described in the purchase agreement. The Company evaluated the Mountain
Investment under the variable interest model and the voting interest model and concluded that Mountain Capital Fund L.P. is not
a variable interest entity and no consolidation is needed under either the variable interest model or the voting interest model.
The Company recorded an estimate of contingent consideration payable of $7.0 million as of the acquisition date. The Company accounted
for the Mountain Investment under the equity method, and recognized a gain on this equity method investment of $9.6 million for
the year ended December 31, 2018. As of December 31, 2018, the carrying value of the Mountain Investment was $59.6 million. The
Company&rsquo;s ownership percentage in Mountain was approximately 48% as of December 31, 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; margin: 0pt 0 0pt 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2019, Mountain sold a portion of its investment in One97 Communications Limited (&ldquo;One97&rdquo;)
to various third-party buyers, which resulted in the Company&rsquo;s disposal of all of its investment in One97. The Company recorded
a gain on the equity method investment in Mountain of $21.8 million for the year ended December 31, 2019 and continues to account
for its remaining interest in Mountain under the equity method. As of December 31, 2019, the carrying value of the Company&rsquo;s
investment in Mountain was $6.5 million, and the Company&rsquo;s ownership percentage in Mountain was approximately 8.0%. As Mountain
is a limited partnership, the Company continues accounting for the Mountain Investment under the equity method as of December
31, 2019 and for the year then ended.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; margin: 0pt 0 0pt 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; margin: 0pt 0 0pt 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">See
Note 18 &ndash; Related Party Transactions for further information regarding this transaction.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; margin: 0pt 0 0pt 0.3in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; margin: 0pt 0 0pt 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
August 2018, the Company purchased 11,506,695 Series B+ Preferred shares in Bitmain Technologies Holding Company, a privately-held
company incorporated in the Cayman Islands, for a total consideration of $15.0 million. Bitmain Technologies Holding Company and
its subsidiaries (together &ldquo;Bitmain&rdquo;) primarily design and sell cryptocurrency mining hardware, operate cryptocurrency
mining pools, and provide mining farm services. As this represents an investment in equity securities without readily determinable
fair values, the Company elected the measurement alternative under ASU 2016-01 to measure this investment at cost, less any impairment,
plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment
of the same issuer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; margin: 0pt 0 0pt 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company reviewed the investment in Bitmain for impairment as of December 31, 2019 and 2018, respectively, by evaluating if events
or circumstances have occurred that may have a significant adverse effect on the fair value of the investment. The Company concluded
there were no impairment indicators as of December 31, 2019 and 2018. In the absence of observable price changes in orderly transactions
for the identical or a similar investment of the same issuer during the years ended December 31, 2019 and 2018, the carrying value
of the investment remained at $15.0 million as of December 31, 2019 and 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
was no impairment loss on cost method investment for the years ended December 31, 2019, 2018 and 2017.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(6)</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Accrued
                                         Liabilities</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accrued
liabilities consisted of the following (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Accrued personnel</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">20,534</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">13,391</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Allowance for sales returns</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,812</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,773</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Accrued advertising expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,051</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,916</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Sales and other taxes payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,974</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,294</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Accrued legal expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,396</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,532</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accrued freight expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,563</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">723</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Accrued investment costs</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accrued medical expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,298</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">596</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">Other &nbsp; &nbsp; &nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6,768</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">7,724</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total accrued liabilities</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">49,396</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">44,949</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(7)</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Line
                                         of Credit</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
July&nbsp;2018, the Company entered into a credit agreement with several financial institutions that provided a revolving credit
facility of up to $100.0&nbsp;million with a maturity date of July&nbsp;27, 2021. Prior to July 27, 2020 and subject to certain
terms and conditions, the Maximum Revolving Advance Amount, as defined in the loan agreement, could be increased up to $140.0
million. The revolving credit facility includes a letter of credit sublimit of $25.0&nbsp;million, which can be used to issue
standby and trade letters of credit, and a $10.0&nbsp;million sublimit for swingline loans. Advances from this line of credit
will be subject to interest at LIBOR plus the Applicable Margin, as defined in the loan agreement, or the Alternate Base Rate
(to be defined as the highest of the financial institution&rsquo;s prime rate, the Overnight Bank Funding Rate plus 0.50%, or
the daily LIBOR plus 1.0%) plus the Applicable Margin. For LIBOR loans, the Company may select interest periods of one, two, or
three months. Interest on LIBOR loans shall be payable at the end of the selected interest period. Interest on Alternate Base
Rate loans is payable monthly. The line of credit is guaranteed by certain of the Company&rsquo;s U.S.&nbsp;subsidiaries and is
collateralized by certain of the assets of the Company. Such assets include all Receivables, equipment and fixtures, general intangibles,
Inventory, Subsidiary Stock, securities, investment property, and financial assets, contract rights, and ledger sheets, as defined
in the loan agreement. To maintain availability of funds under the loan agreement, the Company will pay on a quarterly basis,
an unused commitment fee of either 0.25% of the difference between the amount available and the amount outstanding under the facility
if the difference is less than one-third of the Maximum Revolving Advance Amount or 0.40% of the difference between the amount
available and the amount outstanding under the facility if the difference is equal to or greater than one-third of the Maximum
Revolving Advance Amount. As of December&nbsp;31, 2019, there was no balance outstanding under this line of credit. The credit
facility contains customary covenants, including covenants that limit or restrict the Company&rsquo;s ability to incur capital
expenditures and lease payments, make certain investments, enter into certain related-party transactions, and pay dividends. The
credit facility also requires the Company to maintain certain minimum financial ratios and maintain operation banking relationship
with the financial institutions. As of December&nbsp;31, 2019, the Company was in compliance with all financial covenants related
to the line of credit.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
March 2018, the Company entered into a credit agreement with a financial institution that provided for a revolving credit facility
of up to $7.0 million with a maturity date no later than July 31, 2018. For each calendar quarter during the term of this credit
agreement, advances from this line of credit were subject to an interest rate of either the Wall Street Journal Prime Rate or
LIBOR-Based Rate, as defined in the loan agreement, at the Company&rsquo;s option. The LIBOR-Based Rate may be calculated as either
LIBOR plus 2.75% if the Compensating Deposits, as defined in the credit agreement, were less than $15.0 million as a daily average
for the previous calendar quarter or LIBOR plus 2.5% if the Compensating Deposits equaled at least $15.0 million as a daily average
for the previous calendar quarter. The line of credit was collateralized by a real estate asset of the Company, and contained
customary covenants, including covenants that limit or restrict the Company&rsquo;s ability to incur indebtedness, capital expenditures
and lease payments, make certain investments and enter into certain related-party transactions. Additionally, there was a requirement
to maintain minimum liquidity (to be defined as cash or cash equivalents and securities that are readily marketable and are not
subject to any lien, claim, encumbrance, charge or any other restriction) of $35.0 million during the term of this credit agreement,
and to maintain a deposit account with the financial institution with a minimum balance of $5.0 million at all times during the
term of this credit agreement. The Company was in compliance with all financial covenants during the term of this credit agreement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: left; text-indent: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
July&nbsp;2013, the Company entered into a credit agreement with several financial institutions that provided a revolving credit
facility of up to $100.0&nbsp;million with a maturity date of July&nbsp;31, 2018. The revolving credit facility included a letter
of credit sublimit of $25.0&nbsp;million, which could be used to issue standby and trade letters of credit, and a $10.0&nbsp;million
sublimit for swingline loans. Advances from this line of credit were subject to interest at LIBOR plus the Applicable Margin,
as defined in the loan agreement, or the Alternate Base Rate (to be defined as the higher of the financial institution&rsquo;s
prime rate, the Federal Funds Open Rate plus 0.50%, or the daily LIBOR plus 1.0%) plus the Applicable Margin. For LIBOR loans,
the Company may select interest periods of one, two, or three months. Interest on LIBOR loans was to be payable at the end of
the selected interest period. Interest on Alternate Base Rate loans was to be payable monthly. The line of credit was guaranteed
by the Company&rsquo;s U.S.&nbsp;subsidiaries and was collateralized by certain of the assets of the Company, as defined in the
loan agreement. To maintain availability of funds under the loan agreement, the Company paid on a quarterly basis, an unused commitment
fee of either 0.20% of the difference between the amount available and the amount outstanding under the facility if the difference
exceeded $20&nbsp;million or 0.35% of the difference between the amount available and the amount outstanding under the facility
if the difference was $20&nbsp;million or less. The credit facility contained customary covenants, including covenants that limit
or restrict the Company&rsquo;s ability to incur capital expenditures and lease payments, make certain investments and pay dividends.
The credit facility also required the Company to maintain certain minimum financial ratios and maintain operation banking relationship
with the financial institutions. The Company terminated this credit agreement with the financial institutions during 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
July&nbsp;2015, the Company entered into a credit agreement with a financial institution that provided for a revolving credit
facility of up to $5.0&nbsp;million with a maturity date of no later than August&nbsp;26, 2016. The Company extended the maturity
date of this credit agreement to October 24, 2020. Advances from this line of credit are subject to interest at a floating interest
rate of the one-year savings account plus 0.63% not to be lower than 1.62% per annum. The interest rate was equivalent to 1.72%
as of December&nbsp;31, 2019. The line of credit is guaranteed by one of the Company&rsquo;s China subsidiaries and is collateralized
by a real estate asset of that subsidiary. As of both December&nbsp;31, 2019 and 2018, there was $4.9 million outstanding under
this line of credit.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
December&nbsp;2016, the Company entered into a credit agreement with a financial institution that provided for a revolving credit
facility of $3.8&nbsp;million. Advances from this line of credit were subject to interest at a floating interest rate of the one&nbsp;year
savings account. The line of credit was guaranteed by one of the Company&rsquo;s China subsidiaries and was collateralized by
the foreign bank deposit assets of the same subsidiary. This credit agreement expired in 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
May 2018, the Company entered into a credit agreement with a financial institution that provided for a revolving credit facility
of up to $3.6 million with a maturity date of May 14, 2019 (the &ldquo;3.6 Million LOC&rdquo;). Advances from this line of credit
are subject to a fixed interest rate of 5.22% per annum. The line of credit is guaranteed by one of the Company&rsquo;s China
subsidiaries and is collateralized by the foreign bank deposit assets of the same subsidiary. As of December 31, 2018, there was
$3.0 million outstanding under this line of credit. This credit agreement expired in 2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
March 2019, the Company entered into a credit agreement with a financial institution that provided for a revolving credit facility
of $3.6 million with a maturity date of September 19, 2019. Advances from this line of credit were subject to interest at a floating
interest rate of the Loan Prime Rate, as defined in the credit agreement, times 142%. This credit facility is collateralized by
all of the assets of one of the Company&rsquo;s subsidiaries in China. This credit agreement expired during 2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
December 2019, the Company entered into a credit agreement with a financial institution that provided for a revolving credit facility
of $1.4 million. Advances from this line of credit were subject to a fixed interest rate of 6.09% per annum. The line of credit
is collateralized by a real estate asset of that subsidiary. As of December&nbsp;31, 2019, there was $1.4 million outstanding
under this line of credit.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(8)</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Long-Term
                                         Debt</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has entered into various loans with financial institutions. Long-term debt consisted of the following (in thousands):</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Credit Facility</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">13,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Term Loan &nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,481</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,687</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Less unamortized debt issuance costs</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(15</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,481</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,672</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Less current portion</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(258</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(248</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term debt less current portion</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,223</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">15,424</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;<FONT STYLE="font-weight: normal">&nbsp;</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; margin: 0pt 0 0pt 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal"><U>Credit
Facility</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
March 2018, the Company entered into a long-term revolving loan agreement with a financial institution that provided a revolving
credit facility of up to $13.0 million with a maturity date of March 8, 2020 (the &ldquo;Credit Facility&rdquo;). For each calendar
quarter during the term of this credit agreement, advances from the Credit Facility are subject to an interest rate of either
the Wall Street Journal Prime Rate or LIBOR-Based Rate, as defined in the loan agreement, at the Company&rsquo;s option. The LIBOR-Based
Rate may be calculated as either LIBOR plus 2.75% if the Compensating Deposits, as defined in the credit agreement, are less than
$15.0 million as a daily average for the previous calendar quarter or LIBOR plus 2.5% if the Compensating Deposits equal at least
$15.0 million as a daily average for the previous calendar quarter. The Credit Facility was collateralized by a real estate asset
of the Company, and contained customary covenants, including covenants that limit or restrict the Company&rsquo;s ability to incur
indebtedness, capital expenditures and lease payments, make certain investments and enter into certain related-party transactions.
Additionally, there was a requirement to maintain minimum liquidity (to be defined as cash or cash equivalents and securities
that are readily marketable and are not subject to any lien, claim, encumbrance, charge or any other restriction) of $35.0 million
during the term of the Credit Facility. The Company paid off the loan in full during 2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; margin: 0pt 0 0pt 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Term
Loan</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2013, the Company entered into a term loan agreement with a financial institution for $4.1 million with a maturity date of November
26, 2028 (the &ldquo;<B>Term Loan</B>&rdquo;). The Term Loan bears a floating interest rate of the one-year savings account plus
0.43% per annum in the first two years and a floating interest rate of the one-year savings account plus 0.61% per annum for the
remaining of the term, not to be lower than 1.8% during the entire term. The interest rate was equivalent to 1.8% as of December&nbsp;31,
2019. The Term Loan is collateralized by a first position security interest in a floor of an office building owned by the Company
in Taiwan.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Aggregate
maturities of long-term debt, excluding unamortized debt issuance costs, were as follows (in thousands) as of December 31, 2019:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%; text-align: left">2020</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">258</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">2021</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">267</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">2022</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">272</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">2023</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">277</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">2024</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">282</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Thereafter</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,125</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,481</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-indent: 0.25in"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(9)</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Lease
                                         Obligations</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Operating
Leases</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company leases certain office and warehouse facilities and warehouse equipment under various noncancelable operating leases. The
Company is also committed under the terms of certain of these operating lease agreements to pay property taxes, insurance, utilities,
and maintenance costs. See Note 4 &ndash; Property and Equipment, net for disclosure for sales and leaseback transaction.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Most
of the Company&rsquo;s leases do not provide an implicit rate that can be readily determined. Therefore, the Company uses a discount
rate based on its incremental borrowing rate, which is determined using its credit rating and information available as of the
commencement date. The Company&rsquo;s operating lease agreements may include options to extend the lease term. The Company made
an accounting policy election to exclude options that are not reasonably certain of exercise when determining the term of the
borrowing in the assessment of the incremental borrowing rate. Additionally, the Company also made an accounting policy election
to not separate lease and non-lease components of a contract, and to recognize the lease payments under short-term leases as an
expense on a straight-line basis over the lease term without recognizing the lease liability and the ROU lease asset.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluates whether its contractual arrangements contain leases at the inception of such arrangements. Specially, the Company
considers whether it can control the underlying asset and have the right to obtain substantially all of the economic benefits
or outputs from the assets. Substantially all of its leases are long-term operating leases with fixed payment terms. The Company
does not have significant financing leases. Its ROU operating lease assets represent the right to use an underlying asset for
the lease term, and its operating lease liabilities represent the obligation to make lease payments. ROU operating lease assets
are recorded in other noncurrent assets in the consolidated balance sheet. Operating lease liabilities are recorded in other current
liabilities or other noncurrent liabilities in the consolidated balance sheets based on their contractual due dates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; margin: 0pt 0 0pt 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s operating lease liability is recognized as of the lease commencement date at the present value of the lease payments
over the lease term. The Company&rsquo;s ROU operating lease asset is recognized as of the lease commencement date at the amount
of the corresponding lease liability, adjusted for prepaid lease payments, lease incentives received, and initial direct costs
incurred. The Company evaluates its ROU lease assets for impairment consistent with its impairment of long-lived assets policy.
See Note 2&mdash;Summary of Significant Accounting Policies.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operating
lease expense is recognized on a straight-line basis over the lease term, and is included in selling, general, and administrative
expenses in the consolidated statement of operations. Operating lease expense totaled $13.0 million, $13.2 million and $14.1&nbsp;million,
respectively, for the years ended December&nbsp;31, 2019, 2018 and 2017. Cash payments made for operating leases totaled $12.1
million during 2019, which were included in cash flows from operating activities in the consolidated statement of cash flows.
As of December 31, 2019, the Company&rsquo;s ROU operating lease assets were $38.1 million, and its operating lease liabilities
were $39.2 million, of which $30.6 million was classified as non-current. New ROU operating lease assets and liabilities entered
into during 2019 were $21.3 million and $20.9 million, respectively. The Company&rsquo;s weighted average remaining lease term
and the discount rate for its operating leases were approximately 6.06 years and 5.06% at December 31, 2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has certain sublease arrangements for some of the leased office and warehouse facilities. Sublease rental income for the
years ended December&nbsp;31, 2019, 2018 and 2017 was immaterial.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table summarizes the future minimum rental payments under noncancelable operating lease arrangements in effect at December&nbsp;31,
2019 (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-indent: 0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%; text-align: left">2020</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">10,766</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">2021</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,822</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">2022</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,529</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">2023</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,964</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">2024</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,030</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Thereafter</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">10,095</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Total minimum payments</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">46,206</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Less: Imputed interest</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">7,018</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Present value of lease liabilities</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">39,188</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(10)</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Income
                                         Taxes</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
components of the Company&rsquo;s income tax provision expense are as follows (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year ended December 31</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Current provision:</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; width: 64%">Federal</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">21</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">21</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">38</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">State and local</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">152</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">217</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">98</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; padding-bottom: 1.5pt">Foreign</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,423</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">171</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">825</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,596</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">409</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">961</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Deferred expense/(benefit):</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">State and local</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(141</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">687</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(16</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; padding-bottom: 1.5pt">Foreign</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(866</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">486</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(698</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,007</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,173</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(714</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.375in; text-align: left; padding-bottom: 4pt">Provision for income taxes</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">4,589</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,582</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">247</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Loss
before provision for income taxes consisted of the following (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year ended December 31</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left">United States</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(11,288</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(37,891</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(20,547</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt">International</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,114</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,870</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">8,827</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; padding-bottom: 4pt">Total</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(12,402</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(32,021</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(11,720</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deferred
income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. The Company&rsquo;s deferred income tax assets and liabilities
consisted of the following (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>Deferred tax assets:</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; width: 76%; text-align: left">Accounts receivable</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">685</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">849</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in">Inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,060</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,561</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">Reserves and other accruals</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,401</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,910</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">Lease liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,313</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">Credits and other</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,954</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,732</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">Long term investment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,036</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Net operating losses</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">15,892</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">18,611</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.375in; text-align: left">Gross deferred tax assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">36,341</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,663</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Valuation allowance</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(25,119</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(22,806</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt">Total deferred tax assets, net</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">11,222</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,857</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Deferred tax liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">Prepaid expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(425</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(373</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in">ROU</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,073</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">Property and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,683</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,282</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Long term investment</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">0</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(2,168</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.375in; text-align: left; padding-bottom: 1.5pt">Total deferred tax liabilities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(10,181</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,823</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.375in; text-align: left; padding-bottom: 4pt">Net deferred tax assets</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,041</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">34</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
accordance with ASC 740, <I>Income Taxes</I>, the Company evaluates whether a valuation allowance should be established against
the net deferred tax assets based upon the consideration of all available evidence and using a &ldquo;more-likely than-not&rdquo;
standard. Significant weight is given to evidence that can be objectively verified. The determination to record a valuation allowance
is based on the recent history of cumulative losses and losses expected in the near future.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s U.S.&nbsp;federal consolidated filing group includes certain international entities. Based upon results of operations
for the years ended December&nbsp;31, 2019 and 2018, and estimated future trends in the Company&rsquo;s business, it is determined
that it is more likely than not that the Company will not realize any benefit from the U.S.&nbsp;federal net deferred tax assets.
As a result of the analysis, the Company recorded a $19.5&nbsp;million valuation allowance against the U. S. federal net deferred
tax assets as of December&nbsp;31, 2019. The Company also maintains valuation allowances against certain non-US loss corporations.
Total valuation allowance against U.S and non-US deferred tax asset were $25.1 million as of December 31, 2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
December&nbsp;31, 2019, the Company had $40.7&nbsp;million of federal net operating loss (&ldquo;NOL&rdquo;) carryforwards and
$17.6&nbsp;million of apportioned state NOL carryforwards available to reduce future taxable income. The federal NOLs that were
generated prior to January 1, 2018 will expire starting in 2031 and the federal NOLs that were generated in 2018 or forward will
carryforward indefinite to offset 80% of future taxable income. The state NOL carryforwards began to expire in 2029. The Company
has $7.3 million of NOL carryforwards in China as of December 31, 2019. The Company has $10.6 million of NOL carryforwards in
Taiwan, which will begin to expire in 2024. The Company has $2.2&nbsp;million NOLs in Hong Kong with indefinite carryforward.
A valuation allowance was recorded on the NOLs in China, Taiwan, and Hong Kong. The Company has not provided for deferred income
taxes on a cumulative total of $40.8&nbsp;million of undistributed earnings of its foreign subsidiaries, as these amounts are
considered indefinitely reinvested outside the United States. It is not practicable to determine the estimated income tax liability
that might apply if these earnings were to be repatriated.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Tax Cuts and Jobs Act (the &ldquo;Act&rdquo;) was enacted in December 2017. The Act reduced the U.S. federal corporate tax rate
from 34 percent to 21 percent, required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries
that were previously tax deferred, and created new taxes on certain foreign earnings. As of December 31, 2019, the Company has
completed its accounting for the tax effects of enactment of the Act.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: left; text-indent: 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
reconciliation of the U.S.&nbsp;federal statutory tax rate to the Company&rsquo;s effective tax rate is as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year ended December 31</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left">Federal taxes at statutory rate</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">21.00</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">21.00</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">34.00</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">State taxes, net of federal benefit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.02</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2.23</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.46</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Permanent items:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">Other nondeductible items</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.18</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.24</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.15</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">Subpart F income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.24</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.68</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2.87</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">SEC. 956 Income inclusion</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2.05</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">Stock-based compensation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.16</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7.65</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">Foreign withholding tax</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(32.12</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Foreign rate differential and foreign tax credits</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.77</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1.05</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15.60</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Change in valuation allowance</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13.60</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(17.94</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2.40</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Federal tax reform rate differential</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(34.96</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Prior year adjustments and other</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(13.22</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3.96</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1.47</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.375in; text-align: left; padding-bottom: 4pt">Effective tax rate</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(35.61</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)%</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(4.94</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)%</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(2.11</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
significant item that caused the effective tax rate change related to the change of valuation allowance and foreign withholding
tax. In addition, the Company has material permanent differences, including Subpart F income and stock based compensation. In
2017, the Company remeasured its federal deferred tax balances by the new tax rate of 21%, which generated the impact on effective
tax rate by 35.0% and fully offset by the change of valuation allowance. This event had no impact in 2019 or 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Uncertain
tax Positions</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the end of fiscal year 2019, the total liability for income tax associated with unrecognized tax benefits was $0.6 million.
Our effective tax rate will be affected by any portion of this liability we may recognize. We do not believe it is reasonably
possible that any of the uncertain tax benefits will be recognized in the next 12 months. As such, all uncertain tax positions,
including accrued interest, have been classified as long-term taxes payable on the consolidated balance sheets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
reconciliation of the beginning and ending amounts of uncertain tax positions is as follows (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year ended December 31</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Beginning balance</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">586</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">586</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">Additions based on tax positions related to the prior year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Reductions for tax positions of prior years</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">Ending balance</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">586</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">586</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
continuing practice is to recognize interest and penalties related to unrecognized tax benefits as tax expense. As of December
31, 2019 and 2018, interest and penalties related to uncertain tax positions were not material.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company files a consolidated federal income tax return in the United States, as well as combined and separate U.S.&nbsp;state
income tax returns. Certain subsidiaries of the Company are subject to income tax in China, Taiwan, Hong Kong, and Canada. The
Company is still subject to examination for federal income tax returns for the years 2012 through 2018, for certain U.S.&nbsp;state
income tax returns for the years&nbsp;2008 through 2018, and for certain foreign income tax returns for the years 2010 through
2018. The Company is currently under examination by the Internal Revenue Service for the&nbsp;years 2012 through 2014 and by the
California Franchise Tax Board for the years 2012 through 2014. The California Franchise Tax Board examination is related to amended
tax returns filed for the years under exam. No additional reserve was accrued in 2019 based on the current audit status.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt">&nbsp;</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(11)</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Common
                                         Stock</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s Common Stock consists of Class&nbsp;A and Class&nbsp;B Common Stock (collectively, &ldquo;Common Stock&rdquo;).
The holders of outstanding shares of Common Stock vote as one class on all matters submitted to a vote of the stockholders of
the Company. Each holder of shares of Class&nbsp;A Common Stock is entitled to one vote per share, whereas each holder of shares
of Class&nbsp;B Common Stock is entitled to 10 votes per share. No shares of Class&nbsp;B Common Stock are issuable until the
Company completes an underwritten public offering of its Class&nbsp;A Common Stock pursuant to an effective registration statement
under the Securities Act of 1933, as amended, in which the Class&nbsp;A Common Stock is designated for trading on the New York
Stock Exchange or the NASDAQ Global Market (an &ldquo;IPO&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
holders of Common Stock are entitled to share equally, on a per share basis, in any dividends or other distributions declared
by the Board of Directors with respect to the Common Stock. Each share of Class&nbsp;B Common Stock is convertible into one share
of Class&nbsp;A Common Stock at the option of the holder. Each share of Class&nbsp;B Common Stock will automatically convert into
one share of Class&nbsp;A Common Stock upon the written consent of a majority of the Class&nbsp;B stockholders, subject to the
consent of one of the Company&rsquo;s significant shareholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">No
Common Stock dividend was declared by the Company&rsquo;s Board of Directors for the years ended December 31, 2019, 2018 and 2017.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(12)</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Redeemable
                                         Convertible Preferred Stock and Convertible Preferred Stock</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to March 30, 2017, the Company&rsquo;s redeemable convertible Preferred Stock consisted of Single Vote Series&nbsp;B-1, Series&nbsp;B-1,
and Series&nbsp;B-2 (collectively, &ldquo;Series&nbsp;B&rdquo;) redeemable convertible Preferred Stock. All issued and outstanding
Series B redeemable convertible Preferred Stock were redeemed prior to January 1, 2017. The remaining installment payments to
the holders of Series B-1 redeemable convertible Preferred Stock of $2.6 million was paid out by March 30, 2017.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s convertible Preferred Stock currently consists of Series&nbsp;AA convertible Preferred Stock and Series A convertible
Preferred Stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following tables include the activity of the convertible Preferred Stock:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Repurchased</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Outstanding</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">as of</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">as of</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">December&nbsp;31,</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">December&nbsp;31,</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Authorized</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Issued</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; text-align: left">Series A convertible preferred stock</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">59,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">47,402,573</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(10,926,589</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">36,475,984</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Series AA convertible preferred stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,889,968</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,870,027</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,870,027</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Repurchased</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Outstanding</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">as of</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">as of</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">December&nbsp;31,</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">December&nbsp;31,</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Authorized</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Issued</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%; text-align: left">Series A convertible preferred stock</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">59,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">47,402,573</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(10,926,589</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">36,475,984</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Series AA convertible preferred stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,889,968</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,870,027</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,870,027</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
holders have various rights and preferences as follows.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(a)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Dividends</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to March 30, 2017, Series&nbsp;B redeemable convertible Preferred Stock was entitled to noncumulative dividends in an amount at
least equal to $0.49 per share before any dividends may be paid on the Common Stock or Series&nbsp;A convertible Preferred Stock.
The Series AA convertible Preferred Stock and Series&nbsp;A convertible Preferred Stock are entitled to noncumulative dividends
of at least $0.0016 per share before any dividends may be paid on Common Stock. In addition to the dividend preferences discussed
above, the holders of the Series AA convertible Preferred Stock and Series&nbsp;A convertible Preferred Stock are entitled to
share in any dividends paid to holders of the Common Stock on an equal basis as if the Series AA convertible Preferred Stock and
the Series&nbsp;A convertible Preferred Stock had been converted to Common Stock. Such dividends are payable when and as declared
by the Company&rsquo;s Board of Directors. No Series AA convertible Preferred Stock or Series&nbsp;A convertible Preferred Stock
dividends were declared by the Company&rsquo;s Board of Directors for the years ended December&nbsp;31, 2019, 2018 and 2017.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(b)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Voting</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
holders of the Series AA convertible Preferred Stock and Series&nbsp;A convertible Preferred Stock are entitled to vote on all
matters presented to the stockholders of the Company for their action or consideration. The holders of the Series AA convertible
Preferred Stock and Series&nbsp;A convertible Preferred Stock are entitled to 10 votes per &ldquo;as converted&rdquo; share of
Class&nbsp;A Common Stock.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(c)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Optional
                                         Conversion</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
share of Series AA convertible Preferred Stock and Series&nbsp;A convertible Preferred Stock is convertible at the option of the
holder at any time into Class&nbsp;A Common Stock. The conversion ratio is subject to adjustment for certain dilutive events,
including certain types of stock dividends, stock splits, stock issuances, stock option grants, or a combination of these. As
of both December 31, 2019 and 2018, approximately 24.9 million shares of Class A Common Stock could be issued based upon conversion
ratios of 1:1 upon optional conversion of all outstanding shares of Series AA convertible Preferred Stock. As of both December&nbsp;31,
2019 and 2018, approximately 36.5 million shares of Class&nbsp;A Common Stock could be issued, respectively, based upon conversion
ratios of 1:1 upon optional conversion of all outstanding shares of Series&nbsp;A convertible Preferred Stock. There are no shares
of Single Vote Series&nbsp;B-1 and Series&nbsp;B-1 redeemable convertible Preferred Stock authorized or outstanding as of December
31, 2019 and 2018.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
share of Series&nbsp;B-2 redeemable convertible Preferred Stock was convertible into either Series&nbsp;A convertible Preferred
Stock, Class&nbsp;B Common Stock, or Class&nbsp;A Common Stock, depending upon when the holder would have elected conversion.
There are no shares of Series&nbsp;B-2 redeemable convertible Preferred Stock authorized or outstanding as of December&nbsp;31,
2019 and 2018, as all shares of Series&nbsp;B-2 redeemable convertible Preferred Stock were redeemed by March 30, 2017.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(d)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Mandatory
                                         Conversion</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
share of Series&nbsp;AA convertible Preferred Stock and Series&nbsp;A convertible Preferred Stock will automatically convert at
its then effective conversion rate into shares of Class&nbsp;B Common Stock upon the closing of an IPO. Upon a vote or written
consent of holders of at least a majority of Series&nbsp;AA convertible Preferred Stock, all outstanding shares of Series AA convertible
Preferred Stock shall automatically be converted into shares of Class A Common Stock at the then effective conversion rate. Upon
a vote or written consent of holders of at least a majority of Series&nbsp;A convertible Preferred Stock (which must include the
consent of a certain significant shareholder or his designee, as long as such significant shareholder or such designee has Voting
Power (as defined in the Company&rsquo;s Amended and Restated Certificate of Incorporation, the &ldquo;Charter&rdquo;) with respect
to at least 20% of the outstanding Series A convertible Preferred Stock), all outstanding shares of Series A convertible Preferred
Stock shall automatically be converted into shares of Class A Common Stock at the then effective conversion rate. The conversion
ratio is subject to adjustment for certain dilutive events, including certain types of stock dividends, stock splits, or a combination
of these. As of December&nbsp;31, 2019, each share of Series&nbsp;AA convertible Preferred Stock and Series&nbsp;A convertible
Preferred Stock could be converted, as described above, into one share of Class&nbsp;B Common Stock or one share of Class&nbsp;A
Common Stock.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(e)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Liquidation</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
the occurrence of a Qualified Liquidation Event, as defined in the Charter, each share of Series AA convertible Preferred Stock
is entitled to receive, before any payment may be made to the holders of any other capital stock of the Company (including all
other series of Preferred Stock of the Company outstanding), an amount equal to the greater of (i) the original issuance price
of each share of Series AA convertible Preferred Stock, plus an amount equal to the amount of compounded annual interest that
such original purchase price would yield had it been deposited from the Series AA Preferred Issue Date, as defined in the Charter,
to the date of payment of such liquidation preference, inclusive, at the Three Month London Interbank Offered Rate (in U.S. dollars)
in effect from time to time during such period, plus 50 basis points (subject to a maximum compounded interest rate per annum
of 5%) (as adjusted for dividends in cash or in kind, share subdivisions, combinations, reclassifications, conversions and consolidations
involving the Company&rsquo;s capital stock and any restructuring, recapitalization, merger and combination involving the Company),
plus all declared but unpaid dividends on such share of Series AA convertible Preferred Stock, and (ii) the amount to which the
holder thereof would have received if such holder had converted all of its shares of Series AA convertible Preferred Stock into
shares of Class A Common Stock immediately prior to such Qualified Liquidation Event. Following the payment in full of the Series
AA Liquidation Amount, as defined in the Charter, the holders of the Series&nbsp;A convertible Preferred Stock are entitled to
receive, before any distributions are made to the holders of the Common Stock, an amount equal to the original issuance price
of each share of Series&nbsp;A convertible Preferred Stock plus any declared but unpaid dividends thereon. After the payment of
all preferential amounts required to be paid to the holders of Series AA convertible Preferred Stock and Series A convertible
Preferred Stock, the remaining assets available will be distributed pro rata among the holders of Series AA convertible Preferred
Stock, Series&nbsp;A convertible Preferred Stock and Common Stock as if all the shares had been converted to Common Stock immediately
prior to such Qualified Liquidation Event.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(f)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Mandatory
                                         Redemption</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Series&nbsp;B-1 and Series&nbsp;B-2 redeemable convertible Preferred Stock was redeemable at any time on or after September&nbsp;29,
2009 upon the receipt by the Company of written notice requesting redemption from the holders representing at least 70% of the
voting power of the then-outstanding shares of (i) the Series&nbsp;B-1 and Series&nbsp;B-2 redeemable convertible Preferred Stock
or (ii) the Series&nbsp;B-2 redeemable convertible Preferred Stock. Individual holders of the Series&nbsp;B-1 and Series&nbsp;B-2
redeemable convertible Preferred Stock were entitled to elect to be excluded from the mandatory redemption transaction. The initial
redemption price for the Series&nbsp;B-1 redeemable convertible Preferred Stock was equal to the original issue price per share
($6.18 per share) of Series&nbsp;B-1 redeemable convertible Preferred Stock plus any declared but unpaid dividends thereon. The
initial, and only, redemption price for the Series&nbsp;B-2 redeemable convertible Preferred Stock was equal to two times the
original issue price per share ($6.18 per share) of Series&nbsp;B-2 redeemable convertible Preferred Stock plus any declared but
unpaid dividends thereon. The mandatory redemption amounts were payable in three equal annual installments, distributed on a pro
rata basis to the holders of then-outstanding Series&nbsp;B-1 and Series&nbsp;B-2 redeemable convertible Preferred Stock. Following
the payment of all initial redemption amounts, the holders of then-outstanding Series&nbsp;B-1 redeemable convertible Preferred
Stock that were redeemed were then entitled to receive a secondary, additional redemption amount equal to one times the original
issue price per share ($6.18 per share) of Series&nbsp;B-1 redeemable convertible Preferred Stock. The secondary redemption payments
to the holders of then-outstanding Series&nbsp;B-1 redeemable convertible Preferred Stock that were redeemed began 60&nbsp;days
after final payment of all initial redemption amounts.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
November&nbsp;16, 2012, the Company received a written notice from the holders of 100% of the outstanding shares of the Series&nbsp;B-2
redeemable convertible Preferred Stock, requesting redemption of all of the outstanding shares of Series&nbsp;B Preferred Stock.
The Company subsequently informed the holders of the Series&nbsp;B-1 redeemable convertible Preferred Stock that their shares
would be redeemed unless they elected to be excluded from the mandatory redemption transaction. One holder of the Series&nbsp;B-1
redeemable convertible Preferred Stock elected to be excluded from the mandatory redemption transaction. The first installment
payment was required to take place no later than 60&nbsp;days subsequent to receipt of the written notice from the holders of
the Series&nbsp;B-2 redeemable convertible Preferred Stock. However, the Company exercised its right to accelerate redemption
payments and, accordingly, the first installment payment to the holders of the Series&nbsp;B-2 redeemable convertible Preferred
Stock was distributed in December&nbsp;2012 in the amount of $13.3&nbsp;million, and the second and final installment payments
were distributed in July&nbsp;2013 in the amount of $26.7&nbsp;million.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
first installment payment to the holders of the Series&nbsp;B-1 redeemable convertible Preferred Stock was distributed in 2013
in the amount of $3.3&nbsp;million. In the fourth quarter of 2013, two holders of the Series&nbsp;B-1 redeemable convertible Preferred
Stock received $1.4&nbsp;million as payment in full for the redemption of all of their remaining outstanding shares. By accepting
this $1.4&nbsp;million payment, the two holders of the Series&nbsp;B-1 redeemable convertible Preferred Stock elected to forego
secondary redemption payments totaling $2.0&nbsp;million. The second and third installment payments to the other redeeming holders
of the Series&nbsp;B-1 redeemable convertible Preferred Stock were distributed in 2014 and 2015 for $2.6&nbsp;million each. The
first and second installment payments under the secondary redemption were paid out in 2015 and 2016 in the amount of $2.6&nbsp;million
each. The third and final installment payment under the secondary redemption to the remaining holders of Series&nbsp;B-1 redeemable
convertible Preferred Stock of $2.6&nbsp;million was paid out in fiscal year 2017.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(g)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Right
                                         of First Refusal</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has a right of first refusal in the event that the holders of Series AA convertible Preferred Stock and Series&nbsp;A
convertible Preferred Stock attempt to sell their shares.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(h)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Pre-emptive
                                         Rights.</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain
holders of Series AA convertible Preferred Stock, Series&nbsp;A convertible Preferred Stock and Common Stock have pre-emptive
rights to purchase any shares of Series AA convertible Preferred Stock, Series&nbsp;A convertible Preferred Stock or Common Stock
that the Company proposes to issue other than in connection with an IPO and certain excluded issuances specified in the Stockholders
Agreement.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(i)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Deemed
                                         dividend</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
March 2017, Liaison purchased 490,706&nbsp;shares of Class&nbsp;A Common Stock and 12,782,546&nbsp;shares of Series&nbsp;A convertible
Preferred Stock from existing shareholders for $91.9&nbsp;million, and 24,870,027&nbsp;shares of newly-issued Series&nbsp;AA Convertible
Preferred Stock from the Company for $172.2&nbsp;million. These were deemed to be a bundled transaction for accounting purposes.
Separate fair value estimates were developed for the Class A Common Stock, Series A convertible Preferred Stock, and Series AA
Convertible Preferred Stock as of March 2017. Considerations that Liaison paid to existing shareholders for their Class A Common
Stock and Series A convertible Preferred Stock in excess of the estimated fair value was recorded as either additional stock-based
compensation expense if the shares sold were originally acquired through stock compensation programs, or as deemed dividend if
otherwise. This resulted in stock-based compensation expense of $2.5 million and a deemed dividend of $19.2 million during the
year ended December 31, 2017.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Additionally,
the Company&rsquo;s share repurchase transaction in 2018 resulted in $20 million deemed dividend during the year ended December
31, 2018. See Note 14 &ndash; Share Repurchase for further discussion about this transaction.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(13)</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Stock-Based
                                         Compensation</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Stock-based
compensation includes stock option awards issued under the Company&rsquo;s employee incentive plan and restricted stock issued
under a significant shareholder&rsquo;s incentive plan, as further discussed in (a) below. There was no income tax benefit recognized
in the consolidated statements of operations for stock-based compensation arrangements in any of the periods presented.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(a)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Stock
                                         Incentive Programs</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>2005
Incentive Award Plan:</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September&nbsp;22, 2005, the Board of Directors approved the Company&rsquo;s 2005 Equity Incentive Plan, which was amended in
January 2008, October 2009, December 2011 and September 2015 (the&nbsp;&ldquo;Incentive Award Plan&rdquo;). Under the
Incentive Award Plan, the Company may grant equity incentive awards to employees, directors, and consultants based on the
Company&rsquo;s Class&nbsp;A Common Stock. A committee of the Board of Directors of the Company determines the eligibility,
types of equity awards, vesting schedules, and exercise prices for equity awards granted. Subject to certain adjustments in
the event of a change in capitalization or similar transaction, the Company may issue a maximum of 14,200,000&nbsp;shares of
its Class&nbsp;A Common Stock under the Incentive Award Plan. The Company issues new shares of Class&nbsp;A Common Stock from
its authorized share pool to settle stock-based compensation awards. The exercise price of options granted under the plan
shall not be less than the fair value of the Company&rsquo;s Class&nbsp;A Common Stock as of the date of grant. Options
typically vest over the term of four years, and are typically exercisable for a period of 10&nbsp;years after the date of
grant, except when granted to a holder who, at the time the option is granted, owns stock representing more than 10% of the
voting power of all classes of stock of the Company or any subsidiaries, in which case, the term of the option shall be no
more than five&nbsp;years from the date of grant. In September&nbsp;2015, the Incentive Award Plan was amended to permit
additional awards to be made after the tenth anniversary of the original adoption of said plan.</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Significant
Shareholder Incentive Plan:</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2016, a significant shareholder established an incentive program (the&nbsp;&ldquo;Significant Shareholder Incentive
Program&rdquo;) where he caused to be transferred a total of 5,198,458&nbsp;shares of the Company&rsquo;s Series&nbsp;A
Preferred Stock from Tekhill USA LLC, a limited liability company fully owned by the significant shareholder, into the Fred
Chang Partners Trust (the&nbsp;&ldquo;Trust&rdquo;). In March&nbsp;and May&nbsp;2016, the Trust entered into restricted share
award agreements (the&nbsp;&ldquo;Award Agreements&rdquo;) with several key executives of the Company, under which the Trust
granted a total of 5,090,157 restricted shares of the Company&rsquo;s Series&nbsp;A Preferred Stock to those executives to be
vested over a 15-year period in equal annual installments on each anniversary date of the grant date. As of December&nbsp;31,
2016, the Award Agreements were terminated with a concurrent offer from the significant shareholder to re-establish the
Significant Shareholder Incentive Program. During the year ended December 31, 2017, the re-established incentive program (the
&ldquo;Re-established Significant Shareholder Incentive Program&rdquo;) granted a total of 3,898,843 restricted shares of the Company&rsquo;s Series A Preferred Stock to a subset
of the same recipients with
substantially the same terms as those under the Significant Shareholder Incentive Program. The Re-established Significant
Shareholder Incentive Program subsequently modified the vesting period from 15 years to 10 years during the year ended
December 31, 2017, which did not have a significant impact on the consolidated financial statements.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(b)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Stock
                                         Compensation Valuation Assumptions</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
fair value of each option award granted under the Incentive Award Plan is estimated using the Black-Scholes-Merton option pricing
model on the date of grant. This model requires the input of highly complex and subjective variables. These variables include,
but are not limited to, the expected stock price volatility over the expected life of the awards and actual and projected employee
stock option exercise behavior with the following inputs: risk-free interest rate, expected stock price volatility, forfeiture
rate, expected term, dividend yield and weighted average grant date fair value.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
risk-free interest rate is based on the currently available rate on a U.S.&nbsp;Treasury zero-coupon issue with a remaining term
equal to the expected term of the option converted into a continuously compounded rate. The expected volatility of stock options
is based on a review of the historical volatility and the implied volatility of a peer group of publicly traded companies comparable
to the Company. In evaluating comparability, the Company considered factors such as industry, stage of life cycle, and size. After
the adoption of Accounting Standards Update No. 2016-09 <I>Compensation-Stock Compensation (Topic 718): Improvements to Employee
Share-Based Payment Accounting</I> as of January 1, 2017, the Company elected to continue to estimate the total number of awards
for which the requisite service period will not be rendered based on historical data. The expected term assumption used by the
Company reflects the application of the simplified method set out in Securities and Exchange Commission Staff Accounting Bulletin
No.&nbsp;110, Shared-Based Payment. The simplified method defines the expected term of an option as the average of the contractual
term of the options and the weighted average vesting period for all option tranches. The dividend yield reflects the Company&rsquo;s
dividend rate on the date of grant. The Company did not grant any stock options during the years ended December 31, 2019, 2018
and 2017.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
cost of the restricted shares is determined using the fair value of the Company&rsquo;s Series&nbsp;A Convertible Preferred Stock
on the date of the grant. Compensation expense is recognized on a straight-line basis over the vesting period. There was no grant
of the restricted shares under the Re-established Significant Shareholder Incentive Program during the years ended December 31,
2019, 2018 and 2017.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(c)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Stock
                                         Option and Restricted Stock Activity</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Stock
Option</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table summarizes the activity for all stock options granted:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Average</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Weighted</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">remaining</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Aggregate</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">average</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">contractual</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">intrinsic</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Options</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">exercise</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">terms</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">value</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">outstanding</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">price</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">(in years)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">(in&nbsp;thousands)</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%">Outstanding at December 31, 2018</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">3,979,132</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">3.36</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in">Exercised</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Forfeited or expired</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,376,954</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">4.91</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">Outstanding at December 31, 2019</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,602,178</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">$</TD><TD STYLE="padding-bottom: 4pt; text-align: right">2.54</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: right">4.80</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">$</TD><TD STYLE="padding-bottom: 4pt; text-align: right">1,723</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Vested and expected to vest at December 31, 2019</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,588,640</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.54</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.80</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,705</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Exercisable at December 31, 2019</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,466,801</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.59</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.72</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,544</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the years ended December 31, 2019, 2018 and 2017, the total intrinsic value of stock options exercised was $0, $0.8 million and
$0, respectively, and the compensation expense for stock options granted included in &ldquo;Selling, general and administrative
expenses&rdquo; in the consolidated statements of operations totaled $0.2 million, $0.4 million and $0.7 million, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December&nbsp;31, 2019 and 2018, there were $0.1 million and $0.3 million, respectively, of unrecognized compensation costs
related to nonvested options. The weighted average remaining vesting term of the stock option was 0.39 years as of December 31,
2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Restricted
Stock</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table summarizes the activity for restricted stock issued from the Fred Chang Partners Trust under the Re-established
Significant Shareholder Incentive Program:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-weight: bold">Weighted-average</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Shares</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">grant date <BR>
    fair value</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%">Unvested at December 31, 2018</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">2,695,497</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">1.58</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt">Vested</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(336,936</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1.58</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt">Unvested at December 31, 2019</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,358,561</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1.58</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the years ended December 31, 2019, 2018 and 2017, the compensation expense for restricted shares granted included in &ldquo;Selling,
general and administrative expenses&rdquo; in the consolidated statement of operations totaled $0.5 million, $0.4 million and
$0.8 million, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December&nbsp;31, 2019 and 2018, there were $3.4 million and $3.9 million, respectively, of unrecognized compensation costs
related to restricted stock. The weighted average remaining vesting term of the restricted stock was 6.33 years as of December
31, 2019.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(d)</I></B></FONT></TD><TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Common
                                         Stock Valuations</I></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.55in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
exercise prices of stock options and restricted stock granted were determined contemporaneously by the Company&rsquo;s Board of
Directors based on the estimated fair value of the underlying Class&nbsp;A Common Stock and Series A convertible Preferred Stock.
The Class&nbsp;A Common Stock and Series A convertible Preferred Stock valuations were based on a combination of the income approach
and two market approaches, which were used to estimate the total enterprise value of the Company. The income approach quantifies
the present value of the future cash flows that management expects to achieve from continuing operations. These future cash flows
are discounted to their present values using a rate corresponding to the Company&rsquo;s estimated weighted average cost of capital.
The Company&rsquo;s weighted average cost of capital is calculated by weighting the required return on interest-bearing debt and
common equity capital in proportion to their estimated percentages in the Company&rsquo;s capital structure. The market approach
considers multiples of financial metrics based on acquisition values or quoted trading prices of comparable public companies.
An implied multiple of key financial metrics based on the trading and transaction values of publicly traded peers is applied to
the Company&rsquo;s similar metrics in order to derive an indication of value. A marketability discount is then applied to reflect
the fact that the Company&rsquo;s Class&nbsp;A Common Stock and Series A convertible Preferred Stock are not traded on a public
exchange. The amount of the discount varies based on management&rsquo;s expectation of effecting a public offering of the Company&rsquo;s
Class&nbsp;A Common Stock within the ensuing 12 months. The enterprise value indications from the income approach and market approaches
were used to estimate the fair value of the Company&rsquo;s Class&nbsp;A Common Stock and Series A convertible Preferred Stock
in the context of the Company&rsquo;s capital structure as of each valuation date. Each valuation was based on certain estimates
and assumptions. If different estimates and assumptions had been used, these valuations could have been different.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(14)</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Share
                                         Repurchase</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; margin: 0pt 0 0pt 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 16, 2018, the Company&rsquo;s Board of Directors approved a share repurchase program authorizing the repurchase of 6,640,447
shares of Series A convertible Preferred Stock and Class A Common Stock. The following table identifies shares of the Company&rsquo;s
Series A convertible Preferred Stock and Class A Common Stock that were repurchased during 2018:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Series A <BR>
    Convertible <BR>
    Preferred <BR>
    Stock</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Class A <BR>
    Common <BR>
    Stock</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%">Shares repurchased</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">6,422,393</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">94,189</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Price per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">6.93</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">6.93</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Total investment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">44,480,466</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">652,338</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; margin: 0pt 0 0pt 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
repurchase price of $6.93 per share for the Class A Common Stock and Series A convertible Preferred Stock in excess over the fair
value was recorded as additional stock-based compensation expense if the shares repurchased were originally acquired through stock
compensation programs. If the shares were not originally acquired through stock compensation programs, the repurchase price in
excess of the carrying value of the preferred shares was recorded as a deemed dividend. This resulted in a $3.1 million stock-based
compensation expense and a $20 million deemed dividend during the year ended December 31, 2018. The Company did not repurchase
any shares for the years ended December 31, 2019 and 2017. The excess of the repurchase price over the par value of the Series
A Convertible Preferred Stock and Class A Common Stock was recorded in additional paid-in capital.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(15)</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Net
                                         Loss per Share</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; margin: 0pt 0 0pt 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Basic
and diluted net loss per share is presented using the two-class method required for participating securities: Series AA convertible
Preferred Stock, Series A convertible Preferred Stock and Class A Common Stock. Basic net loss per share is computed using the
weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed using
the weighted-average number of shares of common stock and, if dilutive, common stock equivalents outstanding during the period.
The Company&rsquo;s common stock equivalents consist of shares of common stock issuable upon the exercise of stock options and
the conversion of Series AA convertible Preferred Stock and Series A convertible Preferred Stock. For the periods in which the
Company has generated net loss, the basic and diluted net loss per share are the same because common stock equivalents are excluded
from diluted net loss per share due to their antidilutive impact.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; margin: 0pt 0 0pt 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table summarizes the calculation of basic and diluted net loss per common share (in thousands, except per share data):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year Ended December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(16,991</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(33,603</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(11,967</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-align: left; text-indent: -10pt">Dividend or deemed dividend paid to Series A convertible
    Preferred Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(19,960</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(19,247</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Net loss attributable to common stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(16,991</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(53,563</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(31,214</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-align: left; text-indent: -10pt">Weighted average common shares used for basic and diluted
    net loss per share computation</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">849</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">664</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">709</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Net loss per common share:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">&nbsp;&nbsp;Basic and diluted</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(20.01</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(80.68</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(44.04</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following shares were excluded from the calculation of diluted net loss per share calculation as their effect would have been
anti-dilutive (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year Ended December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left">Stock options</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">2,602</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">3,979</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">5,285</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt; text-align: left; text-indent: -10pt">Common stock issuable from the conversion of Series AA
    convertible Preferred Stock and Series A convertible Preferred Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">61,346</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">61,346</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">67,768</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(16)</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Commitments
                                         and Contingencies</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">From
time to time, the Company is a party to various lawsuits, claims, and other legal proceedings that arise in the ordinary course
of business. The Company discloses contingencies deemed to be reasonably possible and accrues loss contingencies when, in consultation
with legal advisors, it is concluded that a loss is probable and reasonably estimable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left">In February 2018, the Commonwealth
of Massachusetts Department of Revenue issued a notice of intent to assess sales/use taxes on the Company for the period from October
1, 2017 through October 31, 2017 for a total assessment of $652,255 including penalties and interest. The Department of Revenue
subsequently reduced this amount to $295,911. In May 2020, the Company received from the Commonwealth of Massachusetts Department
of Revenue another notice of assessment for sales and use taxes for the months of November 2017 through September 2018 in the amount
of $2,721,370, including penalties and interest. The Company has appealed these assessments and the Company intends to vigorously
protest them. The outcome of this matter or the timing of such payments, if any, cannot be predicted at this time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
2017, the Company, along with two of its subsidiaries and various third parties, were named as defendants in a case brought by
four South Korean banks in U.S. District Court for the Central District of California. The complaint alleged claims for intentional
and negligent misrepresentation, negligent supervision and unfair competition, and sought damages against the Company and two
subsidiaries. In April 2018, the Court dismissed all claims against Newegg Trading Limited without prejudice. In October 2018,
the court granted the Company&rsquo;s motion to dismiss all claims against the Company and its remaining subsidiary without leave
to amend.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
December 2014, an individual plaintiff sued Newegg.com Americas Inc. (&ldquo;Newegg.com Americas&rdquo;) in Superior Court in
Los Angeles County, California, alleging that Newegg.com Americas had engaged in deceptive advertising practices and seeking to
certify a class action. In 2016, the Court sustained Newegg.com Americas&rsquo; demurrer to the plaintiff&rsquo;s claims without
leave to amend. The plaintiff appealed, and in July 2018 the Court of Appeal reversed the decision of the trial court, thus allowing
the case to proceed. The matter is now pending in the trial court. The Company does not believe that a loss is probable and intends
to vigorously defend itself and its subsidiaries. Depending on the amount and timing, an unfavorable result could materially affect
the Company&rsquo;s business, consolidated results of operations, financial position or cash flows.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to the legal proceedings mentioned above, from time to time, the Company may become involved in legal proceedings arising
in the ordinary course of business. There can be no assurance with respect to the outcome of any legal proceeding. The outcome
of the litigation described above, the other pending lawsuits filed against the Company and other claims, including those that
may be made in the future, may be adverse to the Company, and the monetary liability and other negative operational or financial
impact may be material to the Company&rsquo;s consolidated results of operations, financial position, and cash flows.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(17)</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Employee
                                         Benefit Plan</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company maintains a 401(k) defined-contribution plan for the benefit of its eligible employees. All full-time domestic employees
who have completed at least six months of service and are at least 18&nbsp;years of age are eligible to participate in the plan.
Eligible employees may elect to contribute up to 100% of their eligible compensation. The Company&rsquo;s matching contributions
are made at the discretion of the Company&rsquo;s Board of Directors. In addition, the Company may make a profit-sharing contribution
at the sole discretion of the Board of Directors. Total contributions by the Company for each of the years ended December&nbsp;31,
2019, 2018 and 2017 were $1.8 million. Contributions made by the Company are immediately 100% vested.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(18)</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Related
                                         Party Transactions</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal"><U>Investment</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 17, 2018, the Company acquired an equity interest in Mountain Capital Fund L.P. from Pegasus. The sole owner of Pegasus
is the spouse of a member of the Company&rsquo;s Board of Directors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal"><U>Loans
to Affiliate</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 13, 2017, the Company loaned $12.0 million to Digital Grid under a term loan agreement with a maturity date of April 18,
2017 and an interest rate equal to the Prime Rate, as defined in the loan agreement (the &ldquo;$12.0 Million Loan&rdquo;). The
$12.0 Million Loan was collateralized by a security interest in 2,000,000 Series AA convertible Preferred Stock of the Company
held by Digital Grid.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 16, 2017, the Company loaned $50.0 million to Digital Grid under a term loan agreement with a maturity date of June 15, 2018
and an interest rate of 4% per annum (the &ldquo;$50.0 Million Loan&rdquo;). The $50.0 Million Loan was collateralized by a security
interest in 43,167 Series C Shares of Razer Inc., a company incorporated under the laws of the Cayman Islands (&ldquo;Razer&rdquo;),
held by Digital Grid.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 20, 2018, the Company loaned $20.0 million to Digital Grid under a term loan agreement with a maturity date of June 15,
2018 and an interest rate equal to 4% per annum (the &ldquo;$20.0 Million Loan&rdquo;). The $20.0 Million Loan was collateralized
by a security interest in 362,732,301 Ordinary Shares of Razer held by Digital Grid.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 11, 2018, the Company and Digital Grid entered into an amended and restated loan agreement which combined all of the remaining
unpaid principal and interest on the $50.0 Million Loan and the $20.0 Million Loan into an amended and restated secured promissory
note of approximately $23.3M (the &ldquo;$23.3 Million Loan&rdquo;). The $23.3 Million Loan replaces, amends, and restates in
their respective entirety the $50.0 Million Loan and the $20.0 Million Loan. The $23.3 Million Loan had a maturity date of June
15, 2018 and carried an interest rate equal to 4% per annum. This loan was collateralized by a security interest in certain convertible
bonds of China Digital Culture (Group) Limited, a company incorporated in the Cayman Islands, in the amount of HK$412,500,000
held by Digital Grid.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 15, 2018, the Company and Digital Grid entered into the First Amendment to the $23.3 Million Loan, pursuant to which the
interest rate was amended to 5% per annum and the maturity date was extended to September 30, 2018. The $23.3 Million Loan was
paid back in full by September 11, 2018. As of December 31, 2018, there was no outstanding principal balance receivable from affiliate.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 17, 2019, the Company loaned $15.0 million to Digital Grid under a term loan agreement with a maturity date of April
30, 2020&nbsp; and a fixed interest rate of 5.0% (the &ldquo;$15.0 Million Loan&rdquo;). The $15.0 Million Loan was subsequently
extended to December 31, 2020. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the years ended December 31, 2018 and 2017, the Company recorded interest income of $0.9 million and $1.1 million, respectively,
from loans to affiliate in interest income in the consolidated statement of operations. During the year ended December 31, 2019,
the Company&rsquo;s interest income from loans to affiliate included in interest income in the consolidated statement of operations
was immaterial. As of December 31, 2019, the amount of interest receivable on the $15.0 Million Loan outstanding as a component
of &ldquo;Dues from related parties&rdquo; in the consolidated balance sheets was immaterial. As of December 31, 2018, there was
no outstanding interest receivable from loans to affiliate.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Loans
from Affiliate</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 14, 2019, the Company entered into three loan agreements with BARD Company Limited, an entity affiliated with our Chief
Executive Officer, pursuant to which the Company borrowed a total of $15.0 million. For all of the three loans, the maturity date
was March 31, 2019 unless extended to April 30, 2019 in accordance with the terms of the loan agreements, and the interest rate
is 6% per annum. The Company repaid the three loans in their entirety as of March 8, 2019.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Sales
to Related Parties</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Due
from related parties and net sales to related parties primarily reflect sales of finished goods and services with the exception
of loans to affiliate as discussed above.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">As
of&nbsp;December 31, 2019 and 2018,&nbsp;due from related parties represent amounts receivable of&nbsp;$1.5 million and&nbsp;$1.5
million, respectively, due from Digital Grid (Hong Kong) Technology (&ldquo;Digital Grid&rdquo;).&nbsp;Digital Grid is determined
to be&nbsp;a related party by virtue of common control. Sales during the&nbsp;year ended&nbsp;December 31, 2019, 2018 and 2017&nbsp;to
this related party were&nbsp;$0, $0, and $1.5 million, respectively.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">As
of&nbsp;December 31, 2019 and 2018,&nbsp;due from related parties represent amounts receivable of&nbsp;$4.3 million and&nbsp;$3.5
million, respectively, due from Connect Technova Inc. (&ldquo;Connect Technova&rdquo;).&nbsp;Connect Technova is determined
to be&nbsp;a related party by virtue of common control. Sales during the&nbsp;year ended&nbsp;December 31, 2019, 2018 and 2017&nbsp;to
this related party were&nbsp;$0.8 million, $2.9 million&nbsp;and $0.6 million, respectively.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of&nbsp;December 31, 2019 and 2018,&nbsp;amount due to related parties was immaterial.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(19)</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Segment
                                         Information</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s Chief Executive Officer, who is the chief operating decision maker (&ldquo;CODM&rdquo;) reviews financial information
presented on a consolidated basis. There are no segment managers who are held accountable for operations, operating results and
plans for levels or components below the consolidated unit level. The Company considers itself to be operating within one reportable
segment.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"> Revenue from
external customers for each group of similar products and services are not reported to the CODM. The Company&rsquo;s product categories
as well as the aggregation of the Company&rsquo;s product SKUs (&ldquo;Stock Keeping Units&rdquo;) into product categories regularly
change. Separate identification of this information is impractical, as it is not readily available and the cost to develop it
would be excessive. The following table summarizes net sales from external customers for the years ended December 31, 2019, 2018
and 2017 (in thousands): </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap"> &nbsp; </TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="10" STYLE="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> Year
    Ended December 31, </TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap"> &nbsp; </TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 2019 </TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 2018 </TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"> 2017 </TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left"> United States </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 9%; text-align: right"> 1,378,843 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 9%; text-align: right"> 1,811,254 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 9%; text-align: right"> 1,958,475 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> Canada </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 117,406 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 158,681 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 151,183 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt"> Rest of world </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 37,679 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 52,502 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"> 48,472 </TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-bottom: 4pt"> Total </TD><TD STYLE="font-weight: bold; padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right"> 1,533,928 </TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right"> 2,022,437 </TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 4pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 4pt double; font-weight: bold; text-align: right"> 2,158,131 </TD><TD STYLE="padding-bottom: 4pt; font-weight: bold; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table summarizes net property, plant and equipment by country (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2019</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2018</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2017</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left">United States</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">20,650</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">29,297</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">30,389</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Canada</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">447</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">718</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,100</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">China</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">26,033</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">27,427</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">29,985</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">&nbsp;&nbsp;&nbsp;&nbsp;Total</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">47,130</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">57,442</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">61,474</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.3in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(20)</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Subsequent
                                         Events</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">The
Company has evaluated subsequent events from the balance sheet date through October 23, 2020, the date the consolidated financial
statements were issued.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">(1)</FONT></TD><TD STYLE="padding-right: 0; text-align: left; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">On
                                         January 30, 2020, the World Health Organization (&ldquo;WHO&rdquo;) announced a global
                                         health emergency because of a new strain of coronavirus originating in Wuhan, China (the
                                         &ldquo;COVID-19 outbreak&rdquo;) and the risks to the international community as the
                                         virus spread globally beyond its point of origin. In March 2020, the WHO classified the
                                         COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">(2)</FONT></TD><TD STYLE="padding-right: 0; text-align: left; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">On
                                         March 27, 2020, the &lsquo;Coronavirus Aid, Relief, and Economic Security Act&rsquo;
                                         (the CARES Act) was signed into law by the president. The CARES act provides several
                                         favorable tax provisions. The Company evaluated the impacts of CARES Act and determined
                                         it has no material impact to the income tax provision.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">(3)</FONT></TD><TD STYLE="padding-right: 0; text-align: left; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">The
                                         full impact of the COVID-19 outbreak continues to evolve as of the date of this report.
                                         As such, it is uncertain as to the full magnitude that the pandemic will have on the
                                         Company&rsquo;s financial condition, liquidity and future results of operation. Management
                                         is actively monitoring the global situation on its financial condition, liquidity, operations,
                                         suppliers, industry and workforce. Given the almost daily evolution of the COVID-19 outbreak
                                         and the global responses to curb its spread, the Company is not able to estimate the
                                         effects of the COVID-19 outbreak on its results of operations, financial condition or
                                         liquidity for fiscal year 2020. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: -5.75pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: -5.75pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">(4)</FONT></TD><TD STYLE="padding-right: 0; text-align: left; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">The
                                         Company&rsquo;s online business and warehouses remain active to serve our customers during
                                         the COVID-19 outbreak, and to-date the Company has seen increased demand for its products
                                         and services during the outbreak. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">(5)</FONT></TD><TD STYLE="padding-right: 0; text-align: left; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">However,
                                         the course of the COVID-19 outbreak remains uncertain, and a prolonged global economic
                                         slowdown and increased unemployment could have a material adverse impact on economic
                                         and market conditions, which in turn could lead to a reduced demand for the Company&rsquo;s
                                         products and services.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding-right: 0; width: 0.3in; padding-left: 0"></TD><TD STYLE="padding-right: 0; width: 0.25in; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">(6)</FONT></TD><TD STYLE="padding-right: 0; text-align: left; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">As
                                         a consequence of the COVID-19 outbreak, the Company has experienced occasional supply
                                         constraints, primarily in the form of delays in shipment of inventory. The Company has
                                         also experienced some increases in the cost of certain products, as well as a drop in
                                         promotions by some manufacturers. While the Company considers such events to be relatively
                                         minor and temporary, continued supply chain disruptions could lead to delayed receipt
                                         of, or shortages in, inventory and higher costs, and negatively impact sales in fiscal
                                         year 2020.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: left; text-indent: -5.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-style: normal; font-variant: normal; font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Although
the Company cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time, if the pandemic continues,
it may have an adverse effect on the Company&rsquo;s results of future operations, financial position and liquidity in fiscal
year 2020.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
June 2020, the Company granted a total of 7.528 million options under the Incentive Award Plan with an original exercise price
of $3.20 per share. For most grantees, the options vest at the rate of twenty-five percent on the first anniversary of the grant
date, with the remaining portion vesting in 36 equal monthly increments thereafter. For grantees who are residents of the People&rsquo;s
Republic of China, the options vest each year at the rate of twenty-five percent upon the date of the latter of the following
to occur: on the anniversary of the grant date or the date the Company&rsquo;s Class A Common shares first become publicly traded.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin: 0pt 0 0pt 0.3in; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0; text-align: left; margin: 0pt 0 0pt 0.3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Also,
in June 2020, the Company granted a total of 1.36 million options under the Incentive Award Plan with an original exercise price
of $6.93 per share. These options vest at the rate of twenty-five percent on the first anniversary of the grant date, with
the remaining portion vesting in 36 equal monthly increments thereafter.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left">In September 2020, the Company
paid back the revolving credit facility of $1.4 million in full.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-indent: 0; text-align: left">In October 2020, the Company
entered into a lease agreement for 275,985 square feet of office and warehouse space, with commencement date on November 1, 2020.
The lease has a 100 month term, and rental cost of approximately $193,000 per month.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"></P>

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<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B><A NAME="annexa_001"></A>Annex A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>AGREEMENT AND PLAN OF MERGER</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">This AGREEMENT AND PLAN
OF MERGER, dated as of October 23, 2020 (this &ldquo;<U>Agreement</U>&rdquo;), is entered into by and among Lianluo Smart Limited,
a business company incorporated under the laws of the British Virgin Islands (&ldquo;<U>LLIT</U>&rdquo;), Newegg Inc., a Delaware
corporation (&ldquo;<U>Newegg</U>&rdquo;), and Lightning Delaware Sub, Inc., a Delaware corporation and a wholly owned subsidiary
of LLIT (&ldquo;<U>Merger Sub</U>&rdquo;). LLIT, Newegg and Merger Sub are sometimes referred to herein individually as a &ldquo;<U>Party</U>&rdquo;
and, collectively, as the &ldquo;<U>Parties</U>&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">WITNESSETH:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">WHEREAS, LLIT is a British
Virgin Islands business company which is currently authorized to issue a maximum of 6,250,000 common shares, divided into (i) 4,736,111
Class A common shares, par value $0.021848 per share (&ldquo;<U>LLIT Class A Shares</U>&rdquo;), of which 2,210,684 shares are
issued and outstanding as of the date hereof, and (ii) 1,513,889 Class B common shares, par value $0.021848 per share, (&ldquo;<U>LLIT
Class B Shares</U>&rdquo;), of which 1,388,888 shares are issued and outstanding as of the date hereof;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">WHEREAS, Merger Sub is
a Delaware corporation having authorized capital stock consisting of 100 shares of Common Stock, par value $0.01 per share (the
&ldquo;<U>Merger Sub Common Stock</U>&rdquo;), of which all 100 shares are issued and outstanding as of the date hereof, all of
which are owned of record and beneficially by LLIT;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">WHEREAS, Newegg is a
Delaware corporation having authorized capital stock consisting of: (i)&nbsp;142,000,000 shares of Class A common stock, par value
$0.001 per share (&ldquo;<U>Newegg Class A Shares</U>&rdquo;), of which 849,159 shares are issued and outstanding as of the date
hereof, (ii) 59,000,000 shares of Class B common stock, par value $0.001 per share (&ldquo;<U>Newegg Class B Shares</U>&rdquo;),
of which no shares are issued and outstanding as of the date hereof, (iii) 25,889,968 shares of Series AA preferred stock, par
value $0.001 per share (&ldquo;<U>Newegg Series AA Preferred Shares</U>&rdquo;), of which 24,870,027 shares are issued and outstanding
as of the date hereof, and (iv) 59,000,000 shares of Series A preferred stock, par value $0.001 per share (&ldquo;<U>Newegg Series
A Preferred Shares</U>&rdquo;), of which 36,475,987 shares are issued and outstanding as of the date hereof (collectively, &ldquo;<U>Newegg
Shares</U>&rdquo;);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">WHEREAS, LLIT and Beijing
Fenjin Times Technology Development Co., Ltd., a corporation organized under the laws of People&rsquo;s Republic of China (the
&ldquo;<U>Disposition Acquirer</U>&rdquo;) have entered into that certain Equity Transfer Agreement, (the &ldquo;<U>Disposition
Agreement</U>&rdquo;) on the same date of this Agreement, pursuant to which LLIT has agreed to sell all of the equity interests
in Lianluo Connection Medical Wearable Device Technology (Beijing) Co., Ltd, the wholly-owned subsidiary of LLIT (&ldquo;<U>Lianluo
Connection</U>&rdquo;), and all remaining assets and liabilities of Lianluo Connection owned immediately prior to the Closing to
the Disposition Acquirer (the &ldquo;<U>Disposition</U>&rdquo;, together with the Merger, the &ldquo;<U>Restructure</U>&rdquo;),
on the Closing Date (as defined below) on or immediately after the Effective Time (as defined below);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">WHEREAS, the respective
Boards of Directors of LLIT, Newegg and Merger Sub, together with the LLIT Special Committee and the Newegg Special Committee,
have unanimously approved and declared advisable the merger of Merger Sub with and into Newegg (the &ldquo;<U>Merger</U>&rdquo;),
upon the terms and subject to the conditions set forth herein;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">WHEREAS, Hangzhou Lianluo
Interactive Technology Co., Ltd. (&ldquo;<U>Hangzhou Lianluo</U>&rdquo;), which beneficially owns 1,388,888 outstanding LLIT Class
B Shares, representing 100% of the LLIT Class B Shares and 86.27% of the aggregate outstanding voting power of all classes of LLIT
Shares and Ping Chen, who beneficially owns 201,692 outstanding shares of LLIT Class A Shares, representing 9.12% of outstanding
LLIT Class A Shares and 1.25% of the aggregate outstanding voting power of all classes of LLIT Shares, have entered into a voting
agreement simultaneously with the execution of this Agreement in the form attached hereto as <U>Exhibit A</U>, pursuant to which
Hangzhou Lianluo and Ping Chen agree to vote in favor of the Merger, the Disposition, the Offering and any other transactions contemplated
herein or described in the Form F-4 (as hereinafter defined) (the &ldquo;<U>Support Agreements</U>&rdquo;);&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">WHEREAS, within 5 days
after the date hereof, stockholders of Newegg who hold a majority (measured both including and excluding any such stockholders
who are affiliated with Hangzhou Lianluo) of each class and each series of Newegg Shares will act by written consent to adopt this
Agreement and approve the transactions contemplated herein;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">WHEREAS, LLIT shall prepare,
with the assistance and cooperation of Newegg, and file with the Securities and Exchange Commission (&ldquo;<U>SEC</U>&rdquo;)
a registration restatement on Form F-1 (as amended or supplemented from time to time, the &ldquo;<U>Form F-1</U>&rdquo;) in connection
with an offering of a certain number of LLIT Class A Shares for $30,000,000, or such other amount reasonably determined by Newegg
that is necessary for LLIT to meet NASDAQ initial listing requirements (the &ldquo;<U>Offering</U>&rdquo;), which will be closed
simultaneously with the Restructure;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">WHEREAS, LLIT shall prepare,
with the assistance and cooperation of Newegg, and file with the SEC a Form F-4 (as amended or supplemented from time to time,
and including the notice to shareholders contained therein, the &ldquo;<U>Form F-4</U>&rdquo;) in connection with the registration
under the Securities Act of 1933, as amended (the &ldquo;<U>Securities Act</U>&rdquo;), of the LLIT Exchange Shares (as hereinafter
defined) to be issued in the Merger (such registration statement, the &ldquo;<U>Merger Registration Statement</U>&rdquo;), which
will also contain a proxy solicitation statement and notice to LLIT&rsquo;s shareholders of the Shareholder Meeting (as hereinafter
defined) held for the purpose of considering matters in connection with the Restructure and the Offering (the &ldquo;<U>Shareholder
Meeting Notice</U>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">NOW, THEREFORE, in consideration
of the premises, representations, warranties and agreements herein contained, the Parties to this Agreement agree as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">ARTICLE I<BR>
<BR>
THE MERGER</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 1.1 <U>The
Merger</U>. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the Delaware General
Corporation Law (the &ldquo;<U>DGCL</U>&rdquo;), Merger Sub shall be merged with and into Newegg at the Effective Time (as hereinafter
defined). Following the Merger, the separate corporate existence of Merger Sub shall cease and Newegg shall continue as the surviving
corporation of the Merger (the &ldquo;<U>Surviving Corporation</U>&rdquo;) and as a wholly-owned subsidiary of LLIT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 1.2 <U>Effective
Time</U>. The Merger shall become effective immediately when a Certificate of Merger (the &ldquo;<U>Certificate of Merger</U>&rdquo;),
prepared and executed in accordance with the relevant provisions of the DGCL, is duly filed with the Secretary of State of the
State of Delaware or, if agreed to by LLIT (acting through the LLIT Special Committee) and Newegg (acting through the Newegg Special
Committee), at such time thereafter as is provided in the Certificate of Merger (the &ldquo;<U>Effective Time</U>&rdquo;). The
filing of the Certificate of Merger shall be made on the Closing Date (as hereinafter defined).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 1.3 <U>Effects
of the Merger</U>. The Merger shall have the effects set forth in this Agreement and in the applicable provisions of the DGCL.
Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the property, rights, privileges,
powers and franchises of Newegg and Merger Sub shall vest in the Surviving Corporation, and all the debts, liabilities and duties
of Newegg and Merger Sub shall become the debts, liabilities and duties of the Surviving Corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 1.4 <U>Certificate
of Incorporation, Bylaws, Directors and Officers of the Surviving Corporation</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a) At the
Effective Time, the Certificate of Incorporation of the Surviving Corporation shall be amended in its entirety to be identical
to the Certificate of Incorporation of the Merger Sub, as in effect immediately prior to the Effective Time (except that references
to the name of Merger Sub shall be replaced by references to the name of the Surviving Corporation) until thereafter changed or
amended as provided therein or by applicable Laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b) At the Effective
Time, the Bylaws of the Surviving Corporation shall be amended in its entirety to be identical to the Bylaws of Merger Sub, as
in effect immediately prior to the Effective Time (except that references to the name of Merger Sub shall be replaced by references
to the name of the Surviving Corporation) until thereafter changed or amended as provided therein or in the Certificate of Incorporation
of the Surviving Corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c) The directors and officers
of the Surviving Corporation at the Effective Time shall be the directors and officers of Newegg, until the earlier of their resignation or removal or
until their respective successors are duly elected and qualified, as the case may be.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 1.5 <U>Amended
Charter, Directors and Officers of LLIT</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a) At the
Effective Time, LLIT shall cause its Memorandum and Articles of Association to be amended and restated in the form of the Amended
Charter (as hereinafter defined).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b) The
Parties shall take all action necessary (including, to the extent necessary, procuring the resignation or removal of any directors
on the Board of Directors of LLIT (the &ldquo;<U>LLIT Board</U>&rdquo;) immediately prior to the Effective Time) so that, as of
the Effective Time, the LLIT Board shall be comprised of the individuals listed on&nbsp;<U>Exhibit B</U>&nbsp;attached hereto.
Each individual listed on&nbsp;<U>Exhibit B</U>&nbsp;shall become a director of LLIT effective as of the Effective Time, to serve
for the terms set forth on&nbsp;<U>Exhibit B</U>&nbsp;until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c) The
Parties shall take all action necessary so that, as of the Effective Time, the individuals listed on&nbsp;<U>Exhibit B</U>&nbsp;shall
be appointed as the executive officers of LLIT. Each existing executive officer of LLIT who is not remaining in such capacity shall
submit a written resignation from his or her position as an executive officer of LLIT on or prior to the Closing Date, which shall
be effective as of the Effective Time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(d) Prior to the Effective
Time, in the event that any individual set forth on <U>Exhibit B</U> is unable or unwilling to serve on the LLIT Board or as an
officer of LLIT, then Newegg shall select a replacement for such individual to serve in such person&rsquo;s place. The Parties
shall take all action necessary to ensure that any such replacement designee is duly qualified and appointed as a director of the
LLIT Board or as an officer of LLIT as of the Effective Time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 1.6 <U>Conversion
of Securities</U>. At the Effective Time, by virtue of the Merger and without any action on the part of LLIT, Newegg, Merger Sub
or the holders of any securities of LLIT, Newegg or Merger Sub, other than as contemplated in this Agreement, the following shall
occur:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a) Each
share of Merger Sub Common Stock issued and outstanding immediately prior to the Effective Time shall be converted into and become
one fully paid and non-assessable share of common stock, par value $0.01 per share, of the Surviving Corporation (and the shares
of the Surviving Corporation into which the shares of Merger Sub Common Stock are so converted shall be the only shares of the
Surviving Corporation&rsquo;s capital stock that are issued and outstanding immediately after the Effective Time), so that immediately
following the Effective Time, LLIT will be the holder of all the issued and outstanding shares of capital stock of the Surviving
Corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b) Subject
to the provisions of&nbsp;<U>Sections 1.8</U>&nbsp;and&nbsp;<U>1.9</U>, each Newegg Share that is issued and outstanding immediately
prior to the Effective Time (including any Newegg Class A Shares, Newegg Class B Shares, Newegg Series Preferred A Shares and Newegg
Series AA Preferred Shares but excluding any Dissenting Shares (as hereinafter defined) or Excluded Shares (as hereinafter defined))
shall be exchanged for and converted into such number of validly issued, fully paid and non-assessable LLIT Class A Shares (the
&ldquo;<U>LLIT Exchange Shares</U>&rdquo;) equal to the LLIT Conversion Ratio (the total number of LLIT Exchange Shares is collectively
referred to as the &ldquo;<U>Merger Consideration</U>&rdquo;). The LLIT Conversion Ratio shall equal the Newegg Per Share Value
divided by the LLIT Per Share Value. The &ldquo;<U>Newegg Per Share Value</U>&rdquo; shall equal $880,000,000 divided by the number
of outstanding Newegg Shares on the date hereof. The &ldquo;<U>LLIT Per Share Value</U>&rdquo; shall equal (i) the volume-weighted
average trading price of LLIT Class A Shares for the consecutive twenty (20) Trading Days immediately prior to and including October
16, 2020, as adjusted for a 1 to 8 reverse stock split effective on the date hereof (the &ldquo;<U>LLIT 20 Day VWAP</U>&rdquo;)
minus (ii) (A) $3,500,000 (the &ldquo;<U>Escrow Amount</U>&rdquo;) divided by (B) the number of LLIT Class A Shares and LLIT Class
B Shares issued and outstanding on the date hereof, after giving effect to such reverse stock split.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The LLIT Conversion Ratio shall be rounded
to four decimal places and shall be appropriately adjusted to reflect the effect of any stock split, split-up, reverse stock split,
stock dividend or distribution of securities convertible into Newegg Shares, LLIT Class A Shares or LLIT Class B Shares, reorganization,
recapitalization, reclassification or other like change with respect to the Newegg Shares, LLIT Class A Shares or LLIT Class B
Shares having a record date occurring on or after the date of this Agreement and prior to the Effective Time; provided, that nothing
in this &lrm;subsection (i) shall be construed to permit any Party to take any action with respect to its securities that is prohibited
by the terms of this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(i)   &nbsp;If
<U>Section 1.6(b)</U> would result in the issuance of any fractional LLIT Exchange Shares, then, notwithstanding <U>Section 1.6(b)</U>,
such fractional LLIT Exchange Share shall not be issued by LLIT and in lieu thereof, LLIT shall pay in cash, without interest,
an amount equal to the amount of such fractional LLIT Exchange Share times the LLIT 20 Day VWAP (the &ldquo;<U>Cash Payment</U>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(ii) All
Newegg Shares, when so exchanged and converted, shall no longer be outstanding and shall automatically be canceled and retired,
and each holder of a certificate representing any such Newegg Shares shall cease to have any rights with respect to Newegg Shares,
and thereafter such certificates shall represent the LLIT Exchange Shares into which such Newegg Shares are converted.</P>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c) Each Newegg Share held by Newegg as
treasury stock or owned by LLIT, Merger Sub or by any wholly-owned direct or indirect Subsidiary of Newegg immediately prior to
the Effective Time (collectively, the &ldquo;<U>Excluded Shares</U>&rdquo;) shall no longer be outstanding and shall automatically
be cancelled and retired without payment or consideration therefor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(d) All options, warrants and other securities
convertible into or exercisable for shares of Newegg capital stock shall either be converted or exercised into Newegg Shares prior
to the Effective Time (and holders thereof shall receive part of the Merger Consideration) or be assumed by LLIT pursuant to <U>Section
1.9</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(e) At the Effective
Time, each LLIT Class A Share issued and outstanding immediately prior to the Effective Time shall remain outstanding. Immediately
following the Effective Time, any LLIT Class A Shares owned by the Surviving Corporation shall automatically be cancelled and retired
without payment or consideration therefor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(f) Through the Support
Agreement, Hangzhou Lianluo has agreed (i) to convert each LLIT Class B Share issued and outstanding immediately prior to the Effective
Time into a LLIT Class A Share pursuant to the terms of the Amended Charter, and (ii) that the warrant contained in Section 4(j)
of the Share Purchase Agreement dated as of April 28, 2016 by and among LLIT and Hangzhou Lianluo shall be a warrant to acquire
from LLIT 125,000 LLIT Class A Shares at a purchase price of $17.60 per share (after giving effect to LLIT&rsquo;s 1 for 8 reverse
stock split), with the number of shares and exercise price both subject to appropriate adjustment for reverse and forward stock
splits, stock dividends, stock combinations and other similar transactions of LLIT Shares that occur after the date hereof. Subject
to the foregoing, immediately following the Effective Time, any LLIT Class B Shares, and any options, warrants or other securities
which are convertible or exchangeable into LLIT Class B Shares shall automatically be cancelled and retired without payment or
consideration therefor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 1.7 <U>Exchange
of Shares</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a) <U>Exchange</U>.
Immediately prior to the Effective Time, LLIT shall designate for exchange, in accordance with this&nbsp;<U>Section 1.7</U>, certificates
representing the LLIT Exchange Shares issuable pursuant to&nbsp;<U>Section 1.6(b)</U>&nbsp;in exchange for outstanding Newegg Shares.
At the Effective Time, LLIT shall cause its transfer agent to deliver the appropriate Merger Consideration and enter in LLIT&rsquo;s
register of members the names of the holders of record of Newegg Shares in exchange for all Newegg Shares that are issued and outstanding
immediately prior to the Effective Time, whether represented by certificates (the &ldquo;<U>Certificates</U>&rdquo;) or not represented
by certificates (the &ldquo;<U>Book-Entry Shares</U>&rdquo;). Notwithstanding anything to the contrary contained in this <U>Section
1.7</U>, LLIT Exchange Shares issued as Merger Consideration can be delivered in book-entry form.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b) <U>Exchange
Procedures.</U><I>&nbsp;</I>As soon as reasonably practical after the Effective Time, LLIT shall mail (or cause to be mailed) to
each holder of record of Newegg Shares: (i) a letter of transmittal (which shall be in such form and have such provisions as LLIT
and Newegg mutually and reasonably specify); and (ii)&nbsp;instructions for use in effecting the surrender of the Certificates
or Book-Entry Shares in exchange for the Merger Consideration. Upon proper surrender of a Certificate or Book-Entry Share for exchange
and cancellation to LLIT or to such agents as may be appointed by LLIT, together with such letter of transmittal, duly executed,
and any other documents as may be reasonably required, the holder of such Newegg Shares shall be entitled to receive in exchange
therefor the LLIT Exchange Shares together with the Cash Payment, if applicable, to which such holder is entitled to under <U>Section
1.6(b)</U>, and the Newegg Shares formerly represented by such Certificate or Book-Entry Shares shall forthwith be canceled. Until
surrendered as contemplated by this&nbsp;<U>Section&nbsp;1.7</U>, (x) each Certificate or Book-Entry Share shall be deemed at any
time after the Effective Time to represent only the right to receive upon such surrender the LLIT Exchange Shares as contemplated
by&nbsp;<U>Section 1.6(b)</U>&nbsp;and (y) a holder of Newegg Shares shall not receive any dividends or distributions in respect
of any such corresponding LLIT Exchange Shares which they may otherwise be entitled to;&nbsp;<U>provided</U>&nbsp;that once the
Newegg Shares are properly surrendered, the holder shall receive, without interest, any dividends or distributions with a record
date after the Closing Date and payable with respect to such LLIT Exchange Shares, if any, they are entitled to receive.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c) <U>Lost Certificates</U>.
If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by LLIT in its reasonable business judgment, the execution of
an indemnity agreement against any claim that may be made against it with respect to such Certificate, LLIT will issue in exchange
for such lost, stolen or destroyed Certificate the LLIT Exchange Shares to which the holders thereof are entitled pursuant to&nbsp;<U>Section&nbsp;1.6(b)</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(d) <U>Form
F-4</U>. LLIT shall issue the LLIT Exchange Shares in exchange for outstanding Newegg Shares as provided in&nbsp;<U>Section 1.6</U>&nbsp;pursuant
to the Merger Registration Statement on the Form F-4 filed under the Securities Act. LLIT and Newegg shall comply with all applicable
provisions of, and rules under, the Securities Act in connection with the offering and issuance of the Merger Consideration, including
the inclusion of the necessary financial statements related to their respective businesses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 1.8 <U>Closing
of Newegg Transfer Books</U>. At the Effective Time, the stock transfer books of Newegg shall be closed, and no transfer of Newegg
Shares shall thereafter be made on the records of Newegg. If, after the Effective Time, Certificates representing Newegg Shares
are presented to the Surviving Corporation or LLIT, such Certificates shall be canceled and exchanged as provided in this&nbsp;<U>Article
I</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 1.9  <U>Assumption
of Newegg Benefit Plans and Awards</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)   &nbsp;Prior
to Closing, LLIT (acting through the LLIT Special Committee) and Newegg (acting through the Newegg Special Committee) will enter
into a Compensation Plan Agreement (the &ldquo;<U>Compensation Plan Agreement</U>&rdquo;), pursuant to which, among other things,
Newegg will, at the Effective Time, transfer to LLIT, and LLIT will assume, sponsorship of all of the Newegg Benefit Plans (as
defined below) and all of Newegg&rsquo;s rights and obligations thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)   &nbsp;At
the Effective Time, pursuant to this Agreement and the Compensation Plan Agreement, Newegg will transfer to LLIT, and LLIT will
assume, its rights and obligations under each stock option to purchase or a right to acquire or vest in, each Newegg Share (the
&ldquo;<U>Awards</U>&rdquo;) issued under the Newegg Benefit Plans or granted by Newegg outside of its Benefit Plans that is outstanding
and unexercised, whether vested or unvested, as of immediately prior to the Effective Time. Each of the Awards shall be converted
into a stock option to purchase or a right to acquire or vest in, respectively, such number of LLIT Class A Shares equal to the
LLIT Conversion Ratio, and, for stock options, the exercise price per LLIT Class A Share shall equal the exercise price per Newegg
Share in effect immediately prior to the Effective Time for the Award divided by the LLIT Conversion Ratio, <I>provided that</I>
such exercise price per share for the applicable LLIT Shares will be at least the per share par value of such LLIT Class A Shares
and <I>provided further</I> that any Awards made during the Interim Period (as hereinafter defined) shall have an exercise price
at least equal to the closing price of the LLIT Class A Shares on the date of grant times the LLIT Conversion Ratio. If the aforementioned
conversion would result in the issuance of a fraction of a LLIT Class A Share, in lieu of issuing such fraction of a LLIT Class
A Share, LLIT shall pay to the holder of the Award an amount in cash equal to the LLIT 20 Day VWAP times the amount of such fraction.
For purposes of this Agreement, &ldquo;<U>Newegg Benefit Plans</U>&rdquo; shall mean, collectively, the Benefit Plans listed on
<U>Schedule 4.19</U> of the Newegg Disclosure Schedules (as hereinafter defined) and any and all subplans, appendices or addendums
thereto, and any and all agreements evidencing Awards.  &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 1.10 <U>Further
Assurances</U>. If at any time after the Effective Time the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments or assurances or any other acts or things are necessary, desirable or proper (a) to vest, perfect or
confirm, of record or otherwise, in the Surviving Corporation its right, title or interest in, to or under any of the rights, privileges,
powers, franchises, properties or assets of either of Merger Sub or Newegg, or (b) otherwise to carry out the purposes of this
Agreement (including cooperating with the filing of future tax returns, as necessary), the Surviving Corporation and its proper
officers and directors or their designees shall be authorized to execute and deliver in the name and on behalf of Merger Sub, and
the individual(s) listed in <U>Schedule 1.10</U>&nbsp;of the Newegg Disclosure Schedules shall be authorized to execute and deliver
in the name and on behalf of Newegg, all such deeds, bills of sale, assignments and assurances and to do, in the name and on behalf
of either Merger Sub or Newegg, all such other acts and things as may be necessary, desirable or proper to vest, perfect or confirm
the Surviving Corporation&rsquo;s right, title or interest in, to or under any of the rights, privileges, powers, franchises, properties
or assets of Merger Sub or Newegg and otherwise to carry out the purposes of this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 1.11 <U>Dissenters
Rights</U>. No stockholder of Newegg who has validly exercised its appraisal rights pursuant to Section 262 of the DGCL (a &ldquo;<U>Dissenting
Stockholder</U>&rdquo;) with respect to its Newegg Shares (such shares, &ldquo;<U>Dissenting Shares</U>&rdquo;) shall be entitled
to receive any portion of the LLIT Exchange Shares with respect to the Dissenting Shares owned by such Dissenting Stockholder unless
and until such Dissenting Stockholder shall have effectively withdrawn or lost its appraisal rights under the DGCL. Each Dissenting
Stockholder shall be entitled to receive only the payment resulting from the procedures set forth in Section 262 of the DGCL with
respect to the Dissenting Shares owned by such Dissenting Stockholder. Newegg shall give LLIT prompt notice of any written demands
for appraisal, attempted withdrawals of such demands, and any other instruments served pursuant to applicable Laws that are received
by Newegg relating to any Dissenting Stockholder&rsquo;s rights of appraisal. Newegg shall direct all negotiations and proceedings
with respect to demand for appraisal under the DGCL. Notwithstanding anything to the contrary contained in this Agreement, for
all purposes of this Agreement, the LLIT Exchange Shares shall be reduced by the portion of the LLIT Exchange Shares that would
otherwise be due to any Dissenting Stockholders pursuant to <U>Section 1.6</U> and <U>Section 1.7</U> attributable to any Dissenting
Shares, and the Dissenting Stockholders shall have no rights to any portion of the LLIT Exchange Shares with respect to any Dissenting
Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 1.12 <U>Escrow</U>.
Within five (5) days after the date of this Agreement, LLIT shall place the Escrow Amount into a U.S. bank account (&ldquo;<U>Escrow
Account</U>&rdquo;) designated by a third party escrow agent to be mutually selected by the Parties (the &ldquo;<U>Escrow Agent</U>&rdquo;)
to be held pursuant to an escrow agreement between the Escrow Agent, LLIT and Newegg in customary form to be reasonably agreed
upon by LLIT and Newegg (the &ldquo;<U>Escrow Agreement</U>&rdquo;). The Escrow Amount shall be held and distributed by the Escrow
Agent in accordance with the terms of the Escrow Agreement<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP></SUP></FONT>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">ARTICLE II<BR>
<BR>
CLOSING<BR>
<BR></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 2.1    &nbsp;<U>Closing</U>.
Unless this Agreement has been terminated pursuant to <U>Article VI</U> below, the closing of the transactions contemplated by
this Agreement (the &ldquo;<U>Closing</U>&rdquo;) and all actions specified in this Agreement to occur at the Closing shall take
place at the offices of Hunter Taubman Fischer &amp; Li LLC, 800 Third Avenue, Suite 2800, New York, NY 10022, no later than the
second Business Day after all the closing conditions to this Agreement have been satisfied or waived at 10:00 a.m. local time,
or at such other date, time or place as the LLIT (acting through the LLIT Special Committee) and Newegg (acting through the Newegg
Special Committee) may agree (the date and time at which the Closing is actually held being, the &ldquo;<U>Closing Date</U>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">ARTICLE III<BR>
<BR>
REPRESENTATIONS AND WARRANTIES OF LLIT AND MERGER SUB</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Except as set forth
in the disclosure schedules delivered by LLIT and Merger Sub to Newegg on the date hereof (the &ldquo;<U>LLIT Disclosure Schedules</U>&rdquo;),
the Section numbers of which are numbered to correspond to the Section numbers of this Agreement to which they refer, each of LLIT,
LLIT&rsquo;s direct and indirect Subsidiaries (each of the foregoing, a &ldquo;<U>LLIT Subsidiary</U>&rdquo; and collectively,
the &ldquo;<U>LLIT Subsidiaries</U>&rdquo;) and Merger Sub, on a joint and several basis, represents and warrants to Newegg, as
follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 3.1    <U>Due
Incorporation and Good Standing</U>. LLIT is a business company duly incorporated, validly existing under the Laws of the British
Virgin Islands. There are no proceedings pending to dissolve LLIT, and LLIT has taken no action seeking dissolution of LLIT. LLIT
has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being
conducted. Each LLIT Subsidiary, including Merger Sub, is a corporation or other entity duly formed, validly existing and in good
standing under the Laws of its jurisdiction of organization and has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being conducted. Each of LLIT and the LLIT Subsidiaries (each, a &ldquo;<U>LLIT
Entity</U>&rdquo; and collectively, the &ldquo;<U>LLIT Entities</U>&rdquo;) is duly qualified or licensed and in good standing
to conduct business in each jurisdiction in which it is incorporated or registered and in each other jurisdiction where it does
business or operates to the extent that the character of the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except for any deviations from any of the foregoing that would
not reasonably be expected to have a Material Adverse Effect on LLIT.&nbsp;<U>Schedule 3.1</U>&nbsp;lists all jurisdictions in
which each LLIT Entity is organized and qualified to conduct business and all names other than its legal name under which any LLIT
Entity does business. LLIT has made available to Newegg accurate and complete copies of Organizational Documents of each of the
LLIT Entities, each as amended to date and as currently in effect. No LLIT Entity is in material violation of any provision of
its Organizational Documents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 3.2    <U>Authorization;
Binding Agreement</U>. LLIT and Merger Sub have all requisite corporate power and authority to execute and deliver this Agreement
and each ancillary document to which it is or is required to be a party, to perform LLIT&rsquo;s and Merger Sub&rsquo;s obligations,
and to consummate the transactions contemplated hereby and thereby (such agreements, each, an &ldquo;<U>Ancillary Document</U>&rdquo;,
collectively &ldquo;<U>Ancillary Documents</U>&rdquo;). The execution and delivery of this Agreement and each Ancillary Document
to which it is or is required to be a party and the consummation of the transactions contemplated hereby and thereby have been
duly and validly authorized by the board of directors of LLIT and Merger Sub. No other corporate proceedings on the part of LLIT
or Merger Sub are necessary to authorize the execution and delivery of this Agreement and each Ancillary Document to which it is
a party. No other corporate proceedings on the part of LLIT or Merger Sub are necessary to consummate the transactions contemplated
hereby and thereby, except for obtaining the Required Shareholder Vote. This Agreement has been, and each Ancillary Document to
which LLIT or Merger Sub is or is required to be a party shall be when delivered, duly and validly executed and delivered by LLIT
and Merger Sub, as applicable, and, assuming the due authorization, execution and delivery of this Agreement and such Ancillary
Documents by the other parties hereto and thereto, constitutes, or when delivered shall constitute, the legal, valid and binding
obligation of each LLIT Entity, enforceable against each LLIT Entity in accordance with its terms, except to the extent that enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization and moratorium laws and other laws of general application
affecting the enforcement of creditors&rsquo; rights generally or by any applicable statute of limitation or by any valid defense
of set-off or counterclaim, and the fact that equitable remedies or relief (including the remedy of specific performance) are subject
to the discretion of the court from which such relief may be sought (collectively, the &ldquo;<U>Enforceability Exceptions</U>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 3.3 <U>Governmental Approvals</U>.
No Consent of or with any Governmental Authority, on the part of any LLIT Entity is required to be obtained or made in connection
with the execution, delivery or performance by any LLIT Entity of this Agreement and each Ancillary Document to which it is a
party or the consummation by any LLIT Entity of the transactions contemplated hereby and thereby, other than (a) such filings
as may be required in the British Virgin Islands to effect the amendment of the Memorandum and Articles of Association of LLIT
(including but not limited to changes to the share capital of LLIT), (b) such filings as may be required in any jurisdiction where
such LLIT Entity is qualified or authorized to conduct business as a foreign corporation in order to maintain such qualification
or authorization, (c) such filings as contemplated by this Agreement, (d) any filings required with the NASDAQ Capital Market
(&ldquo;<U>NASDAQ</U>&rdquo;) with respect to the transactions contemplated by this Agreement, (e) applicable requirements, if
any, of the Securities Act, the Securities Exchange Act of 1934, as amended (the &ldquo;<U>Exchange Act</U>&rdquo;), and/or any
state &ldquo;blue sky&rdquo; securities Laws, and the rules and regulations thereunder, and (f) where the failure to obtain or
make such Consents or to make such filings or notifications, would not reasonably be expected to have a Material Adverse Effect
on LLIT as a whole or any LLIT Entity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 3.4    <U>Non-Contravention</U>.
The execution and delivery by LLIT or Merger Sub of this Agreement and each Ancillary Document to which it is a party or otherwise
bound, the consummation by any LLIT Entity of the transactions contemplated hereby and thereby, and compliance by any LLIT Entity
with any of the provisions hereof and thereof, will not (a) conflict with or violate any provision of any LLIT Entity&rsquo;s Organizational
Documents, (b)&nbsp;subject to obtaining the Consents from Governmental Authorities referred to in&nbsp;<U>Section 3.3</U>&nbsp;hereof
and any condition precedent to such Consent or waiver having been satisfied, conflict with or violate any Law, Order or Consent
applicable to any LLIT Entity or any of its properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii)
constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result
in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the performance required by any LLIT
Entity under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or
provide compensation under, (vii) result in the creation of any Lien upon any of the properties or assets of any LLIT Entity under,
(viii) give rise to any obligation to obtain any third party consent or provide any notice to any Person or (ix) give any Person
the right to declare a default, exercise any remedy, claim a rebate, chargeback, penalty or change in delivery schedule, accelerate
the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under any of the terms, conditions
or provisions of any LLIT Material Contract to which any LLIT Entity is a party or its properties or assets are otherwise bound,
except for any deviations from any of the foregoing clauses (b) or (c) that would not reasonably be expected to have a Material
Adverse Effect on LLIT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Section 3.5    <U>Capitalization</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)   &nbsp;
LLIT is authorized to issue (i) 6,250,000 common shares, divided into (i) 4,736,111 LLIT Class A Shares and (ii) 1,513,889 LLIT
Class B Shares, each with a par value of $0.021848 (collectively, the &ldquo;<U>LLIT Shares</U>&rdquo;). The issued and outstanding
LLIT Shares as of the date of this Agreement are set forth on&nbsp;<U>Schedule 3.5(a)</U>. All outstanding LLIT Shares are duly
authorized, validly issued, fully paid and non-assessable and not subject to or issued in violation of any purchase option, right
of first refusal, preemptive right, subscription right or any similar right under any provision of the BVI Act, LLIT Memorandum
and Articles of Association, as amended from time to time, or any Contract to which LLIT is a party or by which it or its securities
are bound or, to the Knowledge of LLIT, any other Contract. LLIT holds no shares or other equity interests in or of LLIT in its
treasury. None of the outstanding LLIT Shares have been issued in violation of any applicable securities Laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)   &nbsp;
Except as set forth in <U>Schedule 3.5(b)</U>, LLIT does not have any Subsidiaries, control any variable interest entity (&ldquo;<U>VIE</U>&rdquo;)
or own any equity interests in any other Person. All of the outstanding equity securities of each Subsidiary of LLIT are duly authorized
and validly issued, paid in accordance with the applicable Laws and non-assessable (if applicable), and were offered, sold and
delivered in compliance with all applicable securities Laws, and owned by LLIT or one of its Subsidiaries free and clear of all
Liens (other than those, if any, imposed by such Subsidiary&rsquo;s Organizational Documents, which are set forth in <U>Schedule
3.5(b)</U>). There are no Contracts to which LLIT or any of its Affiliates is a party or bound with respect to the voting (including
voting trusts or proxies) of the shares or other equity interests of any Subsidiary of LLIT other than the Organizational Documents
of any such Subsidiary. There are no outstanding equity appreciation, phantom equity, profit participation or similar rights granted
by any LLIT Entity. Except for the limitations and restrictions imposed under applicable PRC Law regarding LLIT Subsidiaries incorporated
in PRC, no LLIT Entity has any limitation on its ability to make any distributions or dividends to its equity holders, whether
by Contract, Order or applicable Law. LLIT does not own or have any rights to acquire, directly or indirectly, any shares or other
equity interests of any Person (other than any LLIT Subsidiary and 652,174 shares of common stock, par value $0.001 per share,
of Guardion Health Sciences, Inc., a Delaware company (&ldquo;<U>Guardion Shares</U>&rdquo;)). None of LLIT or its Subsidiaries
is a participant in any joint venture, partnership or similar arrangement. Except as set forth in <U>Schedule 3.5(b)</U>, there
are no outstanding material contractual obligations of LLIT or its Subsidiaries to provide funds to, or make any investment (in
the form of a loan, capital contribution or otherwise) in, any other Person (other than loans to customers in the ordinary course
of business).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c) &nbsp; Except as set forth in <U>Schedule 3.5(c)</U>, there
are no (i) outstanding options, warrants, puts, calls, convertible securities, preemptive or similar rights, (ii) bonds, debentures,
notes or other Indebtedness having general voting rights or that are convertible or exchangeable into securities having such rights
or (iii) subscriptions or other rights, agreements, arrangements, Contracts or commitments of any character (A) relating to the
issued or unissued shares, warrants, options, capital stock or equity interests of LLIT or any LLIT Subsidiary, or (B) obligating
LLIT or any LLIT Subsidiary to issue, transfer, deliver, repurchase or sell or cause to be issued, transferred, delivered, sold
or repurchased such shares, stock or equity, or any options or shares or securities convertible into or exchangeable for such
shares, stock or equity, or (C) obligating LLIT or any LLIT Subsidiary to grant, extend or enter into any such option, warrant,
call, subscription or other right, agreement, arrangement or commitment for such shares, stock or equity. Except as set forth
in <U>Schedule 3.5(c)</U>, there are no outstanding obligations of LLIT to repurchase, redeem or otherwise acquire any shares,
stock or equity of LLIT or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise)
in any Person. Except as set forth in <U>Schedule 3.5(c)</U>, there are no shareholders agreements, voting trusts or other agreements
or understandings to which any LLIT Entity is a party, or which is otherwise within the Knowledge of LLIT, with respect to the
voting of any shares of any LLIT Entity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(d)   &nbsp;
All Indebtedness of LLIT (including each LLIT Subsidiary) is disclosed in <U>Schedule 3.5(d)</U>, except for such Indebtedness
which does not cumulatively exceed $50,000. No Indebtedness of LLIT contains any restriction upon: (i) the prepayment of any of
such Indebtedness, (ii) the incurrence of Indebtedness by LLIT or any LLIT Subsidiary or (iii) the ability of LLIT or any LLIT
Subsidiary to grant any Lien on its properties or assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(e)   &nbsp;
Except as disclosed in the SEC Reports, LLIT has not declared or paid any distribution or dividend in respect of its shares and
has not repurchased, redeemed or otherwise acquired any of its shares, and the LLIT Board has not authorized any of the foregoing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Section 3.6    <U>SEC
Filings and LLIT Financials</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)   &nbsp;
LLIT has filed all forms, reports, schedules, statements, registrations statements, prospectuses and other documents required to
be filed or furnished by LLIT with the SEC under the Securities Act and/or the Exchange Act, together with any amendments, restatements
or supplements thereto from the beginning of the three most recent fiscal years up to the date hereof, except for any deviations
from any of the foregoing that would not reasonably be expected to have a Material Adverse Effect on LLIT. Except to the extent
available on the SEC&rsquo;s web site through EDGAR, LLIT has delivered to Newegg copies in the form filed with the SEC of all
of the following: (i) LLIT&rsquo;s Annual Reports on Form 20-F or on Form 10-K for each fiscal year of LLIT beginning with the
year ended December 31, 2017, (ii) all other forms, reports, registration statements, prospectuses and other documents (other than
preliminary materials) filed by LLIT with the SEC since the beginning of the first fiscal year referred to in clause (i)&nbsp;above
(the forms, reports, registration statements, prospectuses and other documents referred to in clauses (i) and (ii) above, whether
or not available through EDGAR, are, collectively, the &ldquo;<U>SEC Reports</U>&rdquo;) and (iii) all certifications and statements
required by (A) Rules 13a-14 or 15d-14 under the Exchange Act, and (B) 18 U.S.C. &sect;1350 (Section 906 of SOX) with respect to
any report referred to in clause (i) above (collectively, the &ldquo;<U>Public Certifications</U>&rdquo;). The SEC Reports were
prepared in all material respects in accordance with the requirements of the Securities Act and the Exchange Act, as the case may
be, and the rules and regulations thereunder and did not, as of their respective effective dates (in the case of SEC Reports that
are registration statements filed pursuant to the requirements of the Securities Act) and at the time they were filed with the
SEC (in the case of all other SEC Reports) contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they
were made, not misleading. LLIT, as of the date of this Agreement, is not aware of any filed SEC Report that contains any untrue
statement of a material fact or omits to state a material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were made, not misleading. The Public Certifications
are each true as of their respective dates of filing. As used in this&nbsp;<U>Section 3.6</U>, the term &ldquo;file&rdquo; shall
be broadly construed to include any manner permitted by SEC rules and regulations in which a document or information is furnished,
supplied or otherwise made available to the SEC. As of the date of this Agreement, (A) the LLIT Class A Shares are listed on NASDAQ,
(B) LLIT has not received any effective written deficiency notice from NASDAQ relating to the continued listing requirements of
LLIT Shares, (C) there are no Actions pending or, to the Knowledge of LLIT, threatened against LLIT with respect to any intention
by such entity to suspend, prohibit or terminate the quoting of the LLIT Class A Shares on NASDAQ and (D) the LLIT Class A Shares
are in compliance with all of the applicable listing and corporate governance rules of NASDAQ, except in the case of clauses (B),
(C) and (D), as set forth in <U>Schedule 3.6(a)</U>.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)   &nbsp;
The financial statements and notes contained or incorporated by reference in the SEC Reports, as well as the consolidated and unconsolidated
financial statement of LLIT as of and for the six months ended June 30, 2020, fairly present in all material respects the financial
position and the results of operations, changes in shareholders&rsquo; equity and cash flows of LLIT at the respective dates of
and for the periods referred to in such financial statements, all in accordance with (i) GAAP methodologies applied on a consistent
basis throughout the periods involved and (ii) Regulation S-X or Regulation S-K, as applicable (except as may be indicated in the
notes thereto and for the omission of notes and audit adjustments in the case of unaudited financial statements to the extent permitted
by Regulation S-X or Regulation S-K, as applicable). LLIT has provided Newegg with a true and complete copy of the financial statements
and notes contained or incorporated by reference in the SEC Reports, as well as the consolidated and unconsolidated financial statement
of LLIT as of and for the six months ended June 30, 2020 (the &ldquo;<U>LLIT Financials</U>&rdquo;) and the unaudited and unreviewed
financial statements for the eight months ended August 31, 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c)   &nbsp;
Except as and to the extent reflected or reserved against in the LLIT Financials, LLIT has not incurred any Liabilities or obligations
of the type required to be reflected on a balance sheet in accordance with GAAP that is not adequately reflected or reserved on
or provided for in the LLIT Financials.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(d)   &nbsp;
As of the date hereof, LLIT (exclusive of any LLIT Subsidiary) has an unrestricted cash balance of immediately available funds
of not less than $5,000,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 3.7    <U>Absence
of Certain Changes</U>. Since&nbsp;December 31, 2019, other than as disclosed in the SEC Reports filed since December 31, 2019,
LLIT and each LLIT Subsidiary has (a) conducted its business only in the ordinary course of business consistent with past practice,
(b) not been subject to a Material Adverse Effect, other than as stated in <U>Schedule 3.7</U> and (c) has not taken any action
or committed or agreed to take any action that would be prohibited by&nbsp;<U>Section 5.3</U>&nbsp;if such action were taken on
or after the date hereof without the consent of Newegg.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 3.8    <U>Compliance
with Laws</U>. Except as disclosed in <U>Schedule 3.8</U>, LLIT and each LLIT Subsidiary is, and has since its respective date
of formation been, in compliance with all Laws applicable to it by which it or any of its properties, assets, employees, business
or operations are or were bound or affected except for such noncompliance which would not reasonably be expected to have a Material
Adverse Effect on LLIT or any LLIT Subsidiary, and no LLIT Entity has received written notice alleging any violation of applicable
Law in any material respect by LLIT or any LLIT Subsidiary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 3.9    <U>Actions;
Orders; Permits</U>. Except as set forth in <U>Schedule 3.9</U>, there is no (a) Action of any nature pending or, to LLIT&rsquo;s
Knowledge, threatened, nor is there any reasonable basis for any Action to be made, or (b) Order pending now or rendered by a Governmental
Authority, in either case of (a) or (b) by or against LLIT or any LLIT Subsidiary, its current or former directors, officers or
equity holders, which would reasonably be expected to have a Material Adverse Effect on LLIT or LLIT Subsidiaries. None of the
current or former officers, senior management or directors of LLIT or any LLIT Subsidiary have been charged with, indicted for,
arrested for, or convicted of any felony or any crime involving fraud. Each LLIT Entity holds all Permits necessary to lawfully
conduct its business as presently conducted, and to own, lease and operate its assets and properties, all of which are in full
force and effect, except where the failure to hold such Permit or for such Permit to be in full force and effect would not reasonably
be expected to have a Material Adverse Effect on LLIT or any LLIT Subsidiary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 3.10 <U>Taxes and Returns</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)   &nbsp;
Each LLIT Entity has or will have timely filed, or caused to be timely filed, all Tax Returns by it, which Tax Returns are true,
accurate, correct and complete, and has paid, collected or withheld, or caused to be paid, collected or withheld, all Taxes required
to be paid, collected or withheld, other than such Taxes for which adequate reserves in the LLIT Financials have been established
in accordance with GAAP.&nbsp;<U>Schedule 3.10(a)</U>&nbsp;sets forth each jurisdiction where any LLIT Entity files or is required
to file a Tax Return. Each LLIT Entity has complied in all material respects with all applicable Laws relating to Tax. There is
no current pending or, to the Knowledge of a LLIT Entity, threatened Action against such LLIT Entity by a Governmental Authority
in a jurisdiction where such LLIT Entity does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.
There are no audits, examinations, investigations or other proceedings pending, or to the Knowledge of LLIT, threatened Action,
against any LLIT Entity in respect of any Tax, no LLIT Entity has been notified in writing of any proposed Tax claims or assessments
against any LLIT Entity (other than, in each case, claims or assessments for which adequate reserves in the LLIT Financials have
been established in accordance with GAAP or are immaterial in amount). There are no Liens with respect to any Taxes upon any LLIT
Entity&rsquo;s assets, other than Permitted Liens. Each LLIT Entity has collected or withheld all Taxes currently required to be
collected or withheld by it, and all such Taxes have been paid to the appropriate Governmental Authorities or set aside in appropriate
accounts for future payment when due. No LLIT Entity has outstanding waivers or extensions of any applicable statute of limitations
to assess any material amount of Taxes. There are no outstanding requests by any LLIT Entity for any extension of time within which
to file any Tax Return or within which to pay any Taxes shown to be due on any Tax Return.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)   &nbsp;
Since the beginning of the three most recent fiscal years, no LLIT Entity has (i) changed any Tax accounting methods, policies
or procedures except as required by a change in Law or permitted by applicable accounting principles, (ii) made, revoked, or amended
any material Tax election, (iii) filed any amended Tax Returns or claim for refund or (iv) entered into any closing agreement affecting
or otherwise settled or compromised any material Tax Liability or refund.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c)   &nbsp;
No LLIT Entity has any Liability for the Taxes of another Person (other than another LLIT Entity) (i) under any applicable Tax
Law, (ii) as a transferee or successor, or (iii) by contract, indemnity or otherwise. No LLIT Entity is a party to or bound by
any Tax indemnity agreement, Tax sharing agreement or Tax allocation agreement or similar agreement, arrangement or practice with
respect to Taxes (including any advance pricing agreement, closing agreement or other agreement relating to Taxes with any Governmental
Authority) that will be binding on LLIT or any LLIT Subsidiary with respect to any period following the Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(d)   &nbsp;No
LLIT Entity has requested, or is the subject of or bound by any private letter ruling, technical advice memorandum, closing agreement
or similar ruling, memorandum or agreement with any Governmental Authority with respect to any Taxes, nor is any such request outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 3.11
&nbsp;<U>Employees and Employee Benefit Plans</U>. Except as set forth in the SEC Reports, no LLIT Entity maintains, or has any
liability under, any employee benefit plans. The consummation of the transactions contemplated by this Agreement and the Ancillary
Documents will not: (i) entitle any individual to severance pay, unemployment compensation or other benefits or compensation; or
(ii) accelerate the time of payment or vesting, or increase the amount of any compensation due, or in respect of, any individual.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Section 3.12   &nbsp;<U>Properties</U>.
Except as set forth in the SEC Reports, no LLIT Entity owns, licenses or otherwise has any right, title or interest in any material
Intellectual Property. Except as set forth in the SEC Reports, no LLIT Entity owns or leases any material real property or Personal
Property. Each LLIT Entity has good and marketable title to, or a valid leasehold interest in or right to use, all of its assets,
free and clear of all Liens other than (a) Permitted Liens, (b) the rights of lessors under leasehold interests and (c) Liens specifically
identified in the LLIT Financials. The assets (including Intellectual Property rights and contractual rights) of LLIT Entities
constitute all of the assets, rights and properties that are used in the operation of the businesses of the LLIT Entities as it
is now conducted and presently proposed to be conducted, and taken together, are adequate and sufficient for the operation of the
businesses of the LLIT Entities as currently conducted and as presently proposed to be conducted.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 3.13
&nbsp;<U>Material Contracts</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)   &nbsp;
Except as set forth in the SEC Reports, this Agreement or the Ancillary Documents, there are no Contracts to which LLIT or any
other LLIT Entity is a party or by which any of its properties or assets may be bound, subject or affected, which (i) creates or
imposes a Liability greater than $250,000, (ii) may not be cancelled by any LLIT Entity on less than sixty (60) days&rsquo; prior
notice without payment of a material penalty or termination fee, (iii) prohibits, prevents, restricts or impairs in any material
respect any business practice of any LLIT Entity as its business as is currently conducted, any acquisition of material property
by LLIT Entity, or restricts in any material respect the ability of any LLIT Entity from engaging in business as currently conducted
by it or from competing with any other Person, (iv) relates to the purchase, sale or otherwise relates to any LLIT Shares, LLIT
equity interests, or options, warrants or any other Contract which is convertible therefor, or (v) is otherwise material to any
LLIT Entity and not described in clauses (i) through (iv) above (each, a &ldquo;<U>LLIT Material Contract</U>&rdquo;). All LLIT
Material Contracts have been made available to Newegg other than those that are exhibits to the SEC Reports.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)   &nbsp;
With respect to each LLIT Material Contract: (i) the LLIT Material Contract was entered into at arms&rsquo; length; (ii) the LLIT
Material Contract is legal, valid, binding and enforceable in all material respects against the respective LLIT Entity and, to
the Knowledge of LLIT, the other parties thereto, and is in full force and effect (except as such enforcement may be limited by
the Enforceability Exceptions); (iii) each LLIT Entity is not in breach or default in any material respect, and no event has occurred
that with the passage of time or giving of notice or both would constitute such a breach or default in any material respect by
the respective LLIT Entity, or permit termination or acceleration by the other party, under such LLIT Material Contract; (iv) to
the Knowledge of LLIT, no other party to any LLIT Material Contract is in breach or default in any material respect, and no event
has occurred that with the passage of time or giving of notice or both would constitute such a breach or default by such other
party, or permit termination or acceleration by the respective LLIT Entity under any LLIT Material Contract; (v) neither the execution
of this Agreement nor the consummation of the transactions contemplated by this Agreement will affect the validity or enforceability
of any LLIT Material Contract; (vi) no LLIT Entity has received written notice of an intention by any party to any such LLIT Material
Contract that provides for a continuing obligation by any party thereto to terminate such LLIT Material Contract or amend the terms
thereof, other than modifications in the ordinary course of business that do not materially adversely affect any LLIT Entity; and
(vii) no LLIT Entity has waived any rights under any such LLIT Material Contract.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 3.14   <U>Transactions
with Affiliates</U>. <U>Schedule 3.14</U> sets forth the Contracts and arrangements that are in existence as of the date of this
Agreement under which there are any existing or future Liabilities or obligations between LLIT or any other LLIT Entity and any
(a) present or former director, officer or employee or Affiliate of any LLIT Entity, or any family member of any of the foregoing,
or (b) record or beneficial owner of more than ten percent (10%) of the outstanding LLIT Shares as of the date hereof. Except as
set forth in in <U>Schedule 3.14</U>, no LLIT Entity nor any of its Affiliates, nor any officer, director, manager, employee, trustee
or beneficiary of a LLIT Entity or any of its Affiliates, nor any immediate family member of any of the foregoing (whether directly
or indirectly through an Affiliate of such Person) (each of the foregoing with respect to an applicable party, a &ldquo;<U>Related
Person</U>&rdquo;) is presently a party to any transaction with a LLIT Entity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 3.15
&nbsp;<U>Investment Company Act</U>. LLIT is not an &ldquo;investment company&rdquo; or a Person directly or indirectly &ldquo;controlled&rdquo;
by or acting on behalf of an &ldquo;investment company&rdquo;, in each case within the meaning of the Investment Company Act of
1940, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 3.16
&nbsp;<U>Finders and Brokers</U>. Except as contemplated by the Agreement, no broker, finder or investment banker is entitled to
any brokerage, finder&rsquo;s or other fee or commission from LLIT, any LLIT Subsidiary, or any of their respective Affiliates
in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of LLIT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 3.17   <U>Ownership
of LLIT Exchange Shares</U>. All the LLIT Exchange Shares issued and delivered in accordance with&nbsp;<U>Article I</U>&nbsp; shall
be, upon issuance and delivery of such LLIT Exchange Shares, duly authorized, validly issued, fully paid and non-assessable, free
and clear of all Liens, other than restrictions arising from applicable securities Laws, the Lock-Up Agreement, Newegg&rsquo;s
stockholder agreement (which will be assigned to LLIT) and any Liens incurred by Newegg&rsquo;s stockholders, and the issuance and delivery of such LLIT Exchange Shares pursuant hereto will not be subject to or give rise to any preemptive rights or
rights of first refusal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Section 3.18   &nbsp;<U>Certain
Business Practices</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)   &nbsp;
Neither LLIT, nor any LLIT Subsidiary, nor, to the Knowledge of LLIT, any of their Representatives acting on their behalf, has
(i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity,
(ii) made any unlawful payment to foreign or domestic government officials or employees, to foreign or domestic political parties
or campaigns or violated any provision of the Foreign Corrupt Practices Act of 1977, (iii) made any other unlawful payment or (iv)
since April 1, 2017, directly or indirectly, given or agreed to give any gift or similar benefit in any material amount to any
customer, supplier, governmental employee or other Person who is or may be in a position to help or hinder LLIT or any LLIT Subsidiary
or assist it in connection with any actual or proposed transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)   &nbsp;
The operations of LLIT (including all LLIT Subsidiaries) are and have been conducted at all times in compliance with laundering
statutes in all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any Governmental Authority, and no Action involving LLIT or any LLIT Subsidiary
with respect to the any of the foregoing is pending or, to the Knowledge of LLIT, threatened.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c)   &nbsp;
No LLIT Entity or any of its directors or officers, or, to the Knowledge of LLIT, any other Representative acting on behalf of
any LLIT Entity, is currently identified on the specially designated nationals or other blocked person list or otherwise currently
subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (&ldquo;<U>OFAC</U>&rdquo;),
and no LLIT Entity has, directly or, to the Knowledge of LLIT, indirectly, used any funds, or loaned, contributed or otherwise
made available such funds to any Subsidiary, joint venture partner or other Person, in connection with any sales or operations
in Cuba, Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC or for the purpose of financing the activities of
any Person currently subject to, or otherwise in violation of, any U.S. sanctions administered by OFAC in the last five (5) fiscal
years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 3.19 &nbsp; <U>New
Subsidiaries</U>. Merger Sub was formed on or about September 23, 2020 solely for the purpose of the transactions contemplated
herein. Merger Sub has had no operations or activities prior to the date hereof, other than those activities which are customary
organizational and formation activities. Merger Sub has no assets, liabilities or employees and is not a party to any Contract
except for the Contract under which LLIT acquired the Merger Sub Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 3.20 <U>LLIT
After Disposition</U>. Except as set forth in <U>Schedule 3.20</U>, immediately following the closing of the Disposition, LLIT
and its then current Subsidiaries shall (i) have no assets, Indebtedness, Permits, employees or Liabilities, and (ii) not be a
party to, nor will any of their properties or assets be bound, subject to or affected by, any Contract, Order or Action, other
than in each case those which are held by Newegg as of immediately prior to the Closing, shares of Merger Sub, Guardion Shares
and cash.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 3.21 <U>Disclosure</U>.
No representations or warranties by LLIT (including LLIT Subsidiaries) in this Agreement (including the disclosure schedules hereto)
or the Ancillary Documents, and none of the information supplied or to be supplied by LLIT (including any LLIT Subsidiary) in connection
with the transactions contemplated by this Agreement (a) contains or will contain any untrue statement of a material fact, or (b)
omits or will omit to state, when read in conjunction with all of the information contained in this Agreement, the disclosure schedules
hereto and the Ancillary Documents, any fact necessary to make the statements or facts contained therein not materially misleading.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 3.22   <U>Independent
Investigation</U>. LLIT has conducted its own independent investigation, review and analysis of the business, results of operations,
prospects, condition (financial or otherwise) or assets of Newegg and Newegg Subsidiaries, and acknowledges that it has been provided
adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of Newegg and Newegg
Subsidiaries for such purpose. LLIT acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to
consummate the transactions contemplated hereby, it has relied solely upon its own investigation and the express representations
and warranties of Newegg set forth in&nbsp;<U>Article IV</U>&nbsp;and the covenants set forth in <U>Article V</U> (including the
related portions of Newegg Disclosure Schedules); and (b) none of Newegg or its respective Representatives have made any representation
or warranty as to Newegg or any of Newegg&rsquo;s Subsidiaries or this Agreement, except as expressly set forth in&nbsp;<U>Article
IV</U> (including the related portions of the Newegg Disclosure Schedules).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 3.23 <U>No
Disagreement with Accountants</U>. LLIT does not have any disagreements with their accountants on any matters related to the LLIT
Financials.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 3.24 <U>LLIT
Board and Special Committee.</U> The LLIT Board has formed a special committee (the &ldquo;<U>LLIT Special Committee</U>&rdquo;)
comprised solely of disinterested Directors. The LLIT Special Committee, with the advice and assistance of independent legal counsel,
has recommended (subject to the satisfaction of the conditions precedent set forth herein) that the LLIT Board approve this Agreement
and the Merger and all other transactions contemplated hereby. The LLIT Board and the LLIT Special Committee have unanimously recommended
that the LLIT shareholders approve all proposals presented at the Shareholders Meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 3.25 <U>SEC
Filings.</U> All information contained in any of the Registration Statements, other than the Newegg Information (the &ldquo;<U>LLIT
Information</U>&rdquo;), will, at the time such Registration Statement is filed with the SEC, when it becomes effective under the
Securities Act, on the date it is mailed to LLIT shareholders and at the time of the Shareholder Meeting, not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statement
therein, in light of the circumstances under which they were made, not misleading. If at any time prior to the Effective Time any
event with respect to LLIT or any LLIT Subsidiaries, or with respect to other LLIT Information shall occur, or if Newegg informs
LLIT of any such event with respect to Newegg, any Newegg Subsidiary or any other Newegg Information, that is required to be described
in an amendment of, or a supplement to, the Registration Statements, LLIT shall cause such event to be so described and such amendment
or supplement shall be promptly filed with the SEC and, as required by Law, disseminated to the LLIT shareholders. No representations
or warranties are made by LLIT with respect to the Newegg Information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">ARTICLE IV<BR>
<BR>
REPRESENTATIONS AND WARRANTIES OF NEWEGG</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Except as set forth
in the disclosure schedules delivered by Newegg to LLIT on the date hereof (the &ldquo;<U>Newegg Disclosure Schedules</U>&rdquo;),
the Section numbers of which are numbered to correspond to the Section numbers of this Agreement to which they refer, each of Newegg
and the Newegg Subsidiaries, on a joint and several basis, represents and warrants to LLIT, as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;<B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.1    <U>Due
Organization and Good Standing</U>. Newegg is a corporation duly organized, validly existing and in good standing under the Laws
of the Delaware and has all requisite power and authority to own, lease and operate its properties and to carry on its business
as now being conducted. Each Subsidiary of Newegg is a corporation or other entity duly formed, validly existing and in good standing
under the Laws of its jurisdiction of organization and has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted. Each Newegg Subsidiary is duly qualified or licensed and in
good standing in the jurisdiction in which it is incorporated or registered and in each other jurisdiction where it does business
or operates to the extent that the character of the property owned, or leased or operated by it or the nature of the business conducted
by it makes such qualification or licensing necessary, except for any deviations from any of the foregoing that would not reasonably
be expected to have a Material Adverse Effect on Newegg.&nbsp;<U>Schedule 4.1</U>&nbsp;lists all jurisdictions in which any Newegg
Subsidiary is organized and qualified to conduct business and all names other than its legal name under which any Newegg Subsidiary
does business. Newegg has provided to LLIT accurate and complete copies of its Organizational Documents and the Organizational
Documents of each of its Subsidiaries, each as amended to date and as currently in effect. No Newegg Subsidiary is in material
violation of any provision of its Organizational Documents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.2    <U>Authorization;
Binding Agreement</U>. Newegg has all requisite corporate power and authority to execute and deliver this Agreement and each Ancillary
Document to which it is or is required to be a party, to perform Newegg&rsquo;s obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and each Ancillary Document to which
Newegg is or is required to be a party and the consummation of the transactions contemplated hereby and thereby, (a) have been
duly and validly authorized by Newegg&rsquo;s board of directors to the extent required by Newegg&rsquo;s Organizational Documents,
any other applicable Law or any Contract to which Newegg or, to the Knowledge of Newegg, any of its shareholders is a party or
by which it or its securities are bound and (b) no other proceedings on the part of Newegg are necessary to authorize the execution
and delivery of this Agreement and each Ancillary Document to which it is a party or to consummate the transactions contemplated
hereby and thereby. This Agreement has been, and each Ancillary Document to which Newegg is or is required to be a party shall
be when delivered, duly and validly executed and delivered by Newegg and assuming the due authorization, execution and delivery
of this Agreement and any such Ancillary Document by the other parties hereto and thereto, constitutes, or when delivered shall
constitute, the legal, valid and binding obligation of Newegg, enforceable against Newegg in accordance with its terms, subject
to the Enforceability Exceptions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.3    <U>Capitalization</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)   &nbsp;
Newegg is authorized to issue 142,000,000 Newegg Class A Shares, 849,159 shares of which are issued and outstanding; 59,000,000
Newegg Class B Shares, 0 shares of which are issued and outstanding; 25,889,968 Newegg Series AA Preferred Shares, 24,870,027 shares
of which are issued and outstanding; and 59,000,000 Newegg Series A Preferred Shares, 36,475,987 shares of which are issued and
outstanding. Newegg Shares to be delivered by the stockholders of Newegg to LLIT at the Closing constitute all of the issued and
outstanding shares and other equity interests in or of Newegg. All of the outstanding shares and other equity interests in or of
Newegg have been duly authorized, are fully paid and non-assessable and not in violation of any purchase option, right of first
refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, any other applicable Law, Newegg
Charter or any Contract to which Newegg is a party or by which it or its securities are bound. Newegg holds no shares or other
equity interests in or of Newegg in its treasury. None of the outstanding shares or other equity interests in or of Newegg were
issued in violation of any applicable securities Laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)   &nbsp;
Except as set forth in <U>Schedule 4.3(b)</U>, there are no options, warrants or other rights to subscribe for or purchase any
shares or other equity interests in or of Newegg or securities convertible into or exchangeable for, or that otherwise confer on
the holder any right to acquire any shares or other equity interests in or of Newegg, or preemptive rights or rights of first refusal
or first offer, nor are there any Contracts, commitments, arrangements or restrictions to which Newegg or any of its shareholders
is a party or bound relating to any equity securities of Newegg, whether or not outstanding. There are no outstanding or authorized
equity appreciation, phantom equity or similar rights with respect to Newegg. There are no voting trusts, proxies, shareholder
agreements or any other agreements or understandings with respect to the voting of Newegg&rsquo;s shares or other equity interests.
There are no outstanding contractual obligations of Newegg to repurchase, redeem or otherwise acquire any shares or other equity
interests or securities in or of Newegg, nor has Newegg granted any registration rights to any Person with respect to Newegg&rsquo;s
equity securities. All of Newegg&rsquo;s securities have been granted, offered, sold and issued in compliance with all applicable
securities Laws. As a result of the consummation of the transactions contemplated by this Agreement, no shares or other equity
interests in or of Newegg are issuable and no rights in connection with any interests, warrants, rights, options or other securities
of Newegg accelerate or otherwise become triggered (whether as to vesting, exercisability, convertibility or otherwise).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c) &nbsp; Except as set forth in Schedule 4.3(c), Newegg has
not declared or paid any distribution or dividend in respect of its shares or other equity interests and has not repurchased,
redeemed or otherwise acquired any shares or other equity interests in or of Newegg, and the board of directors of Newegg has
not authorized any of the foregoing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.4    <U>Subsidiaries</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)    <U>Schedule
4.4(a)</U>&nbsp;sets forth the name of each Subsidiary of Newegg, and with respect to each Subsidiary (a) its jurisdiction of organization
and (b) its Tax election to be treated as a corporate or a disregarded entity under the Code and any state or applicable non-U.S.
Tax laws, if any. All of the outstanding equity securities of each Subsidiary of Newegg are duly authorized and validly issued,
fully paid and non-assessable (if applicable), and were offered, sold and delivered in compliance with all applicable securities
Laws, and owned by Newegg or one of its Subsidiaries free and clear of all Liens (other than those, if any, imposed by such Subsidiary&rsquo;s
Organizational Documents). There are no Contracts to which Newegg or any of its Affiliates is a party or bound with respect to
the voting (including voting trusts or proxies) of the shares or other equity interests of any Subsidiary of Newegg other than
the Organizational Documents of any such Subsidiary or as otherwise disclosed in the Newegg Disclosure Schedules. There are no
outstanding or authorized options, warrants, rights, agreements, subscriptions, convertible securities or commitments to which
any Subsidiary of Newegg is a party or which are binding upon any Subsidiary of Newegg providing for the issuance or redemption
of any shares or other equity interests in or of any Subsidiary of Newegg except as otherwise disclosed in the Newegg Disclosure
Schedules. There are no outstanding equity appreciation, phantom equity, profit participation or similar rights granted by any
Subsidiary of Newegg. No Subsidiary of Newegg has any limitation on its ability to make any distributions or dividends to its equity
holders, whether by Contract, Order or applicable Law. Newegg does not own or have any rights to acquire, directly or indirectly,
any shares or other equity interests of any Person. None of Newegg or its Subsidiaries is a participant in any joint venture, partnership
or similar arrangement. There are no outstanding material contractual obligations of Newegg or its Subsidiaries to provide funds
to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any other Person (other than loans to
customers in the ordinary course of business).&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.5    <U>Governmental
Approvals</U>. No Consent of or with any Governmental Authority on the part of any Newegg Subsidiary is required to be obtained
or made in connection with the execution, delivery or performance by Newegg of this Agreement or any Ancillary Documents to which
it is a party or the consummation by Newegg of the transactions contemplated hereby or thereby other than (a) such filings as contemplated
by this Agreement and (b) where the failure to obtain or make such Consents or to make such filings or notifications, would not
reasonably be expected to have a Material Adverse Effect on Newegg.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.6    <U>Non-Contravention</U>.
The execution and delivery by Newegg (or any other Newegg Subsidiary, as applicable) of this Agreement and each Ancillary Document
to which any Newegg Subsidiary is a party or otherwise bound, and the consummation by any Newegg Subsidiary of the transactions
contemplated hereby and thereby and compliance by any Newegg Subsidiary with any of the provisions hereof and thereof, will not
(a) conflict with or violate any provision of any Newegg Subsidiary&rsquo;s Organizational Documents, (b) subject to obtaining
the Consents from Governmental Authorities referred to in&nbsp;<U>Section 4.5</U>&nbsp;hereof, and any condition precedent to such
Consent or waiver having been satisfied, conflict with or violate any Law, Order or Consent applicable to any Newegg Subsidiary
or any of their properties or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or
an event which, with notice or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal,
suspension, cancellation or modification of, (iv) accelerate the performance required by any Newegg Subsidiary under, (v) result
in a right of termination or acceleration under, (vi) give rise to any obligation to make payments or provide compensation under,
(vii) result in the creation of any Lien upon any of the properties or assets of any Newegg Subsidiary under, (viii) give rise
to any obligation to obtain any third party consent or provide any notice to any Person or (ix) give any Person the right to declare
a default, exercise any remedy, claim a rebate, chargeback, penalty or change in delivery schedule, accelerate the maturity or
performance, cancel, terminate or modify any right, benefit, obligation or other term under, any of the terms, conditions or provisions
of, any Newegg Material Contract, except for any deviations from any of the foregoing clauses that would not reasonably be expected
to have a Material Adverse Effect on Newegg.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.7    <U>Financial
Statements</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)   &nbsp;
As used herein, the term &ldquo;<U>Newegg&nbsp;Financials</U>&rdquo; means the (i) audited consolidated financial statements of
the Newegg Subsidiaries (including, in each case, any related notes thereto), consisting of the consolidated balance sheets of
the Newegg Subsidiaries as of December 31, 2019 and 2018, and the related consolidated audited income statements, changes in shareholder
equity and statements of cash flows for the three years ended on December 31, 2019. Newegg Financials (i) accurately reflect the
books and records of the Newegg Subsidiaries as of the times and for the periods referred to therein, (ii) were prepared in accordance
with GAAP, consistently applied throughout and among the periods involved (except that the unaudited statements exclude the footnote
disclosures and other presentation items required for GAAP and exclude year-end adjustments which will not be material in amount),
and (iii) fairly present in all material respects the financial position of the Newegg Subsidiaries as of the respective dates
thereof and the results of the operations and cash flows of the Newegg Subsidiaries for the periods indicated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)   &nbsp;
Each Newegg Subsidiary maintains accurate books and records reflecting its assets and Liabilities in all material respects and
maintains proper and adequate internal accounting controls that provide reasonable assurance that (i) such Newegg Subsidiary does
not maintain any off-the-book accounts and that such Newegg Subsidiary&rsquo;s assets are used only in accordance with the Newegg
Subsidiary&rsquo;s management directives, (ii) transactions are executed with management&rsquo;s authorization, (iii) transactions
are recorded as necessary to permit preparation of the financial statements of such Newegg Subsidiary and to maintain accountability
for such Newegg Subsidiary&rsquo;s assets, (iv) access to such Newegg Subsidiary&rsquo;s assets is permitted only in accordance
with management&rsquo;s authorization, (v) the reporting of such Newegg Subsidiary&rsquo;s assets is compared with existing assets
at regular intervals and verified for actual amounts and (vi) accounts, notes and other receivables are recorded accurately, and
proper and adequate procedures are implemented to effect the collection of accounts, notes and other receivables on a current and
timely basis. No Newegg Subsidiary has been subject to or involved in any fraud that involves management or other employees who
have a significant role in the internal controls over financial reporting of Newegg and its Subsidiaries. Since April 1, 2017,
neither Newegg or its Representatives has received any written complaint, allegation, assertion or claim regarding the accounting
or auditing practices, procedures, methodologies or methods of any Newegg Subsidiary or its internal accounting controls, including
any material written complaint, allegation, assertion or claim that any Newegg Subsidiary has engaged in questionable accounting
or auditing practices.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c) &nbsp; No Newegg Subsidiary has ever been subject to the
reporting requirements of Sections 13(a) and 15(d) of the Exchange Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(d)   &nbsp;
All material Indebtedness of the Newegg Subsidiaries is disclosed in the financial statements and related notes previously delivered
to LLIT. No material Indebtedness of any Newegg Subsidiary contains any restriction upon (i) the prepayment of any of such Indebtedness,
(ii) the incurrence of Indebtedness by any Newegg Subsidiary, or (iii) the ability of the Newegg Subsidiaries to grant any Lien
on their respective properties or assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(e)   &nbsp;
No Newegg Subsidiary is subject to any Liabilities or obligations (whether or not required to be reflected on a balance sheet prepared
in accordance with GAAP), except for those that are either (i) adequately reflected or reserved on or provided for in the consolidated
balance sheet of Newegg and its Subsidiaries as of date of Newegg Financials or (ii) not material and that were incurred after
the date of the most recent audited Newegg Financials in the ordinary course of business consistent with past practice (other than
Liabilities for breach of any Contract or violation of any Law).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(f)   &nbsp;
All financial projections with respect to the Newegg Subsidiaries that were delivered by or on behalf of Newegg to LLIT or its
Representatives were prepared in good faith using assumptions that Newegg believes to be reasonable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.8    <U>Absence
of Certain Changes</U>. Since&nbsp;the date of the most recent audited Newegg Financials, each Newegg Subsidiary has (a) conducted
its business only in the ordinary course of business consistent with past practice, (b) not been subject to a Material Adverse
Effect and (c) has not taken any action or committed or agreed to take any action that would be prohibited by&nbsp;<U>Section 5.2(b)</U>&nbsp;if
such action were taken on or after the date hereof without the consent of LLIT other than such action as contemplated by this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.9    <U>Compliance
with Laws</U>. No Newegg Subsidiary is or has been in material conflict or non-compliance with, or in material default or violation
of, nor has any Newegg Subsidiary received, since April 1, 2017, any written or, to the Knowledge of Newegg, oral notice of any
material conflict or non-compliance with, or material default or violation of, any applicable Laws by which it or any of its properties,
assets, employees, business or operations are or were bound or affected, except for such conflict, noncompliance, default or violation
which would not reasonably be expected to have a Material Adverse Effect on Newegg.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.10
&nbsp;<U>Newegg Permits</U>. Each Newegg Subsidiary (and its employees who are legally required to be licensed by a Governmental
Authority in order to perform his or her duties with respect to his or her employment with any Newegg Subsidiary), holds all Permits
necessary to lawfully conduct in all material respects its business as presently conducted and as currently contemplated to be
conducted, and to own, lease and operate its assets and properties (collectively, the &ldquo;<U>Newegg&nbsp;Permits</U>&rdquo;).
Newegg has made available to LLIT true, correct and complete copies of all material Newegg Permits. All of Newegg Permits are in
full force and effect, and no suspension or cancellation of any of Newegg Permits is pending or, to Newegg&rsquo;s Knowledge, threatened,
except where the failure to hold such Permit or for such Permit to be in full force and effect would not reasonably be expected
to have a Material Adverse Effect on Newegg. No Newegg Subsidiary is in violation in any material respect of the terms of any Newegg
Permit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.11
&nbsp;<U>Litigation</U>. Except as set forth in <U>Schedule 4.11</U>, there is no (a) material Action of any nature pending or,
to Newegg&rsquo;s Knowledge, threatened, nor is there any reasonable basis for any Action to be made, or (b) Order pending now
or rendered by a Governmental Authority since April 1, 2017, in either case of (a) or (b) by or against any Newegg Subsidiary,
its current or former directors, officers or equity holders, which would reasonably be expected to have a Material Adverse Effect
on Newegg. Except as set forth in <U>Schedule 4.11</U>, since April 1, 2017, none of the current or former officers, senior management
or directors of any Newegg Subsidiary have been charged with, indicted for, arrested for, or convicted of any felony or any crime
involving fraud.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Section 4.12   &nbsp;<U>Material
Contracts</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)    <U>Schedule
4.12(a)</U>&nbsp;sets forth a true, correct and complete list of, and Newegg has made available to LLIT (including written summaries
of oral Contracts), true, correct and complete copies of, each Contract to which any Newegg Subsidiary is a party or by which any
Newegg Subsidiary, or any of its properties or assets are bound or affected, which (i) creates or imposes a Liability greater than
$250,000, (ii) may not be cancelled by a Newegg Subsidiary on less than sixty (60) days&rsquo; prior notice without payment of
a material penalty or termination fee or (iii) prohibits, prevents, restricts or impairs in any material respect any business practice
of a Newegg Subsidiary as its business as is currently conducted (each contract required to be set forth on&nbsp;<U>Schedule 4.12(a)</U>,
a &ldquo;<U>Newegg Material Contract</U>&rdquo;) that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(i)   &nbsp;
contains covenants that limit the ability of any Newegg Subsidiary (A) to compete in any line of business or with any Person or
in any geographic area or to sell, or provide any service or product or solicit any Person, including any non-competition covenants,
employee and customer non-solicit covenants, exclusivity restrictions, rights of first refusal or most-favored pricing clauses
or (B) to purchase or acquire an interest in any other Person;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(ii)   &nbsp;
involves any joint venture, profit-sharing, partnership, limited liability company or other similar agreement or arrangement relating
to the formation, creation, operation, management or control of any partnership or joint venture;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(iii)   &nbsp;
involves any exchange traded, over the counter or other swap, cap, floor, collar, futures contract, forward contract, option or
other derivative financial instrument or Contract, based on any commodity, security, instrument, asset, rate or index of any kind
or nature whatsoever, whether tangible or intangible, including currencies, interest rates, foreign currency and indices;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(iv)   &nbsp;
evidences Indebtedness (whether incurred, assumed, guaranteed or secured by any asset) of any Newegg Subsidiary having an outstanding
principal amount in excess of $250,000;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(v)   &nbsp;
involves the acquisition or disposition, directly or indirectly (by merger or otherwise), of assets with an aggregate value in
excess of $250,000 (other than in the ordinary course of business consistent with past practice) or shares or other equity interests
in or of another Person;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(vi)
&nbsp;relates to any merger, consolidation or other business combination with any other Person or the acquisition or disposition
of any other entity or its business or material assets or the sale of any Newegg Subsidiary, its business or material assets;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(vii) &nbsp;
&nbsp;by its terms, individually or with all related Contracts, calls for aggregate payments or receipts by the Newegg Subsidiaries
under such Contract or Contracts of more than $250,000 in the aggregate;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(viii) &nbsp;
obligates the Newegg Subsidiaries to provide continuing indemnification or a guarantee of obligations of a third party after the
date hereof in excess of $250,000;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(ix)   &nbsp;
is between any Newegg Subsidiary and any Top Customer or Top Supplier (other than in the ordinary course of business);</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(x)   &nbsp;
is between any Newegg Subsidiary and any directors, officers or employees of a Newegg Subsidiary (other than at-will employment
arrangements with employees entered into in the ordinary course of business consistent with past practice), including all non-competition,
severance and indemnification agreements, or any Related Person;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xi)   &nbsp;
obligates the Newegg Subsidiaries to make any capital commitment or expenditure in excess of $250,000 (including pursuant to any
joint venture);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xii)   &nbsp;
relates to a material settlement entered into within three (3) years prior to the date of this Agreement or under which any Newegg
Subsidiary has outstanding obligations (other than customary confidentiality obligations or in the ordinary course of business);</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xiii)   &nbsp;
provides another Person (other than another Newegg Subsidiary or any manager, director or officer of any Newegg Subsidiary) with
a power of attorney;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xiv)   &nbsp;
relates to the development, ownership, licensing or use of any Intellectual Property by, to or from any Newegg Subsidiary, other
than Off-the-Shelf Software Agreements; or</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xv)   &nbsp;
is otherwise material to any Newegg Subsidiary and not described in clauses (i) through (xiv) above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)   &nbsp;
With respect to each Newegg Material Contract: (i) such Newegg Material Contract is valid and binding and enforceable in all material
respects against the Newegg Subsidiary party thereto (subject to the Enforceability Exceptions) and, to the Knowledge of Newegg,
each other party thereto, and is in full force and effect (except as such enforcement may be limited by the Enforceability Exceptions);
(ii) neither the execution of this Agreement nor the consummation of the transactions contemplated by this Agreement will affect
the validity or enforceability of any Newegg Material Contract in any material respect; (iii) no Newegg Subsidiary is in breach
or default in any material respect, and no event has occurred that with the passage of time or giving of notice or both would constitute
a breach or default in any material respect by any Newegg Subsidiary, or permit termination or acceleration by the other party
thereto, under such Newegg Material Contract; (iv) to the Knowledge of Newegg, no other party to such Newegg Material Contract
is in breach or default in any material respect, and no event has occurred that with the passage of time or giving of notice or
both would constitute such a breach or default by such other party in any material respect, or permit termination or acceleration
by any Newegg Subsidiary, under such Newegg Material Contract; (v) no Newegg Subsidiary has received written or, to the Knowledge
of Newegg, oral notice of an intention by any party to any such Newegg Material Contract that provides for a continuing obligation
by any party thereto to terminate such Newegg Material Contract or amend the terms thereof, other than modifications in the ordinary
course of business that do not materially adversely affect any Newegg Subsidiary; and (vi) no Newegg Subsidiary has waived any
material rights under any such Newegg Material Contract.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Section 4.13   <U>Intellectual
Property</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)    <U>Schedule
4.13(a)(i)</U>&nbsp;sets forth: (i) all Patents, Trademarks, Internet Assets and Copyrights owned or licensed by a Newegg Subsidiary
or otherwise used or held for use by a Newegg Subsidiary in which a Newegg Subsidiary is the owner, applicant or assignee (&ldquo;<U>Newegg
Registered IP</U>&rdquo;), specifying as to each item, as applicable: (A) the nature of the item, including the title, (B) the
owner of the item, (C) the jurisdictions in which the item is issued or registered or in which an application for issuance or registration
has been filed and (D) the issuance, registration or application numbers and dates; and (ii) all material unregistered Intellectual
Property owned or purported to be owned by a Newegg Subsidiary.&nbsp;<U>Schedule 4.13(a)(ii)</U>&nbsp;sets forth all licenses,
sublicenses and other agreements or permissions (&ldquo;<U>Newegg IP Licenses</U>&rdquo;) (other than &ldquo;shrink wrap,&rdquo;
&ldquo;click wrap,&rdquo; and &ldquo;off the shelf&rdquo; software agreements and other agreements for Software commercially available
on reasonable terms to the public generally with license, maintenance, support and other fees of less than $5,000 per year (collectively,
&ldquo;<U>Off-the-Shelf Software Agreements</U>&rdquo;), which are not required to be listed, although such licenses are &ldquo;Newegg
IP Licenses&rdquo; as that term is used herein), under which a Newegg Subsidiary is a licensee or otherwise is authorized to use
or practice any Intellectual Property, and describes (A) the applicable Intellectual Property licensed, sublicensed or used and
(B) any royalties, license fees or other compensation due from a Newegg Subsidiary, if any. Each Newegg Subsidiary owns, free and
clear of all Liens (other than Permitted Liens), has valid and enforceable rights in, and has the unrestricted right to use, sell,
license, transfer or assign, all Intellectual Property currently used, licensed or held for use by such Newegg Subsidiary, and
previously used or licensed by such Newegg Subsidiary, except for the Intellectual Property that is the subject of Newegg IP Licenses.
For each Patent and Patent application in Newegg Registered IP, the Newegg Subsidiaries have obtained valid assignments of inventions
from each inventor. Except as set forth on&nbsp;<U>Schedule 4.13(a)(iii)</U>, all Newegg Registered IP is owned exclusively by
the applicable Newegg Subsidiary without obligation to pay royalties, licensing fees or other fees, or otherwise account to any
third party with respect to such Newegg Registered IP.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b) &nbsp; Each Newegg Subsidiary has a valid and enforceable
license to use all Intellectual Property that is the subject of Newegg IP Licenses applicable to such Newegg Subsidiary. Newegg
IP Licenses include all of the licenses, sublicenses and other agreements or permissions necessary to operate the Newegg Subsidiaries
as presently conducted. Each Newegg Subsidiary has performed all obligations imposed on it in Newegg IP Licenses, has made all
payments required to date, and such Newegg Subsidiary is not, nor, to the Knowledge of Newegg, is any other party thereto, in
breach or default thereunder, nor has any event occurred that with notice or lapse of time or both would constitute a default
thereunder, except that any breach or default would not reasonably be expected to have a Material Adverse Effect on Newegg. The
continued use by the Newegg Subsidiaries of the Intellectual Property that is the subject of Newegg IP Licenses in the same manner
that it is currently being used is not restricted by any applicable license of any Newegg Subsidiary. All registrations for Copyrights,
Patents and Trademarks that are owned by or exclusively licensed to any Newegg Subsidiary are valid and in force, and all applications
to register any Copyrights, Patents and Trademarks are pending and in good standing, all without challenge of any kind. No Newegg
Subsidiary is party to any Contract that requires a Newegg Subsidiary to assign to any Person all of its rights in any Intellectual
Property developed by a Newegg Subsidiary under such Contract.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c)    <U>Schedule
4.13(c)</U>&nbsp;sets forth all licenses, sublicenses and other agreements or permissions under which a Newegg Subsidiary is the
licensor (each, an &ldquo;<U>Outbound IP License</U>&rdquo;), and for each such Outbound IP License, describes (i) the applicable
Intellectual Property licensed, (ii) the licensee under such Outbound IP License, and (iii) any royalties, license fees or other
compensation due to a Newegg Subsidiary, if any. Each Newegg Subsidiary has performed all obligations imposed on it in the Outbound
IP Licenses, and such Newegg Subsidiary is not, nor, to the Knowledge of Newegg, is any other party thereto, in breach or default
thereunder, nor has any event occurred that with notice or lapse of time or both would constitute a default thereunder, except
that any breach or default would not reasonably be expected to have a Material Adverse Effect on Newegg.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(d)   &nbsp;
No Action is pending or, to Newegg&rsquo;s Knowledge, threatened that challenges the validity, enforceability, ownership, or right
to use, sell, license or sublicense any Intellectual Property currently licensed, used or held for use by the Newegg Subsidiaries
in any material respect. No Newegg Subsidiary has received any written or, to the Knowledge of Newegg, oral notice or claim asserting
or suggesting that any infringement, misappropriation, violation, dilution or unauthorized use of the Intellectual Property of
any other Person is or may be occurring or has or may have occurred, as a consequence of the business activities of any Newegg
Subsidiary, nor to the Knowledge of Newegg is there a reasonable basis therefor. There are no Orders to which any Newegg Subsidiary
is a party or its otherwise bound that (i) restrict the rights of a Newegg Subsidiary to use, transfer, license or enforce any
Intellectual Property owned by a Newegg Subsidiary, (ii) restrict the conduct of the business of a Newegg Subsidiary in order to
accommodate a third Person&rsquo;s Intellectual Property, or (iii) grant any third Person any right with respect to any Intellectual
Property owned by a Newegg Subsidiary. No Newegg Subsidiary is currently infringing, or has, in the past, infringed, misappropriated
or violated any Intellectual Property of any other Person in any material respect in connection with the ownership, use or license
of any Intellectual Property owned or purported to be owned by a Newegg Subsidiary or, to the Knowledge of Newegg, otherwise in
connection with the conduct of the respective businesses of the Newegg Subsidiaries. To Newegg&rsquo;s Knowledge, no third party
is infringing upon, has misappropriated or is otherwise violating any Intellectual Property owned, licensed by, licensed to, or
otherwise used or held for use by any Newegg Subsidiary (&ldquo;<U>Newegg IP</U>&rdquo;) in any material respect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(e)   &nbsp;
All employees and independent contractors of a Newegg Subsidiary have assigned to the Newegg Subsidiaries all Intellectual Property
arising from the services performed for a Newegg Subsidiary by such Persons. No current or former officers, employees or independent
contractors of a Newegg Subsidiary have claimed any ownership interest in any Intellectual Property owned by a Newegg Subsidiary.
To the Knowledge of Newegg, there has been no violation of a Newegg Subsidiary&rsquo;s policies or practices related to protection
of Newegg Intellectual Property or any confidentiality or nondisclosure Contract relating to the Intellectual Property owned by
a Newegg Subsidiary, except for any violation that would not reasonably be expected to have a Material Adverse Effect on Newegg.
Newegg has provided LLIT with true and complete copies of all written Contracts referenced in subsections under which employees
and independent contractors assigned their Intellectual Property to a Newegg Subsidiary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(f) &nbsp; To the Knowledge of Newegg, no Person has obtained
unauthorized access to third party information and data in the possession of a Newegg Subsidiary, nor has there been any other
compromise of the security, confidentiality or integrity of such information or data. Each Newegg Subsidiary has complied in all
material respects with all applicable Laws relating to privacy, personal data protection, and the collection, processing and use
of personal information and its own privacy policies and guidelines. The operation of the business of the Newegg Subsidiaries
has not and does not materially violate any right to privacy or publicity of any third person, or constitute unfair competition
or trade practices under applicable Law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(g)   &nbsp;
The consummation of any of the transactions contemplated by this Agreement will neither violate nor by their terms result in the
material breach, material modification, cancellation, termination, suspension of, or acceleration of any payments with respect
to, or release of source code because of (i) any Contract providing for the license or other use of Intellectual Property owned
by a Newegg Subsidiary, or (ii) any Newegg IP License. Following the Closing, Newegg shall be permitted to exercise, directly or
indirectly through its Subsidiaries, all of the Newegg Subsidiaries&rsquo; rights under such Contracts or IP Licenses described
in the previous sentence to the same extent that the Newegg Subsidiaries would have been able to exercise had the transactions
contemplated by this Agreement not occurred, without the payment of any additional amounts or consideration other than ongoing
fees, royalties or payments which the Newegg Subsidiaries would otherwise be required to pay in the absence of such transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Section 4.14   <U>Taxes
and Returns</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)   &nbsp;
Each Newegg Subsidiary has or will have timely filed, or caused to be timely filed, all Tax Returns and reports required to be
filed by it (taking into account all available extensions), which Tax Returns are true, accurate, correct and complete in all material
respects, and has paid, collected or withheld, or caused to be paid, collected or withheld, all Taxes required to be paid, collected
or withheld, other than such Taxes for which adequate reserves in Newegg Financials have been established in accordance with GAAP. <U>Schedule
4.14(a)</U>&nbsp;sets forth each jurisdiction in which each Newegg Subsidiary files or is required to file a Tax Return. Each Newegg
Subsidiary has complied in all material respects with all applicable Laws relating to Tax.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)   &nbsp;
Except as set forth in <U>Schedule 4.14(b)</U>, there is no current pending or, to the Knowledge of Newegg, threatened Action against
a Newegg Subsidiary by a Governmental Authority in a jurisdiction where the Newegg Subsidiary does not file Tax Returns that it
is or may be subject to taxation by that jurisdiction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c) &nbsp; Except as
set forth in <U>Schedule 4.14(c),</U> no Newegg Subsidiary is being audited by any Tax authority or has been notified in
writing or, to the Knowledge of Newegg, orally by any Tax authority that any such audit is contemplated or pending. Except as
set forth in <U>Schedule 4.14(c)</U>, <U>t</U>here are no claims, assessments, audits, examinations, investigations or other
Actions pending against a Newegg Subsidiary in respect of any Tax, and no Newegg Subsidiary has been notified in writing of
any proposed Tax claims or assessments against it (other than, in each case, claims or assessments for which adequate
reserves in Newegg Financials have been established or are immaterial in amount).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(d)   &nbsp;
There are no Liens with respect to any Taxes upon any Newegg Subsidiary&rsquo;s assets, other than Permitted Liens.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(e)   &nbsp;
Each Newegg Subsidiary has collected or withheld all Taxes currently required to be collected or withheld by it, and all such Taxes
have been paid to the appropriate Governmental Authorities or set aside in appropriate accounts for future payment when due.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(f)   &nbsp;
Except as set forth in <U>Schedule 4.14(f)</U>, no Newegg Subsidiary has any outstanding waivers or extensions of any applicable
statute of limitations to assess any amount of Taxes. There are no outstanding requests by a Newegg Subsidiary for any extension
of time within which to file any Tax Return or within which to pay any Taxes shown to be due on any Tax Return.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(g)   &nbsp;
Except as set forth in <U>Schedule 4.14(g)</U>, no Newegg Subsidiary has made any change in accounting method or received a ruling
from, or signed an agreement with, any taxing authority that would reasonably be expected to have a material impact on its Taxes
following the Closing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(h) &nbsp; No Newegg Subsidiary has any Liability for the Taxes
of another Person (other than another Newegg Subsidiary) (i) under any applicable Tax Law, (ii) as a transferee or successor,
or (iii) by contract, indemnity or otherwise. No Newegg Subsidiary is a party to or bound by any Tax indemnity agreement, Tax
sharing agreement or Tax allocation agreement or similar agreement, arrangement or practice with respect to Taxes (including advance
pricing agreement, closing agreement or other agreement relating to Taxes with any Governmental Authority) that will be binding
on Newegg or its Subsidiaries with respect to any period following the Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(i)   &nbsp;
No Newegg Subsidiary has requested, or is the subject of or bound by any private letter ruling, technical advice memorandum, closing
agreement or similar ruling, memorandum or agreement with any Governmental Authority with respect to any Taxes, nor is any such
request outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.15   <U>Real
Property</U>.&nbsp; <U>Schedule 4.15</U>&nbsp;contains a complete and accurate list of all premises currently leased or subleased
or otherwise used or occupied by a Newegg Subsidiary for the operation of the business of a Newegg Subsidiary, and of all current
leases, lease guarantees, agreements and documents related thereto, including all amendments, terminations and modifications thereof
or waivers thereto (collectively, the &ldquo;<U>Newegg Real Property&nbsp;Leases</U>&rdquo;), as well as the current annual rent
and term under each Newegg Real Property Lease. Newegg has provided to LLIT a true and complete copy of each of Newegg Real Property
Leases, and in the case of any oral Newegg Real Property Lease, a written summary of the material terms of such Newegg Real Property
Lease. Newegg Real Property Leases are valid, binding and enforceable in accordance with their terms and are in full force and
effect. To the Knowledge of Newegg, no event has occurred which (whether with or without notice, lapse of time or both or the happening
or occurrence of any other event) would constitute a material default on the part of a Newegg Subsidiary or any other party under
any of Newegg Real Property Leases, and no Newegg Subsidiary has received notice of any such condition. No Newegg Subsidiary owns
or has ever owned any real property or any interest in real property (other than the leasehold interests in Newegg Real Property
Leases).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.16
&nbsp;<U>Personal Property</U>. Each item of Personal Property which is currently owned, used or leased by a Newegg Subsidiary
with a book value or fair market value of greater than Fifty Thousand Dollars ($50,000) is set forth on&nbsp;<U>Schedule 4.16</U>,
along with, to the extent applicable, a list of lease agreements and lease guarantees related thereto, including all amendments,
terminations and modifications thereof or waivers thereto (&ldquo;<U>Newegg Personal Property Leases</U>&rdquo;). All such items
of Personal Property are in good operating condition and repair (reasonable wear and tear excepted), and are suitable for their
intended use in the business of the Newegg Subsidiaries. Newegg has provided to LLIT a true and complete copy of each of Newegg
Personal Property Leases, and in the case of any oral Newegg Personal Property Lease, a written summary of the material terms of
such Newegg Personal Property Lease. Newegg Personal Property Leases are valid, binding and enforceable in accordance with their
terms and are in full force and effect. To the Knowledge of Newegg, no event has occurred which (whether with or without notice,
lapse of time or both or the happening or occurrence of any other event) would constitute a material default on the part of a Newegg
Subsidiary or any other party under any of Newegg Personal Property Leases, and no Newegg Subsidiary has received notice of any
such condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.17
&nbsp;<U>Title to and Sufficiency of Assets</U>. Each Newegg Subsidiary has good and marketable title to, or a valid leasehold
interest in or right to use, all of its assets, free and clear of all Liens other than (a) Permitted Liens, (b) the rights of lessors
under leasehold interests and (c) Liens specifically identified on the most recent audited Newegg Financials. The assets (including
Intellectual Property rights and contractual rights) of the Newegg Subsidiaries constitute all of the assets, rights and properties
that are used in the operation of the businesses of the Newegg Subsidiaries as it is now conducted and presently proposed to be
conducted or that are used or held by the Newegg Subsidiaries for use in the operation of the businesses of the Newegg Subsidiaries,
and taken together, are adequate and sufficient for the operation of the businesses of the Newegg Subsidiaries as currently conducted
and as presently proposed to be conducted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Section 4.18   &nbsp;<U>Employee
Matters</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)   &nbsp;
No Newegg Subsidiary is a party to any collective bargaining agreement or other Contract with any group of employees, labor organization
or other representative of any of the employees of any Newegg Subsidiary and Newegg has no Knowledge of any activities or proceedings
of any labor union or other party to organize or represent such employees. There has not occurred or, to the Knowledge of Newegg,
been threatened any strike, slow-down, picketing, work-stoppage, or other similar labor activity with respect to any such employees.
There are no unresolved labor controversies (including unresolved grievances and age or other discrimination claims), if any, that
are pending or, to the Knowledge of Newegg, threatened between any Newegg Subsidiary and Persons employed by or providing services
to a Newegg Subsidiary. No current officer or key employee of a Newegg Subsidiary has provided any Newegg Subsidiary written or,
to the Knowledge of Newegg, oral notice of his or her plan to terminate his or her employment with any Newegg Subsidiary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)   &nbsp;
Each Newegg Subsidiary (i) is and has been in compliance in all material respects with all applicable Laws respecting employment
and employment practices, terms and conditions of employment, health and safety and wages and hours, and other Laws relating to
discrimination, disability, labor relations, hours of work, payment of wages and overtime wages, pay equity, immigration, workers
compensation, working conditions, employee scheduling, occupational safety and health, family and medical leave, and employee terminations,
and have not received written notice, or any other form of notice, that there is any pending Action involving unfair labor practices
against a Newegg Subsidiary, (ii) is not liable for any material arrears of wages or any material penalty for failure to comply
with any of the foregoing, and (iii) is not liable for any material payment to any Governmental Authority with respect to unemployment
compensation benefits, social security or other benefits or obligations for employees, independent contractors or consultants (other
than routine payments to be made in the ordinary course of business and consistent with past practice). Except as set forth in
<U>Schedule 4.18(b)</U>, there are no Actions pending or, to the Knowledge of Newegg, threatened against a Newegg Subsidiary brought
by or on behalf of any applicant for employment, any current or former employee, any Person alleging to be a current or former
employee, or any Governmental Authority, relating to any such Law or regulation, or alleging breach of any express or implied contract
of employment, wrongful termination of employment, or alleging any other discriminatory, wrongful or tortious conduct in connection
with the employment relationship.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c)    The
Newegg Subsidiaries have paid in full to all employees all wages, salaries, commission, bonuses and other compensation due to its
employees, including overtime compensation, and, except as set forth in <U>Schedule 4.18(c),</U> there are no severance payments
which are or could become payable by a Newegg Subsidiary to any such employees under the terms of any written or, to Newegg&rsquo;s
Knowledge, oral agreement, or commitment or any Law, custom, trade or practice. Each such employee has entered into Newegg&rsquo;s
standard form of employee non-disclosure, inventions and restrictive covenants agreement with Newegg or its Subsidiaries (whether
pursuant to a separate agreement or incorporated as part of such employee&rsquo;s overall employment agreement), a copy of which
has been provided to LLIT by Newegg.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(d)   &nbsp;
Except as set forth in <U>Schedule 4.18(d)</U>, there are no independent contractors (including consultants) currently engaged
by any Newegg Subsidiary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.19
&nbsp;<U>Benefit Plans</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)   &nbsp;
Set forth on&nbsp;<U>Schedule 4.19(a)</U>&nbsp;is a true and complete list of each Foreign Plan of a Newegg Subsidiary (each, a
&ldquo;<U>Newegg Benefit Plan</U>&rdquo;). No Newegg Subsidiary has ever maintained or contributed to (or had an obligation to
contribute to) any &ldquo;employee benefit plan&rdquo; (as defined in Section 3(3) of ERISA).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)   &nbsp;
With respect to each Newegg Benefit Plan which covers any current or former officer, director, consultant or employee (or beneficiary
thereof) of a Newegg Subsidiary, Newegg has provided to LLIT accurate and complete copies, if applicable, of: (i) all Newegg Benefit
Plans and related trust agreements or annuity Contracts (including any amendments, modifications or supplements thereto); (ii)
the most recent annual and periodic accounting of plan assets; (iii) the most recent actuarial valuation; and (iv) all communications
with any Governmental Authority concerning any matter that is still pending or for which a Newegg Subsidiary has any outstanding
Liability or obligation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c)   &nbsp;
With respect to each Newegg Benefit Plan: (i) such Newegg Benefit Plan has been administered and enforced in all material respects
in accordance with its terms and the requirements of any and all applicable Laws, and has been maintained, where required, in good
standing with applicable regulatory authorities and Governmental Authorities; (ii) no breach of fiduciary duty has occurred; (iii)
no Action is pending, or to Newegg&rsquo;s Knowledge, threatened (other than routine claims for benefits arising in the ordinary
course of administration); and (iv) all contributions and premiums required to be made with respect to a Newegg Benefit Plan have
been timely made. No Newegg Subsidiary has incurred any obligation in connection with the termination of, or withdrawal from, any
Newegg Benefit Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(d)   &nbsp;
The present value of the accrued benefit liabilities (whether or not vested) under each Newegg Benefit Plan, determined as of the
end of Newegg&rsquo;s most recently ended fiscal year on the basis of actuarial assumptions, each of which is reasonable, did not
exceed the current value of the assets of such Newegg Benefit Plan allocable to such benefit liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(e)   &nbsp;
The consummation of the transactions contemplated by this Agreement and the Ancillary Documents will not: (i) entitle any individual
to severance pay, unemployment compensation or other benefits or compensation; or (ii) accelerate the time of payment or vesting,
or increase the amount of any compensation due, or in respect of, any individual.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(f)   &nbsp;
Except to the extent required by applicable Law, no Newegg Subsidiary provides health or welfare benefits to any former or retired
employee or is obligated to provide such benefits to any active employee following such employee&rsquo;s retirement or other termination
of employment or service.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(g)   &nbsp;
All Newegg Benefit Plans can be terminated at any time as of or after the Closing Date without resulting in any liability to any
Newegg Subsidiary, LLIT or their respective Affiliates for any additional contributions, penalties, premiums, fees, fines, excise
taxes or any other charges or liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section&nbsp;4.20
&nbsp;<U>Transactions with Related Persons</U>. Except as set forth in <U>Schedule 4.20</U> and except for the Restructure and
as set forth in the financial statements and related notes previously delivered to LLIT, no Newegg Subsidiary nor any of its Affiliates,
nor any Related Person of Newegg or any of its Affiliates, nor any immediate family member of any of the foregoing (whether directly
or indirectly through an Affiliate of such Person) is presently, or since April 1, 2017 has been, a party to any transaction with
a Newegg Subsidiary, including any Contract or other arrangement (a) providing for the furnishing of services by (other than as
officers, directors or employees of the Newegg Subsidiary), (b) providing for the rental of real property or Personal Property
from or (c) otherwise requiring payments to (other than for services or expenses as directors, officers or employees of the Newegg
Subsidiary in the ordinary course of business consistent with past practice), any Related Person or any Person in which any Related
Person has an interest as an owner, officer, manager, director, trustee or partner or in which any Related Person has any direct
or indirect interest (other than the ownership of securities representing no more than two percent (2%) of the outstanding voting
power or economic interest of a publicly traded company). Except as set forth in <U>Schedule 4.20</U> or in the financial statements
and related notes previously delivered to LLIT, no Newegg Subsidiary has outstanding any Contract or other arrangement or commitment
with any Related Person, and no Related Person owns any real property or Personal Property, or right, tangible or intangible (including
Intellectual Property) which is used in the business of any Newegg Subsidiary.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.21
&nbsp;<U>Books and Records</U>. All of the financial books and records of the Newegg Subsidiaries are complete and accurate in
all material respects and have been maintained in the ordinary course consistent with past practice and in accordance with applicable
Laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.22
&nbsp;<U>Accounts Receivable</U>. All accounts, notes and other receivables, whether or not accrued, and whether or not billed,
of the Newegg Subsidiaries (the&nbsp;&ldquo;<U>Accounts Receivable</U>&rdquo;) arose from sales actually made or services actually
performed and represent valid obligations to a Newegg Subsidiary. None of the Accounts Receivable are, to the Knowledge of Newegg,
subject to any right of recourse, defense, deduction, return of goods, counterclaim, offset, or set off on the part of the obligor
in excess of any amounts reserved therefor on Newegg Financials. All of the Accounts Receivable are, to the Knowledge of Newegg,
fully collectible according to their terms in amounts not less than the aggregate amounts thereof carried on the books of the Newegg
Subsidiaries (net of reserves) within ninety (90) days.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Section 4.23   &nbsp;<U>Certain
Business Practices</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)   &nbsp;
No Newegg Subsidiary, nor any of their respective Representatives acting on their behalf, has (i) used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees, to foreign or domestic political parties or campaigns or violated any provision of the Foreign
Corrupt Practices Act of 1977 or (iii) made any other unlawful payment. No Newegg Subsidiary, nor any of their respective Representatives
acting on their behalf has directly or indirectly, given or agreed to give any gift or similar benefit in any material amount to
any customer, supplier, governmental employee or other Person who is or may be in a position to help or hinder any Newegg Subsidiary
or assist any Newegg Subsidiary in connection with any actual or proposed transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)   &nbsp;
The operations of each Newegg Subsidiary are and have been conducted at all times in compliance with laundering statutes in all
applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any Governmental Authority, and no Action involving a Newegg Subsidiary with respect to the any of
the foregoing is pending or, to the Knowledge of Newegg, threatened.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c)   &nbsp;
No Newegg Subsidiary or any of their respective directors or officers, or, to the Knowledge of Newegg, any other Representative
acting on behalf of a Newegg Subsidiary is currently identified on the specially designated nationals or other blocked person list
or otherwise currently subject to any U.S. sanctions administered by OFAC, and no Newegg Subsidiary has, directly or indirectly,
used any funds, or loaned, contributed or otherwise made available such funds to any Subsidiary, joint venture partner or other
Person, in connection with any sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC
or for the purpose of financing the activities of any Person currently subject to, or otherwise in violation of, any U.S. sanctions
administered by OFAC in the last five (5) fiscal years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.24
&nbsp;<U>Investment Company Act</U>. No Newegg Subsidiary is an &ldquo;investment company&rdquo; or a Person directly or indirectly
&ldquo;controlled&rdquo; by or acting on behalf of an &ldquo;investment company&rdquo;, in each case within the meaning of the
Investment Company Act of 1940, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.25
&nbsp;<U>Finders and Investment Bankers</U>. No Newegg Subsidiary has incurred or will incur any Liability for any brokerage, finder&rsquo;s
or other fee or commission in connection with the transactions contemplated hereby.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.26
&nbsp;<U>Independent Investigation</U>. Newegg has conducted its own independent investigation, review and analysis of the business,
results of operations, prospects, condition (financial or otherwise) or assets of LLIT, and acknowledges that it has been provided
adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of LLIT for such
purpose. Newegg acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to consummate the transactions
contemplated hereby, it has relied solely upon its own investigation and the express representations and warranties of LLIT and
LLIT Subsidiaries set forth in&nbsp;<U>Article III</U>&nbsp;and the covenants set forth in <U>Article V</U> (including the related
portions of LLIT Disclosure Schedules); and (b) neither LLIT nor any of its Representatives have made any representation or warranty
as to LLIT or this Agreement, except as expressly set forth in&nbsp;<U>Article III</U>&nbsp;(including the related portions of
LLIT Disclosure Schedules).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.27
&nbsp;<U>Information Supplied</U>. None of the information supplied or to be supplied by Newegg expressly for inclusion or incorporation
by reference: (a) in any Report on Form 6-K, and any exhibits thereto or any other report, form, registration or other filing made
with any Governmental Authority with respect to the transactions contemplated by this Agreement or any Ancillary Documents; (b)
in the Shareholder Meeting Notice; or (c) in the mailings or other distributions to LLIT&rsquo;s shareholders and/or prospective
investors with respect to the consummation of the transactions contemplated by this Agreement or in any amendment to any of documents
identified in (a) through (c), will, when filed, made available, mailed or distributed, as the case may be, contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not misleading. None of the information supplied or
to be supplied by Newegg expressly for inclusion or incorporation by reference in any of the Signing Press Release, the Signing
Filing, the Closing Filing and the Closing Press Release (in each case, as defined below) will, when filed or distributed, as applicable,
contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which they are made, not misleading. Notwithstanding
the foregoing, Newegg makes no representation, warranty or covenant with respect to any information supplied by or on behalf of
LLIT or its Affiliates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.28
&nbsp;<U>Disclosure</U>. No representations or warranties by Newegg in this Agreement (including the disclosure schedules hereto)
or the Ancillary Documents, (a) contains or will contain any untrue statement of a material fact, or (b) omits or will omit to
state, when read in conjunction with all of the information contained in this Agreement, the disclosure schedules hereto and the
Ancillary Documents, any fact necessary to make the statements or facts contained therein not materially misleading.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.29   &nbsp;<U>SAFE
Registrations</U>. Each Newegg Subsidiary or subsidiary that is incorporated outside of the PRC has taken, or is in the process
of taking, all reasonable steps to comply with, and to ensure compliance by each of its equity holders that is, or is directly
or indirectly owned or controlled by, a PRC resident or citizen with any applicable rules and regulations of the relevant PRC government
agencies (including the Ministry of Commerce, the National Development and Reform Commission and the State Administration of Foreign
Exchange) relating to overseas investment by PRC residents and citizens or overseas listing by offshore special purpose vehicles
controlled directly or indirectly by PRC companies and individuals, such as Newegg (the &ldquo;<U>PRC Overseas Investment Regulations</U>&rdquo;),
including requesting each equity holder that is, or is directly or indirectly owned or controlled by, a PRC resident or citizen
to complete any registration and other procedures required under applicable PRC Overseas Investment Regulations.<B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.30 <U>Newegg
Board and Special Committee.</U> The Newegg Board has formed a special committee (the &ldquo;<U>Newegg Special Committee</U>&rdquo;)
comprised solely of disinterested directors, whose members are determined in the Newegg Board&rsquo;s discretion. Newegg Special
Committee, with the advice and assistance of independent legal counsel, has recommended (subject to the satisfaction of the conditions
precedent set forth herein) that the Newegg Board approve this Agreement and the Merger contemplated hereby. The Newegg Board and
the Newegg Special Committee have unanimously recommended that the Newegg stockholders adopt this Agreement and approve all transactions
contemplated herein. Such recommendation shall not be withdrawn, modified or changed except pursuant to <U>Section 7.1(d)(iii)</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 4.31 <U>SEC
Filings.</U> All information, including financial statements, supplied or to be supplied by Newegg (such information, the &ldquo;<U>Newegg
Information</U>&rdquo;) which is included or incorporated by reference in each of the Form F-1 and the Form F-4 (collectively the
&ldquo;<U>Registration Statements</U>&rdquo;) will, at the time such Registration Statement is filed with the SEC, when it becomes
effective under the Securities Act, on the date it is mailed to LLIT shareholders and at the time of the Shareholder Meeting, not
contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to
make the statement therein, in light of the circumstances under which they were made, not misleading. If at any time prior to the
Effective Time any event with respect to Newegg or any Newegg Subsidiaries, or with respect to other Newegg Information, shall
occur that is required to be described in an amendment of, or a supplement to, the Registration Statements, Newegg shall promptly
but in no event later than the third (3rd) Business Day following the occurrence of such event, inform LLIT of such event. No representations
or warranties are made by Newegg with respect to the LLIT Information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">ARTICLE V<BR>
ADDITIONAL AGREEMENTS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Section 5.1    <U>Access
and Information</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)   &nbsp;
Newegg shall give, and shall direct its Representatives to give, LLIT and its Representatives, at reasonable times during normal
business hours and upon reasonable intervals and notice, access to all offices and other facilities and to all employees, properties,
Contracts, agreements, commitments, books and records, financial and operating data and other information (including Tax Returns,
internal working papers, client files, client Contracts and director service agreements), of or pertaining to the Newegg Subsidiaries,
as LLIT may reasonably request regarding the Newegg Subsidiaries and their respective businesses, assets, Liabilities, financial
condition, prospects, operations, management, employees and other aspects (including unaudited quarterly financial statements,
including a consolidated quarterly balance sheet and income statement, a copy of each material report, schedule and other document
filed with or received by a Governmental Authority pursuant to the requirements of applicable securities Laws, and independent
public accountants&rsquo; work papers (subject to the consent or any other conditions required by such accountants, if any)) and
instruct each of Newegg&rsquo;s Representatives to cooperate with LLIT and its Representatives in their investigation;&nbsp;<U>provided</U>,&nbsp;<U>however</U>,
that LLIT and its Representatives shall conduct any such activities in such a manner as not to unreasonably interfere with the
business or operations of the Newegg Subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)   &nbsp;
LLIT shall give, and shall direct its Representatives to give, Newegg and its Representatives, at reasonable times during normal
business hours and upon reasonable intervals and notice, access to all offices and other facilities and to all employees, properties,
Contracts, agreements, commitments, books and records, financial and operating data and other information (including Tax Returns,
internal working papers, client files, client Contracts and director service agreements), of or pertaining to LLIT or its Subsidiaries,
as Newegg or its Representatives may reasonably request regarding LLIT, its Subsidiaries and their respective businesses, assets,
Liabilities, financial condition, prospects, operations, management, employees and other aspects (including unaudited quarterly
financial statements, including a consolidated quarterly balance sheet and income statement, a copy of each material report, schedule
and other document filed with or received by a Governmental Authority pursuant to the requirements of applicable securities Laws,
and independent public accountants&rsquo; work papers (subject to the consent or any other conditions required by such accountants,
if any)) and instruct each of LLIT&rsquo;s or LLIT Subsidiaries&rsquo; Representatives to cooperate with Newegg, and their Representatives
in their investigation;&nbsp;<U>provided</U>,&nbsp;<U>however</U>, that Newegg, and their Representatives shall conduct any such
activities in such a manner as not to unreasonably interfere with the business or operations of LLIT or any of its Subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Section 5.2    <U>Conduct
of Business of Newegg.</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)   &nbsp;
Unless LLIT (acting through the LLIT Special Committee) shall otherwise consent in writing (such consent not to be unreasonably
withheld, conditioned or delayed), during the period from the date of this Agreement and continuing until the earlier of the termination
of this Agreement in accordance with&nbsp;<U>Section 9.1</U>&nbsp;or the Closing (the &ldquo;<B><I>Interim Period</I></B>&rdquo;),
except as expressly contemplated by this Agreement Newegg shall, and shall cause the Newegg Subsidiaries to, (i) conduct their
respective businesses, in all material respects, in the ordinary course of business consistent with past practice, (ii) comply
with all Laws applicable to the Newegg Subsidiaries and their respective businesses, assets and employees, and (iii) take all reasonable
measures necessary or appropriate to preserve intact, in all material respects, their respective business organizations, to keep
available the services of their respective managers, directors, officers, employees and consultants, to maintain, in all material
respects, their existing relationships with all Top Customers and Top Suppliers, and to preserve the possession, control and condition
of their respective material assets, all as consistent with past practice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)   &nbsp;
Without limiting the generality of&nbsp;<U>Section 5.2(a)</U>&nbsp;and except as contemplated by the terms of this Agreement, during
the Interim Period, without the prior written consent of LLIT (acting through the LLIT Special Committee) (such consent not to
be unreasonably withheld, conditioned or delayed), Newegg shall not, and shall cause the Newegg Subsidiaries to not:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(i)   &nbsp;
amend, waive or otherwise change, in any respect, its Organizational Documents;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(ii)   &nbsp;
authorize for issuance, issue, grant, sell, pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any of its
equity securities or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any of its equity
securities, or other securities, including any securities convertible into or exchangeable for any of its shares or other equity
securities or securities of any class and any other equity-based awards, or engage in any hedging transaction with a third Person
with respect to such securities;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(iii)   &nbsp;
split, combine, recapitalize or reclassify any of its shares or other equity interests or issue any other securities in respect
thereof or pay or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof)
in respect of its equity interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to acquire any of
its securities;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(iv)   &nbsp;
incur, create, assume, prepay or otherwise become liable for any Indebtedness (directly, contingently or otherwise), outside the
ordinary course of business, in excess of $250,000 (individually or in the aggregate), make a loan or advance to or investment
in any third party, or guarantee or endorse any Indebtedness, Liability or obligation of any Person outside the ordinary course
of business;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(v)   &nbsp;
increase the wages, salaries or compensation of its employees other than in the ordinary course of business, consistent with past
practice, and in any event not in the aggregate by more than five percent (5%), or make or commit to make any bonus payment (whether
in cash, property or securities) to any employee, or materially increase other benefits of employees generally, or enter into,
establish, materially amend or terminate any Newegg Benefit Plan with, for or in respect of any current consultant, officer, manager
director or employee, in each case other than as required by applicable Law, pursuant to the terms of any Newegg Benefit Plans
or in the ordinary course of business consistent with past practice;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(vi)   &nbsp;
make or rescind any material election relating to Taxes, settle any claim, action, suit, litigation, proceeding, arbitration, investigation,
audit or controversy relating to Taxes, file any amended Tax Return or claim for refund, or make any material change in its accounting
or Tax policies or procedures, in each case except as required by applicable Law or in compliance with GAAP;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(vii)   &nbsp;
transfer or license to any Person or otherwise extend, materially amend or modify, permit to lapse or fail to preserve any of Newegg
Registered IP, Newegg IP Licenses or other Newegg Intellectual Property, or disclose to any Person who has not entered into a confidentiality
agreement any Trade Secrets;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(viii) &nbsp;
terminate, or waive or assign any material right under any material agreement to which it is a party;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(ix)   &nbsp;
fail to maintain its books, accounts and records in all material respects in the ordinary course of business consistent with past
practice;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(x)   &nbsp;
establish any Subsidiary or enter into any new line of business;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xi)   &nbsp;
fail to use commercially reasonable efforts to keep in force insurance policies or replacement or revised policies providing insurance
coverage with respect to its assets, operations and activities in such amount and scope of coverage as are currently in effect;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xii)  &nbsp;
revalue any of its material assets or make any change in accounting methods, principles or practices, except to the extent required
to comply with GAAP and after consulting with Newegg&rsquo;s outside auditors;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xiii)
waive, release, assign, settle or compromise any claim, action or proceeding (including any suit, action, claim, proceeding or
investigation relating to this Agreement or the transactions contemplated hereby), other than waivers, releases, assignments, settlements
or compromises that involve only the payment of monetary damages (and not the imposition of equitable relief on, or the admission
of wrongdoing by, Newegg or its Affiliates) not in excess of $250,000 (individually or in the aggregate), or otherwise pay, discharge
or satisfy any Actions, Liabilities or obligations, unless such amount has been reserved in Newegg Financials;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xiv)  &nbsp;
effectuate a &ldquo;plant closing&rdquo; (as defined in the federal Worker Adjustment and Retraining Notification Act (&ldquo;<U>WARN
Act</U>&rdquo;)) affecting any site of employment or one or more facilities or operating units within any site of employment or
facility; or experience a &ldquo;mass layoff&rdquo; (as defined in the WARN Act) affecting any site of employment or facility;
or engaged in layoffs or employment terminations sufficient in number to trigger application of any similar state, local or foreign
law or regulation;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xv)  &nbsp;
acquire, including by merger, consolidation, acquisition of stock or assets, or any other form of business combination, any corporation,
partnership, limited liability company, other business organization or any division thereof, or any material amount of assets outside
the ordinary course of business consistent with past practice;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xvi)
make capital expenditures in excess of $250,000 (individually for any project (or set of related projects) or in the aggregate);</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xvii)
adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xviii)  &nbsp;
voluntarily incur any Liability or obligation (whether absolute, accrued, contingent or otherwise) in excess of $250,000 individually
or $1,000,000 in the aggregate other than in the ordinary course of business or pursuant to the terms of a Newegg Material Contract
or Newegg Benefit Plan in effect on the date hereof;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xix)
sell, lease, license, transfer, exchange or swap, mortgage or otherwise pledge or encumber (including securitizations), or otherwise
dispose of any material portion of its properties, assets or rights;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xx)   &nbsp;
enter into any agreement, understanding or arrangement with respect to the voting of equity securities of Newegg;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxi)   &nbsp;
take any action that would reasonably be expected to significantly delay or impair the obtaining of any consents or approvals of
any Governmental Authority to be obtained in connection with this Agreement;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxii)  &nbsp;
enter into, amend, waive or terminate (other than terminations in accordance with their terms) any transaction with any Related
Person (other than compensation and benefits and advancement of expenses, in each case, provided in the ordinary course of business
consistent with past practice); or</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxiii)  &nbsp;
authorize or agree to do any of the foregoing actions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Section 5.3    <U>Conduct
of Business of LLIT.</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)   &nbsp;
Unless Newegg (acting through the Newegg Special Committee) shall otherwise consent in writing (such consent not to be unreasonably
withheld, conditioned or delayed), during the Interim Period, except as expressly contemplated by this Agreement, LLIT shall, and
shall cause LLIT Subsidiaries to, (i) conduct their respective businesses, in all material respects, in the ordinary course of
business consistent with past practice, (ii)&nbsp;comply with all Laws applicable to LLIT, LLIT Subsidiaries, and their respective
businesses, assets and employees, (iii) settle any and all pending or threatened Actions, lawsuits and/or proceedings involving
any LLIT Entity, its current or former directors, officers or equity holders in connection with any fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act or transaction existing prior
to the Closing Date, and (iv) take all reasonable measures necessary or appropriate to preserve intact, in all material respects,
their respective business organizations, to keep available the services of their respective managers, directors, officers, employees
and consultants, to maintain, in all material respects, their existing relationships with all Top Customers and Top Suppliers,
and to preserve the possession, control and condition of their respective material assets, all as consistent with past practice.
Unless Newegg (acting through the Newegg Special Committee) shall otherwise consent in writing (such consent not to be unreasonably
withheld, conditioned or delayed), during the Interim Period, (i)&nbsp;Merger Sub shall not take any actions which are not expressly
contemplated by this Agreement or necessary for the consummation of the transactions contemplated hereby, (ii) LLIT and its Subsidiaries
(excluding Lianluo Connection) shall not reduce their consolidated working capital (as determined in accordance with GAAP) by more
than $1,000,000 during the Interim Period, and (iii) LLIT and its Subsidiaries (excluding Lianluo Connection) shall not reduce
their consolidated net assets (measured as the sum of their assets minus their liabilities, each as determined in accordance with
GAAP) by more than $1,000,000 during the Interim Period, except for any deviations from any of the foregoing clauses (ii) or (iii)
due to expenses which are strictly necessary for the consummation of the transactions contemplated herein or for maintenance of
LLIT&rsquo;s status as an SEC reporting company with LLIT Class A Shares listed on NASDAQ.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)   &nbsp;
Without limiting the generality of&nbsp;<U>Section 5.3(a)</U>&nbsp;and except as specifically contemplated by the terms of this
Agreement (including or in connection with the transactions contemplated by&nbsp;<U>Sections 5.3(b)(iii)</U> and <U>5.18</U>&nbsp;hereof)
during the Interim Period, without the prior written consent of Newegg (acting through the Newegg Special Committee) (such consent
not to be unreasonably withheld, conditioned or delayed), LLIT shall not, and shall cause LLIT Subsidiaries to not:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(i)   &nbsp;
except as set forth in the Form F-4 or to maintain compliance with the minimum bid price requirements of the NASDAQ Capital Market,
or to give effect to this Agreement and the transactions contemplated hereby, amend, waive or otherwise change, in any respect,
its Organizational Documents;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(ii)   &nbsp;except
for the issuance and sale of LLIT Class A Shares upon the exercise of LLIT options or warrants outstanding as of the date hereof
which are described in <U>Schedule 3.5(c)</U>, authorize for issuance, issue, grant, sell, pledge, dispose of or propose to issue,
grant, sell, pledge or dispose of any of its equity securities or any options, warrants, commitments, subscriptions or rights of
any kind to acquire or sell any of its equity securities, or other securities, including any securities convertible into or exchangeable
for any of its equity securities or other security interests of any class and any other equity-based awards, or engage in any hedging
transaction with a third Person with respect to such securities.</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(iii)   &nbsp;
except as set forth in the Form F-4 or to maintain compliance with the minimum bid price requirements of the NASDAQ Capital Market,
split, combine, recapitalize or reclassify any of its shares or other equity interests or issue any other securities in respect
thereof or pay or set aside any dividend or other distribution (whether in cash, equity or property or any combination thereof)
in respect of its shares or other equity interests, or directly or indirectly redeem, purchase or otherwise acquire or offer to
acquire any of its securities;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(iv) &nbsp; except for accounts payable incurred in the ordinary
course of business that are necessary to maintain LLIT&rsquo;s public listing or to implement the transactions contemplated hereby,
incur, create, assume or otherwise become liable for any Indebtedness (directly, contingently or otherwise) or Liability that
LLIT or any of its then current Subsidiaries would be liable for after the Disposition, make a loan or advance to or investment
in any third party, or guarantee or endorse any Indebtedness, Liability or obligation of any Person, or prepay any Indebtedness
of Liability;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(v)   &nbsp;
make or rescind any material election relating to Taxes, settle any claim, action, suit, litigation, proceeding, arbitration, investigation,
audit or controversy relating to Taxes, file any amended Tax Return or claim for refund, or make any material change in its accounting
or Tax policies or procedures, in each case except as required by applicable Law or in compliance with GAAP;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(vi)   &nbsp;
terminate, waive or assign any material right under any material agreement to which it is a party;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(vii)   &nbsp;
fail to maintain its books, accounts and records in all material respects in the ordinary course of business consistent with past
practice;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(viii)   &nbsp;
establish any Subsidiary or enter into any new line of business;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(ix)   &nbsp;
fail to use commercially reasonable efforts to keep in force insurance policies or replacement or revised policies providing insurance
coverage with respect to its assets, operations and activities in such amount and scope of coverage as are currently in effect;</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(x)   &nbsp;
revalue any of its material assets or make any change in accounting methods, principles or practices, except to the extent required
to comply with GAAP and after consulting with LLIT&rsquo;s outside auditors;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xi)   &nbsp;
waive, release, assign, settle or compromise any claim, Action or proceeding (including any suit, Action, claim, proceeding or
investigation relating to this Agreement or the transactions contemplated hereby), or otherwise pay, discharge or satisfy any Actions,
Liabilities or obligations, unless such amount has been reserved in the LLIT Financials;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.25in; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xii)   &nbsp;
acquire, including by merger, consolidation, acquisition of stock or assets, or any other form of business combination, any corporation,
partnership, limited liability company, other business organization or any division thereof, or any material amount of assets outside
the ordinary course of business consistent with past practice;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.25in; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xiii)   &nbsp;
make or incur any expenditures in excess of $50,000 individually (or for any set of related expenditures) or $250,000 in the aggregate,
other than expenditures which are paid for by Lianluo Connection which are strictly necessary and in the ordinary course of business
of Lianluo Connection or expenses which are strictly necessary for the consummation of the transactions contemplated herein or
to maintain LLIT&rsquo;s status as an SEC reporting company with LLIT Class A Shares listed on NASDAQ;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xiv)   &nbsp;
adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization
except as contemplated herein and set forth in the Form F-1 and Form F-4;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.25in; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xv)   &nbsp;
other than the Disposition, sell, lease, license, transfer, exchange or swap, mortgage or otherwise pledge or encumber (including
securitizations), or otherwise dispose of any portion of its properties, assets or rights;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.25in; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xvi)   &nbsp;
other than the Support Agreements, enter into any agreement, understanding or arrangement with respect to the voting of the equity
securities of LLIT;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xvii) &nbsp;take any action that would reasonably be expected
to significantly delay or impair the obtaining of any Consents of any Governmental Authority to be obtained in connection with
this Agreement;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xviii)   &nbsp;
increase the wages, salaries or compensation of its employees other than in the ordinary course of business, consistent with past
practice, and in any event not in the aggregate by more than five percent (5%), or make or commit to make any bonus or other payment
(whether in cash, property or securities) to any employee, or materially increase other benefits of employees generally, or enter
into, establish, materially amend or terminate any of LLIT&rsquo;s or a LLIT Subsidiary&rsquo;s Benefit Plan with, for or in respect
of any current consultant, officer, manager director or employee, in each case other than as required by applicable Law, pursuant
to the terms of any of LLIT&rsquo;s or a LLIT Subsidiary&rsquo;s Benefit Plans or in the ordinary course of business consistent
with past practice;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xix)   &nbsp;
other than the Disposition, transfer or license to any Person or otherwise extend, materially amend or modify, permit to lapse
or fail to preserve any of LLIT&rsquo;s or a LLIT Subsidiary&rsquo;s Registered IP, IP Licenses or other Intellectual Property,
if any, or disclose to any Person who has not entered into a confidentiality agreement any Trade Secrets;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xx)  &nbsp;
other than the Disposition, close or materially reduce its or any LLIT Subsidiary&rsquo;s activities, or effect any layoff or other
personnel reduction or change, at any of their respective facilities;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.25in; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxi)  &nbsp;
enter into, amend, waive or terminate (other than terminations in accordance with their terms) any transaction with any Related
Person;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxii)  &nbsp;
transfer any cash in excess of $1,000,000 from LLIT to any of its Subsidiaries (other than Merger Sub); or</P>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">&nbsp;</P>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1.5in">(xxiii)   &nbsp;
authorize or agree to do any of the foregoing actions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 5.4    <U>Annual
and Interim Financial Statements</U>. From the date hereof through the Closing Date, within thirty (30) calendar days following
the end of each three-month quarterly period and each fiscal year, Newegg shall deliver to LLIT an unaudited consolidated income
statement and an unaudited consolidated balance sheet for the period from the date of the most recent audited Newegg Financials
through the end of such quarterly period or fiscal year and the applicable comparative period in the preceding fiscal year, in
each case accompanied by certificates of the Chief Financial Officer and Chief Executive Officer of Newegg to the effect that all
such financial statements fairly present in all material respects the consolidated financial position and results of operations
of the Newegg Subsidiaries as of the date or for the periods indicated, in accordance with GAAP, subject to year-end audit adjustments
and excluding footnotes. From the date hereof through the Closing Date, Newegg will also promptly deliver to LLIT copies of any
audited consolidated financial statements of Newegg and its Subsidiaries that Newegg&rsquo;s certified public accountants may issue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 5.5    <U>LLIT
Public Filings</U>. During the Interim Period, LLIT will keep current and timely file all of its public filings with the SEC (including
any extension periods that may be applicable) and otherwise comply in all material respects with applicable securities Laws and
shall use its commercially reasonable efforts to maintain the listing of LLIT Class A Shares on NASDAQ.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Section 5.6    <U>Go
Shop</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)   &nbsp;
During the Interim Period, each Party may and may cause its Representatives to, directly or indirectly, (i) solicit, assist, initiate
or facilitate the making, submission or announcement of, or intentionally encourage, any Acquisition Proposal, (ii) furnish any
non-public information regarding such Party or its Affiliates or their respective businesses, operations, assets, Liabilities,
financial condition, prospects or employees to any Person or group in connection with or in response to an Acquisition Proposal,
(iii) engage or participate in discussions or negotiations with any Person or group with respect to, or that could be expected
to lead to, an Acquisition Proposal, (iv) approve, endorse or recommend, or publicly propose to approve, endorse or recommend,
any Acquisition Proposal, (v) negotiate or enter into any letter of intent, agreement in principle, acquisition agreement or other
similar agreement related to any Acquisition Proposal, or (vi) release any third Person from, or waive any provision of, any confidentiality
agreement to which such Party is a party.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)   &nbsp;
Each Party shall notify the others as promptly as practicable (and in any event within 48 hours) orally and in writing of the receipt
by such Party or any of its Representatives of (i) any bona fide inquiries, proposals or offers, requests for information or requests
for discussions or negotiations regarding or constituting any Acquisition Proposal or any bona fide inquiries, proposals or offers,
requests for information or requests for discussions or negotiations that could be expected to result in an Acquisition Proposal,
and (ii) any request for non-public information relating to such Party or its Affiliates (or any Newegg Subsidiary), specifying
in each case, the material terms and conditions thereof (including a copy thereof if in writing or a written summary thereof if
oral) and the identity of the party making such inquiry, proposal, offer or request for information. Each Party shall keep the
others promptly informed of the status of any such inquiries, proposals, offers or requests for information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 5.7    <U>No
Trading</U>. Newegg acknowledges and agrees that it is aware, and that Newegg&rsquo;s Affiliates are aware (and each of their respective
Representatives is aware or, upon receipt of any material nonpublic information of LLIT, will be advised) of the restrictions imposed
by the Federal Securities Laws and other applicable foreign and domestic Laws on a Person possessing material nonpublic information
about a publicly traded company. Newegg hereby agrees that, while it is in possession of such material nonpublic information, it
shall not purchase or sell any securities of LLIT (other than acquire the LLIT Exchange Shares in accordance with <U>Article I</U>),
communicate such information to any third party, take any other action with respect to LLIT in violation of such Laws, or cause
or encourage any third party to do any of the foregoing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 5.8    <U>Notification
of Certain Matters</U>. During the Interim Period, each of the Parties shall give prompt notice to the other Parties if such Party
or its Affiliates (or with respect to LLIT, including any LLIT Subsidiary): (a) fails to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it or its Affiliates hereunder in any material respect; (b) receives any notice
or other communication in writing from any third party (including any Governmental Authority) alleging (i) that the Consent of
such third party is or may be required in connection with the transactions contemplated by this Agreement or (ii) any non-compliance
with any Law by such Party or its Affiliates; (c) receives any notice or other communication from any Governmental Authority in
connection with the transactions contemplated by this Agreement; (d) discovers any fact or circumstance that, or becomes aware
of the occurrence or non-occurrence of any event the occurrence or non-occurrence of which, would reasonably be expected to cause
or result in any of the conditions set forth in&nbsp;<U>Article VIII</U>&nbsp;to not being satisfied or the satisfaction of those
conditions being materially delayed; or (e) becomes aware of the commencement or threat, in writing, of any Action against such
Party or any of its Affiliates or any of their respective properties or assets, or, to the Knowledge of such Party, any officer,
director, partner, member or manager, in his, her or its capacity as such, of such Party or of its Affiliates with respect to the
consummation of the transactions contemplated by this Agreement. No such notice shall constitute an acknowledgement or admission
by the Party providing the notice regarding whether or not any of the conditions to the Closing have been satisfied or in determining
whether or not any of the representations, warranties or covenants contained in this Agreement have been breached.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Section 5.9    <U>Efforts</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)   &nbsp;
Subject to the terms and conditions of this Agreement, each Party shall use its commercially reasonable efforts, and shall cooperate
fully with the other Parties, to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable Laws and regulations to consummate the transactions contemplated by this Agreement (including
the receipt of all applicable Consents of Governmental Authorities) and to comply as promptly as practicable with all requirements
of Governmental Authorities applicable to the transactions contemplated by this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)   &nbsp;
Prior to the Closing, each Party shall use its commercially reasonable efforts to obtain any Consents of Governmental Authorities
or other third Persons as may be necessary for the consummation by such Party or its Affiliates of the transactions contemplated
by this Agreement or required as a result of the execution or performance of, or consummation of the transactions contemplated
by, this Agreement by such Party or its Affiliates, and the other Parties shall provide reasonable cooperation in connection with
such efforts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c)   &nbsp;
Notwithstanding anything herein to the contrary, no Party shall be required to agree to any term, condition or modification with
respect to obtaining any Consents in connection with the transactions contemplated by this Agreement that would result in, or would
be reasonably likely to result in: (i) a Material Adverse Effect to such Party or its Affiliates, or (ii) such Party or its Affiliates
having to cease, sell or otherwise dispose of any material assets or businesses (including the requirement that any such assets
or business be held separate).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 5.10
&nbsp;<U>Further Assurances</U>. The Parties hereto shall further cooperate with each other and use their respective commercially
reasonable efforts to take or cause to be taken all actions, and do or cause to be done all things, necessary, proper or advisable
on their part under this Agreement and applicable Laws to consummate the transactions contemplated by this Agreement as soon as
practicable, including preparing and filing as soon as practicable all documentation to effect all necessary notices, reports and
other filings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Section 5.11   &nbsp;<U>Form
F-4</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)   &nbsp;
As promptly as practicable after the date hereof, LLIT shall prepare and file with the SEC the Merger Registration Statement for
the LLIT Exchange Shares to be issued in connection with the Merger, and the Shareholder Meeting Notice on the Form F-4 (as amended
or supplemented from time to time) calling a special meeting of LLIT&rsquo;s shareholders (including any adjournments or postponements
thereof) (the &ldquo;<U>Shareholder Meeting</U>&rdquo;) seeking the approval of LLIT&rsquo;s shareholders for the matters in connection
with the Restructure and Offering, in accordance with and as required by LLIT&rsquo;s Organizational Documents, applicable Law
and any applicable rules and regulations of the SEC and NASDAQ. In the Form F-4, LLIT shall seek (i) adoption and approval of the
Disposition Agreement and the transactions contemplated thereby in accordance with LLIT&rsquo;s Organizational Documents, the BVI
Act and the rules and regulations of the SEC and NASDAQ, (ii) if required to be approved by LLIT&rsquo;s shareholders, adoption
and approval of an Amended and Restated Memorandum and Articles of Association of LLIT in the form attached as <U>Exhibit C</U>,
together with such other changes which are reasonably acceptable to LLIT and Newegg (the &ldquo;<U>Amended Charter</U>&rdquo;)
(which will be adopted by LLIT prior to or at the time of the Closing to, among other things, effect the Stock Split, increase
the authorized amount of LLIT Shares, change the name of LLIT and provide certain director appointment rights for certain holders
of Newegg Shares), (iii) to appoint the members of the board of directors of LLIT, and appoint the members of any committees thereof,
in each case in accordance with&nbsp;<U>Section 5.16</U>&nbsp;hereof, and (iv) to obtain any and all other approvals necessary
or advisable to effect the consummation of the transactions contemplated by this Agreement and the Ancillary Documents, including
approval of the Merger and this Agreement. In connection with the Form F-4, LLIT will also furnish with the SEC financial and other
information about the transactions contemplated by this Agreement in accordance with applicable rules set forth in LLIT&rsquo;s
Organizational Documents, the BVI Act and the rules and regulations of the SEC and NASDAQ. In consultation with Newegg, LLIT shall
set a preliminary record date for the Shareholder Meeting and commence a broker search in connection therewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b) &nbsp; Except with respect to the Newegg Information for
inclusion or incorporation by reference in the Form F-4, LLIT shall ensure that, when furnished, the Form F-4 will comply in all
material respects with the requirements of the Exchange Act and the rules and regulations thereunder. LLIT shall cause the Shareholder
Meeting Notice to be disseminated as promptly as practicable to LLIT&rsquo;s equity holders as and to the extent such dissemination
is required by U.S. federal securities laws and the rules and regulations of the SEC and NASDAQ promulgated thereunder or otherwise
(the &ldquo;<U>Federal Securities Laws</U>&rdquo;). Newegg shall promptly provide to LLIT such information concerning the Newegg
Subsidiaries and their respective businesses, operations, condition (financial or otherwise), assets, Liabilities, properties,
officers, directors and employees as is either required by Federal Securities Laws or reasonably requested by LLIT for inclusion
in the Shareholder Meeting Notice. Subject to compliance by Newegg with the immediately preceding sentence with respect to the
information provided or to be provided by or on behalf of them for inclusion in the Shareholder Meeting Notice, LLIT shall cause
the Shareholder Meeting Notice to comply in all material respects with the Federal Securities Laws. LLIT shall provide copies
of the proposed forms of the Shareholder Meeting Notice (including any amendments or supplements thereto) to Newegg such that
Newegg and its Representatives are afforded a reasonable amount of time prior to the dissemination or filing thereof to review
such material and comment thereon prior to such dissemination or submission, and LLIT shall reasonably consider in good faith
any comments of such Persons. LLIT and Newegg and their respective Representatives shall respond promptly to any comments of the
SEC or its staff with respect to the Shareholder Meeting Notice and promptly correct any information provided by it for use in
the Shareholder Meeting Notice if and to the extent that such information shall have become false or misleading in any material
respect or as otherwise required by the Federal Securities Laws. LLIT shall amend or supplement the Shareholder Meeting Notice
and cause the Shareholder Meeting Notice, as so amended or supplemented, to be furnished to the SEC and to be disseminated to
the holders of LLIT Shares, in each case as and to the extent required by the Federal Securities Laws and subject to the terms
and conditions of this Agreement and LLIT Organizational Documents. LLIT shall provide Newegg and its Representatives with copies
of any written comments, and shall inform them of any material oral comments, that LLIT or any of its Representatives receive
from the SEC or its staff with respect to the Shareholder Meeting Notice promptly after the receipt of such comments and shall
give Newegg a reasonable opportunity under the circumstances to review and comment on any proposed written or material oral responses
to such comments. LLIT shall use its commercially reasonable efforts to cause the Form F-4 to &ldquo;clear&rdquo; comments from
the SEC and its staff and to permit Newegg and its Representatives to participate with LLIT or its Representatives in any discussions
or meetings with the SEC and its staff. Newegg shall, and shall cause each of the Newegg Subsidiaries to, make their respective
directors, officers and employees, upon reasonable advance notice, available to LLIT and its Representatives in connection with
the drafting of the public filings with respect to the transactions contemplated by this Agreement, including the Shareholder
Meeting Notice, and responding in a timely manner to comments from the SEC. LLIT shall call the Shareholder Meeting as promptly
as reasonably practicable after the Form F-4 has &ldquo;cleared&rdquo; comments from the SEC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c)   &nbsp;
If at any time prior to the Closing, any information relating to the LLIT Entities, on the one hand, or Newegg and the Newegg Subsidiaries,
on the other hand, or any of their respective Affiliates, businesses, operations, condition (financial or otherwise), assets, Liabilities,
properties, officers, directors or employees, should be discovered by LLIT, on the one hand, or Newegg, on the other hand, that
should be set forth in an amendment or supplement to the Shareholder Meeting Notice, so that such documents would not include any
misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, the Party which discovers such information shall promptly notify each other Parties
and an appropriate amendment or supplement describing such information shall be promptly furnished to the SEC and, to the extent
required by law, disseminated to LLIT&rsquo;s shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(d)   &nbsp;
The Shareholder Meeting Notice shall contain the recommendation of the LLIT Board and the LLIT Special Committee for the LLIT shareholders
to approve all proposals presented at the Shareholders Meeting, and such recommendation shall not be withdrawn, modified or changed
except pursuant to <U>Section 7.1(c)(iii)</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 5.12
&nbsp;<U>Public Announcements</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)   &nbsp;
The Parties agree that no public release, filing or announcement concerning this Agreement or the Ancillary Documents or the transactions
contemplated hereby or thereby shall be issued by any Party or any of their Affiliates without the prior written consent of LLIT
(acting through the LLIT Special Committee) and Newegg (acting through the Newegg Special Committee) (which consent shall not be
unreasonably withheld, conditioned or delayed), except as such release or announcement may be required by applicable Law or the
rules or regulations of any securities exchange, in which case the applicable Party shall use commercially reasonable efforts to
allow the other Parties reasonable time to comment on, and arrange for any required filing with respect to, such release or announcement
in advance of such issuance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)   &nbsp;
The Parties shall mutually agree upon and, as promptly as practicable after the execution of this Agreement (but in any event within
four (4) Business Days thereafter), issue a press release announcing the execution of this Agreement (the &ldquo;<U>Signing Press
Release</U>&rdquo;). Promptly after the issuance of the Signing Press Release, LLIT shall furnish to the SEC a Foreign Private
Issuer Report on Form 6-K (the &ldquo;<U>Signing Filing</U>&rdquo;) with the Signing Press Release and a description of this Agreement
as required by Federal Securities Laws, which Newegg shall review, comment upon and approve (which approval shall not be unreasonably
withheld, conditioned or delayed) prior to filing (with LLIT providing the draft Signing Filing to Newegg on the date of the execution
of this Agreement and Newegg reviewing, commenting upon and approving such Signing Filing in any event no later than the second
(2<SUP>nd</SUP>) Business Day after the execution of this Agreement). The Parties shall mutually agree upon and, as promptly as
practicable after the Closing (but in any event within four (4) Business Days thereafter), issue a press release announcing the
consummation of the transactions contemplated by this Agreement (the &ldquo;<U>Closing Press Release</U>&rdquo;). Promptly after
the issuance of the Closing Press Release, LLIT shall furnish to the SEC a Foreign Private Issuer Report on Form 6-K (the &ldquo;<U>Closing
Filing&rdquo;)</U> with the Closing Press Release and a description of the Closing as required by Federal Securities Laws which
Newegg shall review, comment upon and approve (which approval shall not be unreasonably withheld, conditioned or delayed) prior
to filing (with the Newegg reviewing, commenting upon and approving such Closing Filing in any event no later than the second (2<SUP>nd</SUP>)
Business Day after the Closing). In connection with the preparation of the Signing Press Release, the Signing Filing, the Closing
Filing, the Closing Press Release, or any other report, statement, filing notice or application made by or on behalf of a Party
to any Governmental Authority or other third party in connection with the transactions contemplated hereby, each Party shall, upon
request by any other Party, furnish the Parties with all information concerning themselves, their respective directors, officers
and equity holders, and such other matters as may be reasonably necessary or advisable in connection with the transactions contemplated
hereby, or any other report, statement, filing, notice or application made by or on behalf of a Party to any third party and/ or
any Governmental Authority in connection with the transactions contemplated hereby.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Section 5.13   &nbsp;<U>Confidential
Information</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)   &nbsp;
Newegg (prior to the Closing) hereby agrees that during the Interim Period and, in the event this Agreement is terminated in accordance
with&nbsp;<U>Article IX</U>, for a period of two (2) years after such termination, they shall, and shall cause their respective
Representatives to: (i) treat and hold in strict confidence any LLIT Confidential Information, and will not use it for any purpose
(except in connection with the consummation of the transactions contemplated by this Agreement or the Ancillary Documents, performing
their obligations hereunder or thereunder, enforcing their rights hereunder or thereunder, or in furtherance of their authorized
duties on behalf of LLIT or its Subsidiaries), nor directly or indirectly disclose, distribute, publish, disseminate or otherwise
make available to any third party any of LLIT Confidential Information without LLIT&rsquo;s prior written consent; and (ii) in
the event that Newegg (prior to the Closing), or any of the respective Representatives becomes legally compelled to disclose any
LLIT Confidential Information, (A) provide LLIT with prompt written notice of such requirement so that LLIT or an Affiliate thereof
may seek a protective order or other remedy or waive compliance with this&nbsp;<U>Section 5.13(a)</U>, and (B)&nbsp;in the event
that such protective order or other remedy is not obtained, or LLIT waives compliance with this&nbsp;<U>Section 5.13(a)</U>, furnish
only that portion of such LLIT Confidential Information which is legally required to be provided as advised in writing by outside
counsel and to exercise its commercially reasonable efforts to obtain assurances that confidential treatment will be accorded such
LLIT Confidential Information. In the event that this Agreement is terminated and the transactions contemplated hereby are not
consummated, Newegg shall cause their respective Representatives to, promptly deliver to LLIT any and all copies (in whatever form
or medium) of LLIT Confidential Information and destroy all notes, memoranda, summaries, analyses, compilations and other writings
related thereto or based thereon. If this Agreement is terminated and the transactions contemplated hereby are not contemplated,
and Newegg acknowledge and agree that their ability to transact trades in the securities of LLIT may be limited for so long as
information disclosed and Newegg constitutes material nonpublic information. Subject to <U>Section 5.13(a)(ii)</U>, Newegg and
its Representatives shall be permitted to disclose any and all LLIT Confidential Information in connection with the transactions
contemplated by this Agreement or the Ancillary Documents to the extent required by applicable Laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b) &nbsp; LLIT hereby agrees that during the Interim Period
and, in the event this Agreement is terminated in accordance with&nbsp;<U>Article IX</U>, for a period of two (2) years after
such termination, it (including each of its Affiliates) shall, and shall cause its Representatives to: (i) treat and hold in strict
confidence any Newegg Confidential Information, and will not use for any purpose (except in connection with the consummation of
the transactions contemplated by this Agreement or the Ancillary Documents, performing its obligations hereunder or thereunder
or enforcing its rights hereunder or thereunder), nor directly or indirectly disclose, distribute, publish, disseminate or otherwise
make available to any third party any of Newegg Confidential Information without Newegg&rsquo;s prior written consent; and (ii)
in the event that LLIT or any of its Representatives becomes legally compelled to disclose any Newegg Confidential Information,
(A) provide Newegg with prompt written notice of such requirement so that Newegg, or an Affiliate of any of them may seek a protective
order or other remedy or waive compliance with this&nbsp;<U>Section 5.13(b)</U>, and (B) in the event that such protective order
or other remedy is not obtained, or Newegg waives compliance with this&nbsp;<U>Section 5.13(b)</U>, furnish only that portion
of such Newegg Confidential Information which is legally required to be provided as advised in writing by outside counsel and
to exercise its commercially reasonable efforts to obtain assurances that confidential treatment will be accorded such Newegg
Confidential Information. In the event that this Agreement is terminated and the transactions contemplated hereby are not consummated,
LLIT shall, and shall cause its Representatives to, promptly deliver to Newegg any and all copies (in whatever form or medium)
of Newegg Confidential Information and destroy all notes, memoranda, summaries, analyses, compilations and other writings related
thereto or based thereon. Notwithstanding the foregoing, LLIT and its Representatives shall be permitted to disclose any and all
Newegg Confidential Information in connection with the transactions contemplated by this Agreement or the Ancillary Documents
to the extent required by the Federal Securities Laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 5.14
&nbsp;<U>Litigation Support</U>. Following the Closing, in the event that and for so long as any Party is actively contesting or
defending against any third party or Governmental Authority Action in connection with any fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action, failure to act or transaction existing on or prior to
the Closing Date involving LLIT or any Newegg Subsidiary, each of the other Parties will (i) reasonably cooperate with the contesting
or defending Party and its counsel in the contest or defense, (ii) make available its personnel at reasonable times and upon reasonable
notice and (iii) provide (A) such testimony and (B) access to its non-privileged books and records as may be reasonably requested
in connection with the contest or defense, at the sole cost and expense of the contesting or defending Party.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 5.15
&nbsp;<U>Documents and Information</U>. After the Closing Date, LLIT and the Newegg Subsidiaries shall, and shall cause their respective
Subsidiaries to, until the seventh (7<SUP>th</SUP>) anniversary of the Closing Date, retain all books, records and other documents
pertaining to the business of the Newegg Subsidiaries in existence on the Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Section 5.16   <U>Stock
Exchange Listing</U>. LLIT shall, with the assistance and cooperation of Newegg, take commercially reasonable efforts to (a) submit
the Listing of Additional Shares Notification to NASDAQ, if such listing of Additional Shares Notification is applicable, and (b)
ensure that immediately prior to the Closing, the Company shall have not received any information indicating that the listing of
such shares is or will be rejected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Section 5.17   <U>LLIT
Policies</U>. During the Interim Period, LLIT will consult with Newegg, and LLIT and Newegg will adopt, effective as of the Closing,
corporate and operational policies for LLIT, Newegg and their respective Subsidiaries, including the Newegg Subsidiaries, appropriate
for a company publicly traded in the United States with active business and operations in the industries and regions in which the
Newegg Subsidiaries operate and contemplate operating as of the Closing. Such policies will include a conflicts of interest policy
establishing, among other matters, proper procedures and limitations for related party loans involving LLIT or the Newegg Subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 5.18 <U>Disposition
Transaction</U>. LLIT shall take and cause to be taken all actions necessary so that the Disposition shall be consummated on the
Closing Date, immediately after the Effective Time. Upon consummation of the Disposition, except as set forth in <U>Schedule 5.18</U>,
neither LLIT nor the Surviving Corporation shall have any obligations or liabilities, contingent or otherwise, relating to Lianluo
Connection and shall have no affiliation with any LLIT Subsidiaries other than the Surviving Corporation. During the Interim Period,
any waiver, amendment, termination, or other material decision with respect to the Disposition which could impact LLIT after the
Closing shall be determined by the LLIT Special Committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 5.19 <U>Registration
Statement Information</U>. To the extent permitted by Law, Newegg indemnifies and holds harmless LLIT against any losses, claims,
damages, expenses and liabilities as the same are incurred (including reasonable fees and expenses of counsel), related to or arising
out the inclusion or incorporation by reference of the Newegg Information in the Registration Statements; provided that the cumulative
liability of Newegg under this sentence shall not exceed $3,500,000. To the extent permitted by Law, LLIT indemnifies and holds
harmless Newegg against any losses, claims, damages, expenses and liabilities as the same are incurred (including reasonable fees
and expenses of counsel), related to or arising out the inclusion of the LLIT Information in the Registration Statements; provided
that the cumulative liability of LLIT under this sentence shall not exceed the Escrow Amount, and any payments under this sentence
may be made from the Escrow Amount.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 5.20 <U>Parent
Company Loans to LLIT</U>. Any amounts that, as of immediately after the Closing and the Disposition, would be owed or payable
by LLIT or its Subsidiaries (other than the Surviving Corporation) to Hangzhou Lianluo or any of Hangzhou Lianluo&rsquo;s Affiliates,
whether in the form of intercompany payables, loans, or otherwise, shall be converted into additional paid-in capital of LLIT effective
at the Closing. For clarity, this <U>Section 5.21</U> shall not apply to any Indebtedness payable by Lianluo Connection that would
remain with Lianluo Connection after the Disposition or the pledge of Guardion Shares by LLIT to Hangzhou Lianluo to secure the
payment of certain loans owed by Lianluo Connection to Hangzhou Lianluo.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">ARTICLE VI<BR>
<BR>
CONDITIONS PRECEDENT TO THE MERGER</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 6.1    <U>Conditions
to Each Party&rsquo;s Obligations</U>. The obligations of each Party to consummate the transactions described herein shall be subject
to the satisfaction or written waiver (where permissible) by LLIT (acting through the LLIT Special Committee) and Newegg (acting
through the Newegg Special Committee) of the following conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)    <I>Required
LLIT Shareholder Approval</I>. The Merger, the Disposition, the Stock Split and related transactions submitted to the vote of the
shareholders of LLIT at the Shareholder Meeting, excluding the proposal to approve the adjournment of the Shareholder Meeting if
necessary to solicit additional proxies, in accordance with the Shareholder Meeting Notice shall have been approved by the requisite
vote of the shareholders of LLIT at the Shareholder Meeting in accordance with the Shareholder Meeting Notice, which shall in all
cases include the approval of a majority of the LLIT voting interests cast on the relevant proposal which are not beneficially
owned by Hangzhou Lianluo (the &ldquo;<B><I>Required Shareholder Vote</I></B>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)    <I>Requisite
Regulatory Approvals</I>. All Consents or filings required to be obtained from or made with any Governmental Authority in order
to consummate the transactions contemplated by this Agreement, shall have been obtained or made. LLIT shall effect the Stock Split
on, or prior to, the Closing Date if required by NASDAQ rules in connection with the listing of LLIT on the NASDAQ following the
Closing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c)    <I>Requisite
Consents</I>. The Consents required to be obtained from or made with any third Person (other than a Governmental Authority) in
order to consummate the transactions contemplated by this Agreement as set forth in&nbsp;<U>Schedule 6.1(c)</U>&nbsp;shall have
each been obtained or made.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(d)    <I>No
Legal Prohibition</I>. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law (whether
temporary, preliminary or permanent) or Order that is then in effect and which has the effect of making the transactions or agreements
contemplated by this Agreement or the Disposition Agreement illegal or which otherwise prevents or prohibits consummation of the
transactions contemplated by this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(e)    <I>No
Litigation</I>. There shall not be any pending Action brought by a third-party non-Affiliate to enjoin or otherwise restrict the
consummation of the Closing or the closing of the Disposition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(f)    <I>Appointment
to the Board</I>. The members of LLIT&rsquo;s board of directors shall have been elected or appointed to LLIT&rsquo;s board of
directors as of the Closing consistent with the requirements of&nbsp;<U>Section 1.5</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(g)   &nbsp;<I>Disposition
Transaction</I>. All of the conditions to the obligations of each Party to consummate the Disposition described in the Disposition
Agreement shall have been satisfied, other than the Closing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">(h) &nbsp;<I>Opinion of Financial Advisor.
</I>On or prior to the date of this Agreement, The Benchmark Company, LLC (the &ldquo;<U>Financial Advisor</U>&rdquo;) shall have
delivered to the board of LLIT, dated as of the date hereof, to the effect that (subject to various qualifications and assumptions)
the Merger Consideration was fair, from a financial point of view, to the holders of LLIT Shares (the &ldquo;<U>Fairness Opinion</U>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(i)   &nbsp;<I>Form
F-4</I>. The Form F-4 shall have become effective under the Securities Act and shall not be the subject of any stop order or proceedings
seeking a stop order.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(j)   &nbsp;<I>Form
F-1</I>. The Form F-1 shall have become effective under the Securities Act and shall not be the subject of any stop order or proceedings
seeking a stop order.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(k)    &nbsp;<I>Simultaneous
Closing.</I> The Offering and Disposition are capable of being consummated on the Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(l)   &nbsp;<I>Amendment
of Newegg Stockholder Agreement</I>. The certain amendment to the Stockholder Agreement, dated March 30, 2017, between Newegg and
certain stockholders of Newegg that is being entered into concurrently herewith shall be in full force and effect and shall be
assigned from Newegg to LLIT at the Closing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 6.2    <U>Conditions
to Obligations of LLIT and Merger Sub</U>. In addition to the conditions specified in&nbsp;<U>Section 6.1</U>, the obligations
of LLIT and Merger Sub to consummate the transactions contemplated by this Agreement are subject to the satisfaction or written
waiver (by LLIT acting through the LLIT Special Committee) of the following conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a) <I>Representations and Warranties</I>. All of the representations
and warranties of Newegg (including Newegg Subsidiaries) set forth in this Agreement and in any certificate delivered by Newegg
pursuant hereto shall be true and correct on and as of the date of this Agreement and on and as of the Closing Date as if made
on the Closing Date, except for (i) those representations and warranties that address matters only as of a particular date (which
representations and warranties shall have been accurate as of such date), and (ii) any failures to be true and correct that (without
giving effect to any qualifications or limitations as to materiality or Material Adverse Effect), individually or in the aggregate,
have not had and would not reasonably be expected to have a Material Adverse Effect on, or with respect to, Newegg and any Newegg
Subsidiary or materially and adversely affect Newegg&rsquo;s ability to consummate the transactions contemplated hereby.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)    <I>Agreements
and Covenants</I>. Newegg shall have performed in all material respects all of Newegg&rsquo;s obligations and complied in all material
respects with all of Newegg&rsquo;s agreements and covenants under this Agreement to be performed or complied with by it on or
prior to the Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c)    <I>No
Material Adverse Effect</I>. No Material Adverse Effect shall have occurred and be continuing with respect to Newegg and its Subsidiaries,
taken as a whole, since the date of this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(d)   &nbsp;
<I>Closing Deliveries.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(i)    <I>Officer
Certificate</I>. Newegg shall have delivered to LLIT and Merger Sub a certificate, dated the Closing Date, signed by an executive
officer of Newegg in such capacity, certifying as to the satisfaction of the conditions specified in&nbsp;<U>Sections 6.3(a)</U>,&nbsp;<U>6.3(b)</U>&nbsp;and&nbsp;<U>6.3(c)</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(ii)    <I>Secretary
Certificate</I>. Newegg shall have delivered to LLIT and Merger Sub a certificate from its secretary certifying as to (A) copies
of Newegg&rsquo;s Organizational Documents as in effect as of the Closing Date, (B) the resolutions of Newegg&rsquo;s board of
directors authorizing the execution, delivery and performance of this Agreement and each of the Ancillary Documents to which it
is a party or by which it is bound, and the consummation of the transactions contemplated hereby and thereby, (C) evidence that
the Merger has been approved by the requisite vote of the shareholders of Newegg required under the DGCL, including the approval
of a majority of the Newegg voting interests which are not beneficially owned by Hangzhou Lianluo and (D) the incumbency of officers
authorized to execute this Agreement or any Ancillary Document to which Newegg is or is required to be a party or otherwise bound.</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(iii)    <I>Good
Standing</I>. Newegg shall have delivered to LLIT and Merger Sub a good standing certificate (or similar documents applicable for
such jurisdictions) for Newegg and each Newegg Subsidiary certified as of a date no later than five (5) days prior to the Closing
Date from the proper Governmental Authority of Newegg&rsquo;s and each Newegg Subsidiary&rsquo;s respective jurisdiction of organization
and from each other jurisdiction in which Newegg or such Newegg Subsidiary is qualified to conduct business as a foreign corporation
or other entity as of the Closing, in each case to the extent that good standing certificates or similar documents are generally
available in such jurisdictions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(iv)    <I>Certified
Charter</I>. A copy of Newegg&rsquo;s Certificate of Incorporation, as in effect as of the Closing, certified by the appropriate
Governmental Authority of the Delaware as of a date no more than ten (10) Business Days prior to the Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(v)    <I>Legal
Opinion</I>. Newegg shall have delivered to LLIT and Merger Sub a copy of a duly executed legal opinion addressed to LLIT and Merger
Sub and dated as of the Closing Date from Newegg&rsquo;s legal counsel in form and substance reasonably satisfactory to LLIT and
Merger Sub.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(vi) <I>Resignations</I>.
LLIT and Merger Sub shall have received duly executed written resignations, effective as of the Closing, of the directors and officers
of Newegg prior to the Closing in accordance with <U>Section 1.5</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(e)   &nbsp;
<I>Lock-Up Agreement</I>. The Lock-Up Agreements which are entered into concurrently herewith by and among Newegg, LLIT and any
Newegg stockholders who would hold more than 5% of the LLIT Shares, measured immediately after the Closing (the &ldquo;<U>Lock-Up
Agreement</U>&rdquo;), the form of which is attached as&nbsp;<U>Exhibit D</U>&nbsp;hereto, shall be in full force and effect in
accordance with the terms thereof as of the Closing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 6.3    <U>Conditions
to Obligations of Newegg</U>. In addition to the conditions specified in&nbsp;<U>Section 6.1</U>, the obligations of Newegg to
consummate the transactions contemplated by this Agreement are subject to the satisfaction or written waiver (by Newegg acting
through the Newegg Special Committee) of the following conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)    <I>Representations
and Warranties</I>. All of the representations and warranties of LLIT and the Merger Sub set forth in this Agreement and in any
certificate delivered by LLIT and the Merger Sub pursuant hereto shall be true and correct on and as of the date of this Agreement
and on and as of the Closing Date as if made on the Closing Date, except for (i) those representations and warranties that address
matters only as of a particular date (which representations and warranties shall have been accurate as of such date), and (ii)
any failures to be true and correct that (without giving effect to any qualifications or limitations as to materiality or Material
Adverse Effect), individually and in the aggregate, have not had and would not reasonably be expected to have a Material Adverse
Effect on, or with respect to, LLIT and its Subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)    <I>Agreements
and Covenants</I>. LLIT and the Merger Sub shall have performed in all material respects all of such Party&rsquo;s obligations
and complied in all material respects with all of such Party&rsquo;s agreements and covenants under this Agreement to be performed
or complied with by it on or prior to the Closing Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c)    <I>No
Material Adverse Effect</I>. No Material Adverse Effect shall have occurred with respect to LLIT, the Merger Sub and any LLIT Subsidiary
since the date of this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(d)    <I>Closing
Deliveries</I>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(i)    <I>Officer
Certificate</I>. Newegg shall have received a certificate from LLIT and the Merger Sub, dated as the Closing Date, signed by executive
officers of LLIT and the Merger Sub in such capacity, certifying as to the satisfaction of the conditions specified in&nbsp;<U>Sections
6.2(a)</U>,&nbsp;<U>6.2(b)</U>&nbsp;and&nbsp;<U>6.3(c)</U>.</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(ii)    <I>Secretary
Certificate</I>. Each of LLIT and the Merger Sub shall have delivered to Newegg a certificate from its executive officer certifying
as to (A) copies of LLIT and the Merger Sub&rsquo;s Organizational Documents as in effect as of the Closing Date, (B) the resolutions
of LLIT and the Merger Sub&rsquo;s board of directors and shareholders authorizing the execution, delivery and performance of this
Agreement and each of the Ancillary Documents to which it is a party or by which it is bound, and the consummation of the transactions
contemplated hereby and thereby, and (C) the incumbency of officers authorized to execute this Agreement or any Ancillary Document
to which Newegg is or is required to be a party or otherwise bound.</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(iii)    <I>Good
Standing</I>. LLIT and the Merger Sub shall have delivered to Newegg good standing certificates (or similar documents applicable
for such jurisdictions) for each LLIT Subsidiary certified as of a date no later than five (5) days prior to the Closing Date from
the proper Governmental Authority of the LLIT Subsidiary&rsquo;s jurisdiction of organization and from each other jurisdiction
in which the LLIT Subsidiary is qualified to conduct business as a foreign corporation or other entity as of the Closing, in each
case to the extent that good standing certificates or similar documents are generally available in such jurisdictions.</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(iv)    <I>Employment
Agreements</I>. LLIT shall have executed the employment agreements, in each case effective as of the Closing, in form and substance
reasonably satisfactory to Newegg (the &ldquo;<U>Employment Agreements</U>&rdquo;), between each of the persons set forth&nbsp;<U>Exhibit
B</U>&nbsp;hereto and LLIT.</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(v)    <I>Legal
Opinion</I>. Newegg shall have received from LLIT and the Merger Sub a legal opinion addressed to Newegg and dated as of the Closing
Date from LLIT&rsquo;s legal counsel in form and substance reasonably satisfactory to Newegg.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(vi)   &nbsp;<I>Amended
and Restated Organizational Documents</I>. Newegg shall have received from LLIT a copy of the Amended Charter that will have been
approved by LLIT&rsquo;s shareholders at the Shareholder Meeting.</P>

<P STYLE="text-indent: 0.25in; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(vii)    <I>Board
Resolutions.</I>&nbsp;Newegg shall have received duly executed written resolutions of LLIT Board, in the agreed form, approving
the issuance of LLIT Exchange Shares in exchange for Newegg Shares; and the appointment of the directors and executive officers
(designated by Newegg prior to the Closing) effective as of the Closing in accordance with&nbsp;<U>Section 1.5</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xi)   &nbsp;<I>LLIT&rsquo;s
Investors Approval.</I> If required, the transaction contemplated by this Agreement shall have been approved by the investors pursuant
to certain Securities Purchase Agreements that the investors and LLIT entered into on February 12, February 21 and February 27,
2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(viii) <I>Effectiveness of Certain Ancillary
Documents</I>. Each of the Support Agreements and the Lock-Up Agreements shall be duly executed and delivered and in full force
and effect in accordance with the terms thereof as of the Closing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.75in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(e)    &nbsp;<I>NASDAQ
Listing Status</I>. Immediately prior to the Closing, (a) LLIT shall have been approved by NASDAQ Capital Market for the initial
listing; (b) LLIT shall have not received any notification indicating that the additional listing of LLIT Class A Shares as a result
of the issuance of LLIT Exchange Shares on the NASDAQ Capital Market are or will be rejected and (c) NASDAQ Capital Market has
notified LLIT that the review process for the Listing of Additional Shares Notification for the LLIT Exchange Shares has been completed,
if such listing of Additional Shares Notification is applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 6.4    <U>Frustration
of Conditions</U>. Notwithstanding anything contained herein to the contrary, no Party may rely on the failure of any condition
set forth in this&nbsp;<U>Article VI&nbsp;</U>to be satisfied if such failure was caused by the failure of such Party or its Affiliates
to comply with or perform any of its covenants or obligations set forth in this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">ARTICLE VII<BR>
<BR>
TERMINATION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 7.1 <U>Termination</U>.
This Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time only:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a) by mutual
written consent of LLIT (acting through the LLIT Special Committee) and Newegg (acting through the Newegg Special Committee);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b) by either
LLIT (acting through the LLIT Special Committee) or Newegg (acting through the Newegg Special Committee):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 1in">(i)     if
the Merger shall not have been consummated on or before April 30, 2021 (as extended as set forth below, the &ldquo;<U>Outside Date</U>&rdquo;);&nbsp;<U>provided</U>,&nbsp;<U>however</U>,
that the right to terminate this Agreement under this&nbsp;<U>Section 7.1(b)(i)</U>&nbsp;shall not be available to any Party whose
material breach of a representation, warranty or covenant in this Agreement has been a principal cause of the failure of the Merger
to be consummated on or before the Outside Date; <U>provided further</U> that the Outside Date shall be automatically extended
up to two additional times by one month each time if, on the then current Outside Date (A) all conditions to Closing contained
in <U>Article VI</U> (except for <U>Section 6.3(e)</U>) have been satisfied or waived, or are imminently capable of being satisfied,
(B) <U>Section 6.3(e)</U> is reasonably likely to be satisfied by the Outside Date, as extended, and (C) the Parties have exercised
and continue to exercise their best efforts to satisfy <U>Section 6.3(e)</U>;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 1in">(ii)    &nbsp;if
any Governmental Authority of competent jurisdiction shall have issued an Order or taken any other action permanently restraining,
enjoining or otherwise prohibiting the Merger, and, in each case, such Order or action shall have become final and non-appealable;&nbsp;<U>provided</U>,&nbsp;<U>however</U>,
that the right to terminate under this&nbsp;<U>Section 7.1(b)(ii)</U>&nbsp;shall not be available to any Party whose material breach
of a representation, warranty or covenant in this Agreement has been the principal cause of such action;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 1in">(iii)    if
the Required Shareholder Vote shall not have been obtained at the Shareholder Meeting;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 1in">(iv)     if
any required approval by the Newegg shareholders shall not have been obtained within 5 days after the date hereof; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c) by Newegg
(acting through the Newegg Special Committee) (provided it is not then in material breach of any of its obligations under this
Agreement):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(i)   &nbsp;if
there is any breach of any representation, warranty, covenant or agreement on the part of LLIT or Merger Sub set forth in this
Agreement, or if any representation or warranty of LLIT or Merger Sub shall have become untrue, in either case such that the applicable
conditions set forth in&nbsp;<U>Section 6</U>&nbsp;would not be satisfied; provided, however, if such breach is curable by LLIT
or Merger Sub, then Newegg may not terminate this Agreement under this&nbsp;<U>Section 7.1(c)(i)</U>&nbsp;for so long as LLIT or
Merger Sub continue to exercise their best efforts to cure such breach, unless such breach is not cured within thirty (30) days
after notice of such breach is provided by Newegg to LLIT;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(ii)    &nbsp;if
for any reason LLIT fails to call and hold the Shareholder Meeting within sixty (60) days following the filing of the F-4, unless
such failure is as a result of LLIT responding in good faith to comments on the Form F-4 or the Form F-1 received from the SEC
or comments received from NASDAQ;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 2in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(iii)    &nbsp;if
the LLIT Board (or any subgroup or committee thereof) (A) withdraws, modifies or changes its recommendation of this Agreement or
the Merger in a manner adverse to Newegg or shall have resolved to do any of the foregoing, or (B)&nbsp;approves or recommends,
or proposes to approve or recommend, an Acquisition Proposal; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(iv)    &nbsp;if
the Escrow Amount is not placed into the Escrow Account within five days hereof; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(d) by LLIT
(acting through the LLIT Special Committee) (provided neither it nor its Subsidiaries are then in material breach of any of their
obligations under this Agreement):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(i)   &nbsp;if
there is any breach of any representation, warranty, covenant or agreement on the part of Newegg set forth in this Agreement, or
if any representation or warranty of Newegg shall have become untrue, in either case such that the applicable conditions set forth
in&nbsp;<U>Section 6</U>&nbsp;would not be satisfied; provided, however, if such breach is curable by Newegg, then LLIT may not
terminate this Agreement under this&nbsp;<U>Section 7.1(d)(i)</U>&nbsp;for so long as Newegg continues to exercise its best efforts
to cure such breach, unless such breach is not cured within thirty (30) days after notice of such breach is provided by LLIT to
Newegg; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(ii)   &nbsp;if
the Newegg Board (or any subgroup or committee thereof) (A)&nbsp;withdraws, modifies or changes its recommendation of this Agreement
or the Merger in a manner adverse to LLIT or shall have resolved to do any of the foregoing, or (B) approves or recommends, or
proposes to approve or recommend, an Acquisition Proposal;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(e) by Newegg
(acting through the Newegg Special Committee), if (i) Newegg receives a bona fide written offer prior to the approval of the LLIT
shareholders of the Merger at the Shareholder Meeting, and the Newegg Special Committee determines in good faith (based upon a
written opinion of an independent financial advisor) that such offer constitutes a superior offer to the stockholders of Newegg
(a &ldquo;<U>Newegg Superior Offer</U>&rdquo;) to the terms set forth herein, and (ii) the Newegg Special Committee determines
in good faith (based upon advice of counsel) that, in light of such Newegg Superior Offer, the withdrawal or modification of the
Newegg Board&rsquo;s approval is required in order for the Newegg Board to comply with its fiduciary obligations to Newegg&rsquo;s
stockholders under the DGCL or other applicable law; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(f) by LLIT
(acting through the LLIT Special Committee), if (i) LLIT receives a bona fide written offer prior to the approval of the LLIT shareholders
of the Merger at the Shareholder Meeting, and the LLIT Special Committee determines in good faith (based upon a written opinion
of an independent financial advisor) that such offer constitutes a superior offer for the stockholders of LLIT (a &ldquo;<U>LLIT
Superior Offer</U>&rdquo;) to the terms set forth herein, and (ii) the LLIT Special Committee determines in good faith (based upon
advice of counsel) that, in light of such LLIT Superior Offer, the withdrawal or modification of the LLIT Board&rsquo;s approval
is required in order for the LLIT Board to comply with its fiduciary obligations to LLIT&rsquo;s shareholders under the BVI Act
or other applicable law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The right of any Party hereto to terminate
this Agreement pursuant to this&nbsp;<U>Section 7.1</U>&nbsp;shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any Party hereto, any Person controlling any such Party or any of their respective officers
or directors, whether prior to or after the execution of this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 7.2 <U>Effect
of Termination</U>. In the event of termination of this Agreement by either Newegg or LLIT, as provided in&nbsp;<U>Section 7.1</U>,
this Agreement shall forthwith become void, and there shall be no liability hereunder on the part of LLIT, Newegg and Merger Sub
or their respective officers or directors (except for confidentiality agreements, <U>Section 5.12</U>, <U>Section 5.13</U>, this
<U>Section 7.2</U> and the entirety of&nbsp;<U>Article VII</U>,&nbsp;<U>Article VIII</U> and <U>Article IX</U>, all of which shall
survive the termination);&nbsp;<U>provided</U>,&nbsp;<U>however</U>, that (i) in the event this Agreement is terminated pursuant
to <U>Section 7.1(b)(iii)</U>, <U>Section 7.1(c)</U>, or <U>Section 7.1(f)</U>, LLIT shall immediately pay to Newegg in cash or
by wire transfer of immediately available funds or by disbursement from the Escrow Account, an amount equal to $450,000, and (ii)
in the event this Agreement is terminated pursuant to&nbsp;<U>Section 7.1(b)(iv)</U>, <U>Section 7.1(d)</U> or <U>Section 7.1(e)</U>,
Newegg shall immediately pay LLIT in cash or by wire transfer of immediately available funds an amount equal to $450,000; and&nbsp;<U>provided</U>&nbsp;<U>further</U>&nbsp;that
nothing contained in this&nbsp;<U>Section 7.2</U>&nbsp;shall relieve any Party hereto from any liability for any willful breach
of a representation or warranty contained in this Agreement or the breach of any covenant contained in this Agreement or prevent
a Party from exercising its rights under&nbsp;<U>Section 9.8</U>. During the Interim Period, Newegg agrees to keep $450,000 of
cash available for the payment of the foregoing termination fee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">ARTICLE VIII<BR>
<BR>
SURVIVAL</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 8.1 <U>Representations
and Warranties</U>. The representations and warranties of each Party contained in <U>Article III</U> and <U>Article IV</U> shall
terminate and expire at the Closing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 8.2 <U>Covenants</U>.
The covenants and agreements contained in this Agreement shall survive the Closing until the applicable statute of limitations
has expired or until such covenant or agreement has been fully performed or waived, whichever is later.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">ARTICLE IX<BR>
<BR>
GENERAL PROVISIONS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 9.1 <U>Notices</U>.
All notices and other communications hereunder shall be in writing and shall be deemed given when delivered personally, one day
after being delivered to a nationally recognized overnight courier or on the Business Day received (or the next Business Day if
received after 5:00 p.m. local time or on a weekend or day on which banks are closed) when sent via facsimile (with a confirmatory
copy sent by overnight courier) to the Parties at the following addresses (or at such other address for a Party as shall be specified
by like notice):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt; text-align: left; text-indent: 1in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 55%"><FONT STYLE="font-size: 10pt"><I>If to the LLIT or Merger Sub at or prior to the Closing, to:</I></FONT></TD>
    <TD STYLE="width: 45%"><FONT STYLE="font-size: 10pt"><I>with a copy (which will not constitute notice) to:</I></FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Lianluo Smart Ltd.</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Bevilacqua PLLC</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Room 611, 6th Floor</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">1050 Connecticut Avenue, NW, Suite 500</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">BeiKong Technology Building </FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Attention: Kevin Sun, Esq.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">No. 10 Baifuquan Road, Changping District</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Beijing 102200, People&rsquo;s Republic of China</P></TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Facsimile No.: (202) 869-0889</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Telephone No.: (202) 869-0888 (ext. 101)</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">E mail:&nbsp;kevin@bevilacquapllc.com</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Attention: Yingmei Yang</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Telephone No.: 86-10-89788107</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Email: yangyingmei@lianluo.com</P></TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Kaufman &amp; Canoles, P.C.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Two James Center, 14th Floor</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">1021 E. Cary St.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Richmond, VA 23219</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Attention: Anthony W. Basch, Esq.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Telephone No: (804) 771-5725</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Email: awbasch@kaufcan.com</P></TD></TR>
<TR>
    <TD STYLE="border-bottom: Black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid">&nbsp;</TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><I>If to Newegg, to:</I></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><I>with a copy (which will not constitute notice) to:</I></FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Newegg Inc.</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Hunter Taubman Fischer &amp; Li LLC</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">17560 Rowland Street</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">City of Industry, CA 91748</P></TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">800 Third Avenue, Suite 2800</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">New York, New York 10022</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Attention: James Yang and Matt Strathman</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Attention: Joan Wu, Esq.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Telephone No.: (626) 271.9700 x22010 and x 22183</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Facsimile No.: (212) 202-6380</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Email:&nbsp;James.J.Yang@newegg.com</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Telephone No.: (212) 530-2208</FONT></TD></TR>
<TR>
    <TD STYLE="padding-left: 0.25in">&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 10pt">Matt.O.Strathman@newegg.com</FONT></TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">Email:&nbsp;<U>jwu@htflawyers.com</U></FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"><I>If to LLIT after the Closing, to:</I></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><I>with a copy (which will not constitute notice) to:</I></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Hunter Taubman Fischer &amp; Li LLC</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">800 Third Avenue, Suite 2800</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">New York, New York 10022</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Attention: Joan Wu, Esq.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Facsimile No.: (212) 202-6380</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Telephone No.: (212) 530-2208</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Email:&nbsp;<U>jwu@htflawyers.com</U></P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 9.2 <U>Interpretation</U>.
When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise
indicated. The table of contents, table of defined terms and headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words &ldquo;include,&rdquo; &ldquo;includes&rdquo;
or &ldquo;including&rdquo; are used in this Agreement, they shall be deemed to be followed by the words &ldquo;without limitation.&rdquo;
The words &ldquo;hereof,&rdquo; &ldquo;herein&rdquo; and &ldquo;hereunder&rdquo; and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All terms defined in
this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant thereto
unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument
or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument
or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver
or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto
and instruments incorporated therein. Each of the Parties has participated in the drafting and negotiation of this Agreement. If
an ambiguity or question of intent or interpretation arises, this Agreement must be construed as if it is drafted by all the Parties,
and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of authorship of any of the provisions
of this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 9.3 <U>Counterparts</U>.
This Agreement may be executed in counterparts, all of which shall be considered one and the same agreement, and shall become effective
when one or more counterparts have been signed by each of the Parties and delivered to the other Parties. In the event that any
signature is delivered by facsimile transmission or email attachment, such signature shall create a valid and binding obligation
of the Party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or email-attached
signature page were an original thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 9.4 <U>Entire
Agreement; No Third-Party Beneficiaries</U>. This Agreement constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, among the Parties with respect to the subject matter of this Agreement. This Agreement
is not intended to confer upon any Person other than the Parties hereto any rights or remedies hereunder;&nbsp;<U>provided</U>,&nbsp;<U>however</U>,
that following the Effective Time, each holder of Newegg Shares shall be entitled to enforce the provisions of&nbsp;<U>Article
I</U>&nbsp;to the extent necessary to receive the LLIT Exchange Shares to which such holder is entitled pursuant to&nbsp;<U>Article
I</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 9.5 <U>Governing
Law</U>. Except to the extent that the laws of the British Virgin Islands shall apply to the internal corporate governance of LLIT,
this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to
any choice or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the
State of Delaware. &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 9.6 <U>Amendment</U>.
This Agreement may not be amended except by an instrument in writing signed on behalf of LLIT (acting through the LLIT Special
Committee) and Newegg (acting through the Newegg Special Committee).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 9.7 <U>Waiver</U>.
At any time prior to the Effective Time, LLIT and Merger Sub (acting jointly through the LLIT Special Committee) and Newegg (acting
through the Newegg Special Committee) may, to the extent legally allowed: (i) extend the time for the performance of any of the
obligations or other acts of the other Parties hereto, (ii) waive any inaccuracies in the representations and warranties of the
other Party contained herein or in any document delivered pursuant hereto, and (iii) waive compliance with any of the covenants,
agreements or conditions of the other Party contained herein. Any agreement on the part of a Party hereto to any such extension
or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such Party.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 9.8 <U>Specific
Performance; Submission to Jurisdiction</U>. The Parties agree that irreparable damage would occur if any of the provisions of
this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed
that each of the Parties shall be entitled (in addition to any other remedy that may be available to it, including monetary damages)
to seek an injunction or injunctions to prevent breaches of this Agreement and to seek to enforce specifically the terms and provisions
of this Agreement exclusively in the Court of Chancery of the State of Delaware; provided, that if jurisdiction is not then available
in the Court of Chancery of the State of Delaware, then any such legal action or proceeding may be brought in any federal court
located in the State of Delaware or any other Delaware state court. In addition, each of the Parties irrevocably agrees that any
legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition
and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other
Party hereto or its successors or assigns, shall be brought and determined exclusively in the Court of Chancery of the State of
Delaware; provided, that if jurisdiction is not then available in the Court of Chancery of the State of Delaware, then any such
legal action or proceeding may be brought in any federal court located in the State of Delaware or any other Delaware state court.
Each of the Parties hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property,
generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action
relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the aforesaid courts.
Each of the Parties hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise,
in any action or proceeding with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction
of the above named courts for any reason other than the failure to serve, (b) any claim that it or its property is exempt or immune
from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment
prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent
permitted by the applicable law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient
forum, (ii) the venue of such suit, action or proceeding is improper, or (iii) this Agreement, or the subject matter of this Agreement,
may not be enforced in or by such courts. LLIT, Newegg and Merger Sub hereby consent to service being made through the notice procedures
set forth in&nbsp;<U>Section 9.1</U>&nbsp;and agree that service of any process, summons, notice or document by registered mail
(return receipt requested and first-class postage prepaid) to the respective addresses set forth in&nbsp;<U>Section 9.1</U>&nbsp;shall
be effective service of process for any suit or proceeding in connection with this Agreement or the transactions contemplated by
this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 9.9 <U>Waiver
of Jury Trial</U>. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (a) NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER, (b) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (c) EACH PARTY MAKES
THIS WAIVER VOLUNTARILY, AND (d) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS&nbsp;<U>SECTION 9.9</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 9.10    &nbsp;<U>Assignment</U>.
Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the Parties hereto
(whether by operation of law or otherwise) without the prior written consent of the other Parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 9.11    &nbsp;<U>Expenses</U>.
All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby, including the fees
and disbursements of counsel, financial advisors and accountants, shall be paid by the Party incurring such costs and expenses,
whether or not the Merger shall be consummated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 9.12    &nbsp;<U>Severability</U>.
If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms, conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long
as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to
any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties
shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible
in a mutually acceptable manner in order that the transactions contemplated by this Agreement may be consummated as originally
contemplated to the fullest extent possible.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 9.13    &nbsp;<U>Legal
Representation</U>. Each Party hereto acknowledges that it has been given the opportunity to be represented by independent legal
counsel in the preparation of this Agreement and hereby waives any allegations that it has not been represented by its own counsel.
The language used in this Agreement will be deemed to be the language chosen by the Parties with the advice of counsel to express
their mutual intent, and no rules of strict construction will be applied against any Party.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 9.14    &nbsp;<U>Special
Committee Decisions</U>. All material decisions with respect to this Agreement, the Escrow Agreement and any other Ancillary Agreements
and the transactions contemplated herein and therein, including the decision to enforce rights hereto and thereto or initiate Actions
with respect hereto and thereto, where the interests of Hangzhou Lianluo or any of its Affiliates are materially different from
the interests of any other stockholders of (i) LLIT, shall be determined by the LLIT Special Committee, or (ii)&nbsp;Newegg, shall
be determined by the Newegg Special Committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Section 9.15    &nbsp;<U>Definitions</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a) In this
Agreement, the following terms have the meanings specified or referred to in this&nbsp;<U>Section 9.15(a)</U>&nbsp;and shall be
equally applicable to both the singular and plural forms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(i)<FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT>&ldquo;<U>$</U>&rdquo; means United States dollars.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(ii)<FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT>&ldquo;<U>Acquisition Proposal</U>&rdquo; means any inquiry, proposal or offer, or any indication of interest in making
an offer or proposal, from any Person or group at any time relating to an Alternative Transaction, and (ii) an &ldquo;<U>Alternative
Transaction</U>&rdquo; means with respect to (A) Newegg and its respective Affiliates and (B) LLIT and its Affiliates, a transaction
(other than the transactions contemplated by this Agreement) concerning the sale of (x) all or any material part of the business
or assets of any Newegg Subsidiaries or LLIT (including any LLIT Subsidiary) or (y) any of the shares or other equity interests
or profits of any Newegg Subsidiaries or LLIT (including any LLIT Subsidiary), in any case, whether such transaction takes the
form of a sale of shares or other equity, assets, merger, consolidation, issuance of debt securities, management Contract, joint
venture or partnership, or otherwise</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(iii)<FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT>&ldquo;<U>Action</U>&rdquo; means any claim, action, suit, proceeding, arbitration, mediation or investigation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(iv)<FONT STYLE="font-family: Times New Roman, Times, Serif">  &nbsp;
</FONT>&ldquo;<U>Affiliate</U>&rdquo; means, with respect to any Person, any other Person which directly or indirectly controls,
is controlled by or is under common control with such Person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(v)<FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT>&ldquo;<U>Benefit Plan</U>&rdquo; means any &ldquo;employee benefit plan&rdquo; as defined in Section 3(3) of ERISA and
any other plans, programs, policies, agreements or arrangements in each case that provide compensation or other benefits to any
employee of LLIT or Newegg, as applicable, whether or not subject to ERISA, currently maintained or sponsored by LLIT or Newegg,
as applicable, or any ERISA Affiliate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0 0pt 1in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(vi)<FONT STYLE="font-family: Times New Roman, Times, Serif">  &nbsp;
</FONT>&ldquo;<U>Business Day</U>&rdquo; means any day other than a Saturday, Sunday or a day on which the banks in New York, Hong
Kong and/or China are authorized by law or executive order to be closed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(vii)<FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp;
</FONT>&ldquo;<U>BVI Act</U>&rdquo; means the British Virgin Islands Business Companies Act, 2004, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(viii)<FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT>&ldquo;<U>Confidential Information</U>&rdquo; means all confidential or proprietary documents and information concerning
the LLIT, Merger Sub, Newegg or any of their respective Representatives, furnished in connection with this Agreement or the transactions
contemplated hereby; provided, however, that Confidential Information shall not include any information which, (i) at the time
of disclosure by LLIT, Merger Sub, Newegg or any of their respective Representatives, is generally available publicly and was not
disclosed in breach of this Agreement or (ii) at the time of the disclosure by LLIT, Merger Sub, Newegg or any of their respective
Representatives, was previously known by such receiving Party without violation of Law or any confidentiality obligation by the
Person receiving such Confidential Information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0 0pt 1in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(ix)<FONT STYLE="font-family: Times New Roman, Times, Serif">  &nbsp;
</FONT>&ldquo;<U>Consent</U>&rdquo; means any consent, approval, waiver, authorization or Permit of, or notice to or declaration
or filing with any Governmental Authority or any other Person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0 0pt 1in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(x)<FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT>&ldquo;<U>Contract</U>&rdquo; means any contract, agreement, instrument, guarantee, indenture, note, bond, mortgage, permit,
franchise, concession, commitment, lease, license, arrangement, obligation or understanding, whether written or oral.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xi)<FONT STYLE="font-family: Times New Roman, Times, Serif">  &nbsp;
</FONT>&ldquo;<U>Governmental Authority</U>&rdquo; means domestic or foreign governmental, administrative, judicial or regulatory
authority.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0 0pt 1.5in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xii)<FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp;
</FONT>&ldquo;<U>Indebtedness</U>&rdquo; of any Person means (a) all indebtedness of such Person for borrowed money (including
the outstanding principal and accrued but unpaid interest) or for the deferred purchase price of property or services, (b) any
other indebtedness of such Person that is evidenced by a note, bond, debenture, credit agreement or similar instrument, (c) all
obligations of such Person under leases that should be classified as capital leases in accordance with GAAP, (d) all obligations
of such Person for the reimbursement of any obligor on any line or letter of credit, banker&rsquo;s acceptance, guarantee or similar
credit transaction, in each case, that has been drawn or claimed against, (e) all obligations of such Person in respect of acceptances
issued or created, (f) all interest rate and currency swaps, caps, collars and similar agreements or hedging devices under which
payments are obligated to be made by such Person, whether periodically or upon the happening of a contingency, (g) all obligations
secured by an Lien on any property of such Person and (h) any premiums, prepayment fees or other penalties, fees, costs or expenses
associated with payment of any Indebtedness of such Person and (h) all obligation described in clauses (a) through (h) above of
any other Person which is directly or indirectly guaranteed by such Person or which such Person has agreed (contingently or otherwise)
to purchase or otherwise acquire or in respect of which it has otherwise assured a creditor against loss.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0 0pt 1in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xiii)<FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT>&ldquo;<U>Intellectual Property</U>&rdquo; means (a) all registered and unregistered trademarks, service marks, logos, corporate
names, trade names, internet domain names and other indications of origin, together with all translations, adaptations, derivations
and combinations thereof, the goodwill associated with the foregoing and registrations and renewals in any jurisdiction, and applications
in any jurisdiction to register the same (&ldquo;<U>Trademarks</U>&rdquo;); (b) all issued U.S. and foreign patents and pending
patent applications, including, without limitation, divisionals, continuation, continuation in part, continuing and renewal applications
(&ldquo;<U>Patents</U>&rdquo;); (c) all registered and unregistered copyrights, copyrightable and copyright works and all registration,
renewals and applications to register the same (whether or not constituting &ldquo;work made for hire&rdquo; as defined in 17 U.S.C.
Sections 101 and 201(b)(4)) (&ldquo;<U>Copyrights</U>&rdquo;); (d) all protectable items of trade dress; (e) all computer software
(including source code, executable code, systems and networks tools) and protectable databases, whether owned or under development
or otherwise (&ldquo;<U>Software</U>&rdquo;); (f) all confidential and proprietary trade secrets, inventions, ideas, discoveries
(whether or not patentable and whether or not reduced to practice), know-how, processes, procedures, drawings, specifications,
designs, plans, proposals, customer and supplier lists, independent contractor lists, pricing and cost information or other technical
data or confidential business information, together with all documentation and media constituting or describing any of the foregoing
and tangible embodiments thereof (in whatever form of media and whether or not registered) (&ldquo;<U>Trade Secrets</U>&rdquo;);
(g) all claims of infringement against third parties; and (h) other such rights generally classified as intangible, intellectual
property assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0 0pt 1in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xiv)<FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT>&ldquo;<U>Internet Assets</U>&rdquo; means any all domain name registrations, web sites and web pages and related rights,
items and documentation related thereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0 0pt 1in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xv)<FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp;
</FONT>&ldquo;<U>IP Licenses</U>&rdquo; means all licenses, sublicenses and other agreements or permissions, under which a Person
is a licensee or otherwise is authorized to use or practice any Intellectual Property.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xvi)<FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT>&ldquo;<U>IRS</U>&rdquo; means the Internal Revenue Service.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xvii)<FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT>&ldquo;<U>Knowledge of LLIT</U>&rdquo; means the actual knowledge of the directors and officers of LLIT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xviii)<FONT STYLE="font-family: Times New Roman, Times, Serif">   &nbsp;
</FONT>&ldquo;<U>Knowledge of Newegg</U>&rdquo; means the actual knowledge of the directors and officers of Newegg.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0 0pt 1in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xix)<FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT>&ldquo;<U>Laws</U>&rdquo; means any federal, state, local or foreign order, writ, injunction, judgment, settlement, award,
decree, statute, law, rule or regulation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xx)<FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp;
</FONT>&ldquo;<U>Liability</U>&rdquo; means any liability, indebtedness, or obligation of any kind (whether accrued, absolute,
contingent, matured, unmatured, determined, determinable, or otherwise, and whether or not required to be recorded or reflected
on a balance sheet under GAAP).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxi)<FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT>&ldquo;<U>Lien</U>&rdquo; means, with respect to any asset, any mortgage, deed of trust, lien, pledge, charge, security
interest, title retention device, collateral assignment, adverse claim, restriction or other encumbrance of any kind in respect
of such asset (including any restriction on the voting of any security, any restriction on the transfer of any security or other
asset, any restriction on the receipt of any income derived from any asset, any restriction on the use of any asset and any restriction
on the possession, exercise or transfer of any other attribute of ownership of any asset).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxii)<FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT>&ldquo;<U>Material Adverse Effect</U>&rdquo; means, with respect to a particular Person, any effect that is or would be
materially adverse to the business, operations, assets, condition (financial or otherwise) or results of operations of such Person
and its Subsidiaries, taken as a whole, or to the ability of such Person to enter into or perform its obligations under this Agreement
or any Ancillary Agreement or to consummate the transactions hereunder or thereunder; provided, however, that with respect to LLIT
or its Subsidiaries, &ldquo;Material Adverse Effect&rdquo; shall be measured after giving effect to the Disposition and shall also
include any effect that is or would be reasonably expected to be materially adverse to the issuance and listing of the LLIT Exchange
Shares on NASDAQ.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxiii)<FONT STYLE="font-family: Times New Roman, Times, Serif">   &nbsp;
</FONT>&ldquo;<U>Newegg Board</U>&rdquo; means the Board of Directors of Newegg.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxiv)<FONT STYLE="font-family: Times New Roman, Times, Serif">   &nbsp;
</FONT>&ldquo;<U>Order</U>&rdquo; means any order, injunction, judgment, decree or ruling enacted, adopted, promulgated or applied
by a Governmental Authority or arbitrator.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxv)<FONT STYLE="font-family: Times New Roman, Times, Serif">    &nbsp;
</FONT>&ldquo;<U>Organizational Documents</U>&rdquo; means the certificate of incorporation and bylaws, or documents of similar
import, for an entity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxvi)<FONT STYLE="font-family: Times New Roman, Times, Serif">   &nbsp;
</FONT>&ldquo;<U>Permits</U>&rdquo; means all permits (including environmental, construction and operational permits), licenses,
franchises, certificates, approvals, registrations, authorizations, variances and similar rights issued by any Governmental Entity
and all pending applications therefor and renewals thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxvii)<FONT STYLE="font-family: Times New Roman, Times, Serif">  &nbsp;
</FONT>&ldquo;<U>Permitted Lien</U>&rdquo; means (i) Liens for current taxes and assessments not yet past due or the amount or
validity of which is being contested in good faith by appropriate proceedings, (ii) mechanics&rsquo;, workmen&rsquo;s, repairmen&rsquo;s,
warehousemen&rsquo;s and carriers&rsquo; Liens arising in the ordinary course of business of LLIT or Newegg, as applicable, consistent
with past practice and (iii) any such matters of record, Liens and other imperfections of title that do not, individually or in
the aggregate, materially impair the continued ownership, use and operation of the assets to which they relate in the business
of LLIT or Newegg, as applicable, as currently conducted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxviii)<FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp;
</FONT>&ldquo;<U>Person</U>&rdquo; means any individual, corporation, partnership, limited liability company, joint venture, association,
joint-stock company, estate, Governmental Authority, trust or unincorporated organization.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0 0pt 1in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxix)<FONT STYLE="font-family: Times New Roman, Times, Serif">   &nbsp;
</FONT>&ldquo;<U>Personal Property</U>&rdquo; means any machinery, equipment, tools, vehicles, furniture, leasehold improvements,
office equipment, plant, parts and other tangible personal property.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxx)<FONT STYLE="font-family: Times New Roman, Times, Serif">    &nbsp;
</FONT>&ldquo;<U>Registered IP</U>&rdquo; means all Patents, Trademarks, Internet Assets and Copyrights owned or licensed by a
Person or otherwise used or held for use by a Person in which a Person is the owner, applicant or assignee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxxi)<FONT STYLE="font-family: Times New Roman, Times, Serif">   &nbsp;
</FONT>&ldquo;<U>Representative</U>&rdquo; means any officers, directors or employees, and financial advisors, attorneys or other
advisors or representatives.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxxii)<FONT STYLE="font-family: Times New Roman, Times, Serif">  &nbsp;
</FONT>&ldquo;<U>Stock Split</U>&rdquo; means the reverse stock split of the LLIT Shares required in anticipation of the Closing
in order for the LLIT Shares to meet the minimum bid price requirement for initial listing on the NASDAQ Capital Market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxxiii)<FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp;
</FONT>&ldquo;<U>Subsidiary</U>&rdquo; means any corporation, partnership, limited liability company, joint venture, trust, association
or other entity of which Newegg or LLIT, as the case may be (either alone or through or together with any other Subsidiary), owns,
directly or indirectly, (i)&nbsp;50% or more of the stock or other equity interests the holders of which are generally entitled
to elect at least a majority of the Board of Directors or other governing body of such corporation, partnership, limited liability
company, joint venture, trust, association or other entity or (ii)&nbsp;if there are no such voting interests, 50% or more of the
equity interests in such corporation, partnership, limited liability company, joint venture, trust, association or other entity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0 0pt 1in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxxiv)<FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT>&ldquo;<U>Tax</U>&rdquo; or &ldquo;<U>Taxes</U>&rdquo; means any federal, state, local or foreign income, gross receipts,
property, sales, use, license, excise, franchise, employment, payroll, withholding, alternative or added minimum, ad valorem, value-added,
transfer or excise, tax, or other tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever,
together with any additions to tax, interest or penalty imposed by any Governmental Authority.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxxv)<FONT STYLE="font-family: Times New Roman, Times, Serif">  &nbsp;
</FONT>&ldquo;<U>Tax Return</U>&rdquo; means any return, report or similar statement (including the attached schedules) required
to be filed with respect to any Tax, including any information return, claim for refund, amended return or declaration of estimated
Tax.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0 0pt 1in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxxvi)<FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT>&ldquo;<U>Top Customer</U>&rdquo; means by dollar&nbsp;volume paid for each of (a) the twelve (12) months ended on the December
31, 2019 and (b) the period from January 1, 2020 to the end of the Interim Period, the ten (10) largest customers of Newegg or
LLIT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxxvii)<FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT>&ldquo;<U>Top Supplier</U>&rdquo; means by dollar&nbsp;volume paid for each of (a) the twelve (12) months ended on the December
31, 2019 and (b) the period from January 1, 2020 to the end of the Interim Period, the five (5) largest suppliers of goods or services
to Newegg or LLIT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0 0pt 1in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">(xxxviii) &ldquo;<U>Trading
Day</U>&rdquo; means, as applicable, (x) with respect to all price or trading volume determinations relating to LLIT Class A Shares,
any day on which the LLIT Class A Share is eligible for trading on the NASDAQ Capital Market, or, if the NASDAQ Capital Market
is not the principal trading market for the LLIT Class A Shares, then on the principal securities exchange or securities market
on which the LLIT Class A Share is then traded, provided that &ldquo;<U>Trading Day</U>&rdquo; shall not include any day on which
the LLIT Class A Share is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the LLIT Class
A Share is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does
not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New
York time) or (y) with respect to all determinations other than price determinations relating to the LLIT Class A Shares, any day
on which The New York Stock Exchange (or any successor thereto) is open for trading of securities</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B>IN WITNESS WHEREOF</B>, LLIT, Merger Sub
and Newegg have caused this Agreement to be signed by their respective officers thereunto duly authorized all as of the date first
written above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">LIANLUO SMART LIMITED</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 4%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 36%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 60%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
    Bin Lin</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Name: Bin Lin </FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Title: Chief Executive Officer</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">LIGHTNING DELAWARE SUB, INC.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
    Bin Lin</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Name: Bin Lin</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Title: Chief Executive Officer </FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NEWEGG INC.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
    Anthony Chow</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Name: Anthony Chow</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Title: Chief Executive Officer</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Exhibit A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Support Agreements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">[see attached]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Ex. A-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->1<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Exhibit B</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LLIT Directors &amp; Officers &ndash;
Post-Closing</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 31%; border-bottom: black 1.5pt solid"><FONT STYLE="font-size: 10pt">NAME</FONT></TD>
    <TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 36%; border-bottom: black 1.5pt solid"><FONT STYLE="font-size: 10pt">POSITION</FONT></TD>
    <TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="width: 31%; border-bottom: black 1.5pt solid"><FONT STYLE="font-size: 10pt">APPOINTED BY</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Anthony Chow</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Director and Chief Executive Officer</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Minority Representative</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Robert Chang</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Chief Financial Officer</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Jamie Spannos</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Chief Operating Officer</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Montaque Hou</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Chief Technology Officer</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Matt Strathman</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">General Counsel</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Zhitao &ldquo;Tom&rdquo; He</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Chairman of the Board</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Hangzhou Lianluo</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Fred Faching Chang</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Director, Vice Chairman of the Board</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Minority Representative</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Yingmei Yang</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Director</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Hangzhou Lianluo</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">Gregory Moore</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Independent Director</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Minority Representative</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD><FONT STYLE="font-size: 10pt">Paul Wu</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Independent Director</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Hangzhou Lianluo</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: #CCEEFF">
    <TD><FONT STYLE="font-size: 10pt">[to be determined]</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Independent Director</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Hangzhou Lianluo</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Exhibit C</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Form of Amended Charter for LLIT Post-Closing</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">[see attached]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Ex. C-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->1<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Exhibit D</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Form of Lock-Up Agreement</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">THIS LOCK-UP AGREEMENT
(this &ldquo;<B><I>Agreement</I></B>&rdquo;) is made as of [&#9679;], 2020 by and among <B>Lianluo Smart Limited.</B>, a British
Virgin Islands company, which will be known after the consummation of the transactions contemplated by the Merger Agreement (as
defined below) as &ldquo;Newegg Commerce, Inc.&rdquo; (including any successor entity thereto, the &ldquo;<B><I>Parent</I></B>&rdquo;),
and the undersigned (&ldquo;<B><I>Holder</I></B>&rdquo;). Any capitalized term used but not defined in this Agreement will have
the meaning ascribed to such term in the Merger Agreement (as defined herein below).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B>WHEREAS</B>, on
[&#9679;], 2020, the Parent entered into that certain Merger Agreement (as amended from time to time in accordance with the terms
thereof, the &ldquo;<B><I>Merger Agreement</I></B>&rdquo;), by and among (i) the Parent, (ii) Newegg, Inc., a Delaware corporation
(the &ldquo;<B><I>Company</I></B>&rdquo;), and (iii) Lightning Delaware Sub, Inc., Delaware corporation and wholly owned subsidiary
of the Parent (the &ldquo;<B><I>Merger Sub</I></B>&rdquo;), pursuant to which the Merger Sub will merge with and into the Company,
with the Company continuing as the surviving entity and a wholly-owned subsidiary of the Parent (the &ldquo;<B><I>Merger</I></B>&rdquo;),
and as a result of which, among other matters, all of the issued and outstanding capital shares of the Company, immediately prior
to the consummation of the Merger (the &ldquo;<B><I>Closing</I></B>&rdquo;), shall no longer be outstanding and shall automatically
be cancelled and shall cease to exist, in exchange for the LLIT Exchange Shares, and each outstanding Company option shall be assumed
by the Parent and automatically converted into an option exercisable into LLIT Class A Shares (as equitably adjusted), all upon
the terms and subject to the conditions set forth in the Merger Agreement;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B>WHEREAS</B>, immediately
prior to the Closing, each Holder is a beneficial holder of the Company&rsquo;s securities, in such amounts as set forth underneath
Holder&rsquo;s name on the signature page hereto; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B>WHEREAS</B>, pursuant
to the Merger Agreement, and in view of the valuable consideration to be received by Holder thereunder, the Parent and Holder desire
to enter into this Agreement, pursuant to which the LLIT Exchange Shares received by Holder in the Merger (all such securities,
together with any securities paid as dividends or distributions with respect to such securities or into which such securities are
exchanged or converted, the&nbsp;<I>&ldquo;<B>Restricted Securities</B>&rdquo;</I>) shall become subject to limitations on disposition
as set forth herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B>NOW, THEREFORE</B>,
in consideration of the premises set forth above, which are incorporated in this Agreement as if fully set forth below, and intending
to be legally bound hereby, the parties hereby agree as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">1. <U>Lock-Up Provisions</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)&nbsp; Holder hereby
agrees not to, during the period commencing from the Closing and, with respect to the Restricted Securities, ending on the earliest
of (x) the 180 day anniversary of the date of the Closing and (y) the date after the Closing on which the Parent consummates a
liquidation, merger, share exchange or other similar transaction with an unaffiliated third party that results in all of the Parent&rsquo;s
shareholders having the right to exchange their equity holdings in the Parent for cash, securities or other property (a &ldquo;<B><I>Subsequent
Transaction</I></B>&rdquo;), (the &ldquo;<B><I>Lock-Up Period</I></B>&rdquo;): (i) lend, offer, pledge, hypothecate, encumber,
donate, assign, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Restricted Securities,
(ii)&nbsp;enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Restricted Securities, or (iii)&nbsp;publicly disclose the intention to do any of the foregoing, whether any
such transaction described in clauses (i), (ii), or (iii) above is to be settled by delivery of Restricted Securities or other
securities, in cash or otherwise (any of the foregoing described in clauses (i), (ii), or (iii), a &ldquo;<B><I>Prohibited Transfer</I></B>&rdquo;);
provided, however, that the foregoing shall not preclude Holder from engaging in any transaction in the securities of another company
in the same sector or in a similar sector as that of the Parent. The foregoing sentence shall not apply to the transfer of any
or all of the Restricted Securities owned by Holder, (A) by gift, will or intestate succession upon the death of Holder, (B) to
any Permitted Transferee or (C) pursuant to a court order or settlement agreement related to the distribution of assets in connection
with the dissolution of marriage or civil union; provided, however, that in any of cases (A), (B) or (C) it shall be a condition
to such transfer that the transferee executes and delivers to the Parent an agreement stating that the transferee is receiving
and holding the Restricted Securities subject to the provisions of this Agreement applicable to Holder, and there shall be no further
transfer of such Restricted Securities except in accordance with this Agreement. As used in this Agreement, the term &ldquo;<B><I>Permitted
Transferee</I></B>&rdquo; shall mean: (1) the members of Holder&rsquo;s immediate family (for purposes of this Agreement, &ldquo;immediate
family&rdquo; shall mean any relationship by blood, marriage or adoption, not more remote than first cousin), (2) any trust for
the direct or indirect benefit of Holder or the immediate family of Holder, (3) if Holder is a trust, to the trustor or beneficiary
of such trust or to the estate of a beneficiary of such trust, (4) as a distribution to limited partners, shareholders, members
of, or owners of similar equity interests in Holder upon the liquidation and dissolution of Holder or (5) to any affiliate of Holder
or to any investment fund or other entity controlled by Holder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)&nbsp; Intentionally
omitted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c)&nbsp; If any Prohibited
Transfer is made or attempted contrary to the provisions of this Agreement, such purported Prohibited Transfer shall be null and
void ab initio, and the Parent shall refuse to recognize any such purported transferee of the Restricted Securities as one of its
equity holders for any purpose. In order to enforce this&nbsp;<U>Section 1</U>, the Parent may impose stop-transfer instructions
with respect to the Restricted Securities of Holder (and permitted transferees and assigns thereof) until the end of the Lock-Up
Period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(d)&nbsp; During the
Lock-Up Period, each certificate evidencing any Restricted Securities shall be stamped or otherwise imprinted with a legend in
substantially the following form, in addition to any other applicable legends:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left">&ldquo;THE SECURITIES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN A LOCK-UP AGREEMENT, DATED AS OF [&#9679;], 2020, BY AND
AMONG THE ISSUER OF SUCH SECURITIES (THE &ldquo;PARENT&rdquo;) AND THE PARENT&rsquo;S SHAREHOLDER NAMED THEREIN, AS AMENDED. A
COPY OF SUCH LOCK-UP AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE PARENT TO THE HOLDER HEREOF UPON WRITTEN REQUEST.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(e)&nbsp; For the avoidance
of any doubt, Holder shall retain all of its rights as a shareholder of the Parent during the Lock-Up Period, including the right
to vote any Restricted Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(f)&nbsp; To the extent
that any of the Merger Consideration Shares held by any other Company Stockholder subject to a Lock-Up Agreement entered into in
connection with the Closing are released from, or not subject to, lockup restrictions substantially similar to those in this Agreement
(a &ldquo;<B><I>Lock-up Change</I></B>&rdquo;), the Parent shall promptly give Holder written notice of such Lock-up Change and
the Restricted Securities subject to the terms of this Agreement shall be immediately released from, or not subject to, the lockup
restrictions in this Agreement with an effectiveness concurrent with, and to substantially the same extent and effect as, the Lock-up
Change.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">2. <U>Miscellaneous</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a) <U>Termination of
Merger Agreement</U>. Notwithstanding anything to the contrary contained herein, in the event that the Merger Agreement is terminated
in accordance with its terms prior to the Closing, this Agreement and all rights and obligations of the parties hereunder shall
automatically terminate and be of no further force or effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b) <U>Binding Effect;
Assignment</U>. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto
and their respective permitted successors and assigns. This Agreement and all obligations of Holder are personal to Holder and
may not be transferred or delegated by Holder at any time. The Parent may freely assign any or all of its rights under this Agreement,
in whole or in part, to any successor entity (whether by merger, consolidation, equity sale, asset sale or otherwise) without obtaining
the consent or approval of Holder.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c) <U>Third Parties</U>.
Nothing contained in this Agreement or in any instrument or document executed by any party in connection with the transactions
contemplated hereby shall create any rights in, or be deemed to have been executed for the benefit of, any person or entity that
is not a party hereto or thereto or a successor or permitted assign of such a party.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(d) <U>Governing Law;
Jurisdiction</U>. The terms and provisions of this Agreement shall be construed and enforced in accordance with the laws of the
State of California without reference to its conflict of law provisions. Each of the parties hereto irrevocably consents to the
exclusive jurisdiction and venue of any state or federal court located in Los Angeles County, California (or in any court in which
appeal from such courts may be taken) in connection with any matter based upon or arising out of this Agreement or the matters
contemplated herein, agrees that process may be served upon them in any manner authorized by the laws of the State of California
for such Persons and waives and covenants not to assert or plead any objection which they might otherwise have to such jurisdiction,
venue and such process.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(e) <U>WAIVER OF JURY
TRIAL</U>. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY WITH RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SEEK TO ENFORCE THAT FOREGOING WAIVER AND
(ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS&nbsp;<U>SECTION 2(e)</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(f) <U>Interpretation</U>.
The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or interpreting
this Agreement. In this Agreement, unless the context otherwise requires: (i) any pronoun used in this Agreement shall include
the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural
and vice versa; (ii) &ldquo;including&rdquo; (and with correlative meaning &ldquo;include&rdquo;) means including without limiting
the generality of any description preceding or succeeding such term and shall be deemed in each case to be followed by the words
&ldquo;without limitation&rdquo;; (iii) the words &ldquo;herein,&rdquo; &ldquo;hereto,&rdquo; and &ldquo;hereby&rdquo; and other
words of similar import in this Agreement shall be deemed in each case to refer to this Agreement as a whole and not to any particular
section or other subdivision of this Agreement; and (iv) the term &ldquo;or&rdquo; means &ldquo;and/or&rdquo;. The parties have
participated jointly in the negotiation and drafting of this Agreement. Consequently, in the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption
or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(g) <U>Notices</U>. Any
notice, consent or request to be given in connection with any of the terms or provisions of this Agreement shall be completed in
accordance with Section 9.1 of the Merger Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(h) <U>Amendments and
Waivers</U>. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally
or in a particular instance, and either retroactively or prospectively) only with the written consent of the Parent and Holder.
No failure or delay by a party in exercising any right hereunder shall operate as a waiver thereof. No waivers of or exceptions
to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further
or continuing waiver of any such term, condition, or provision.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(i)&nbsp;<U>Severability</U>.
In case any provision in this Agreement shall be held invalid, illegal or unenforceable in a jurisdiction, such provision shall
be modified or deleted, as to the jurisdiction involved, only to the extent necessary to render the same valid, legal and enforceable,
and the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby
nor shall the validity, legality or enforceability of such provision be affected thereby in any other jurisdiction. Upon such determination
that any term or other provision is invalid, illegal or incapable of being enforced, the parties will substitute for any invalid,
illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable,
the intent and purpose of such invalid, illegal or unenforceable provision.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(j) <U>Specific Performance</U>.
Holder acknowledges that its obligations under this Agreement are unique, recognizes and affirms that in the event of a breach
of this Agreement by Holder, money damages may be inadequate and the Parent may have not adequate remedy at law, and agrees that
irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by Holder in accordance
with their specific terms or were otherwise breached. Accordingly, the Parent shall be entitled to seek an injunction or restraining
order to prevent breaches of this Agreement by Holder and to seek to enforce specifically the terms and provisions hereof, without
the requirement to post any bond or other security or to prove that money damages would be inadequate, this being in addition to
any other right or remedy to which such party may be entitled under this Agreement, at law or in equity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(k) <U>Entire Agreement</U>.
This Agreement constitutes the full and entire understanding and agreement among the parties with respect to the subject matter
hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly
canceled;&nbsp;<U>provided</U>, that, for the avoidance of doubt, the foregoing shall not affect the rights and obligations of
the parties under the Merger Agreement or any Ancillary Document, including the Amended and Restated Registration Rights Agreement.
Notwithstanding the foregoing, nothing in this Agreement shall limit any of the rights or remedies of the Parent or any of the
obligations of Holder under any other agreement between Holder and the Parent or any certificate or instrument executed by Holder
in favor of the Parent, and nothing in any other agreement, certificate or instrument shall limit any of the rights or remedies
of the Parent or any of the obligations of Holder under this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(l) <U>Further Assurances</U>.
From time to time, at another party&rsquo;s request and without further consideration (but at the requesting party&rsquo;s reasonable
cost and expense), each party shall execute and deliver such additional documents and take all such further action as may be reasonably
necessary to consummate the transactions contemplated by this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(m) <U>Counterparts;
Facsimile.</U>&nbsp; This Agreement may also be executed and delivered by facsimile signature or by email in portable document
format in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and
the same instrument.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><I>[Signature Pages Follow]</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>IN WITNESS WHEREOF</B>,
the parties have executed this Lock-Up Agreement as of the date first written above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt"><B>PARENT:</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt; text-transform: uppercase"><B><I>Lianluo Smart Limited</I></B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 60%">&nbsp;</TD>
    <TD STYLE="width: 4%"><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD STYLE="width: 36%; border-bottom: black 1.5pt solid">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt">Name: &nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt">Title: </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>


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    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Ex. D-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->5<!-- Field: /Sequence --></P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>IN WITNESS WHEREOF</B>, the parties have
executed this Lock-Up Agreement as of the date first written above.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt"><I><U>Holder</U></I>: [Name of the Holder]</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 35%">&nbsp;</TD>
    <TD STYLE="width: 60%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Name: </FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">Title:</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Number of shares of Company Securities:</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Company Class A Common Stock: ______________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Company Class B Common Stock: ______________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Company Series A Preferred Stock: ______________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Company Series AA Preferred Stock: ______________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Address for Notice:</I></B>&nbsp;Address:_______________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">______________________________________________________________&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">______________________________________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Facsimile No.:&nbsp;___________________________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Telephone No.:&nbsp;__________________________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Email: _________________________________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B><A NAME="annexb_001"></A>Annex B</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SUPPORT AGREEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">THIS SUPPORT AGREEMENT
(this &ldquo;<U>Agreement</U>&rdquo;), dated as of October 23, 2020, is made by and among Lianluo Smart Limited, a business company
incorporated under the laws of the British Virgin Islands (&ldquo;<U>LLIT</U>&rdquo;), Newegg Inc., a Delaware corporation (&ldquo;<U>Newegg</U>&rdquo;),
and the undersigned holders (&ldquo;<U>Shareholders</U>&rdquo;) of LLIT Class A Shares and LLIT Class B Shares (the &ldquo;<U>Shares</U>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">WHEREAS, LLIT, Lightning
Delaware Sub, Inc., a Delaware corporation (&ldquo;<U>Merger Sub</U>&rdquo;), and Newegg, have entered into an Agreement and Plan
of Merger, dated of even date herewith (the &ldquo;<U>Merger Agreement</U>&rdquo;), providing for the merger of Merger Sub with
and into Newegg, with Newegg surviving as the wholly owned subsidiary of LLIT (the &ldquo;<U>Merger</U>&rdquo;);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">WHEREAS, each Shareholder
beneficially owns and has sole voting power with respect to the number of Shares, and holds the LLIT options or warrants to acquire
shares of LLIT, set forth opposite such Shareholder&rsquo;s name on <U>Schedule 1</U> attached hereto;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">WHEREAS, as an inducement
and a condition to the willingness of LLIT, Merger Sub and Newegg to enter into the Merger Agreement, and in consideration of the
substantial expenses incurred and to be incurred by them in connection therewith, each Shareholder has agreed to enter into and
perform this Agreement; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">WHEREAS, all capitalized terms used in this
Agreement without definition herein shall have the meanings ascribed to them in the Merger Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">NOW, THEREFORE, in
consideration of, and as a condition to, LLIT, Merger Sub and Newegg&rsquo;s entering into the Merger Agreement and proceeding
with the transactions contemplated thereby, and in consideration of the substantial expenses incurred and to be incurred by them
in connection therewith, Shareholders, LLIT and Newegg agree as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">1.&nbsp;<U>Agreement
to Vote Shares</U>. Shareholders agree that, prior to the Expiration Date (as defined in <U>Section <FONT STYLE="font-size: 12pt">&lrm;</FONT>2</U>
below), at any meeting of the shareholders of LLIT or any adjournment or postponement thereof, or in connection with any written
consent of the shareholders of LLIT, with respect to the Proposals (as defined below), Shareholders shall:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">(a)&nbsp;appear
at such meeting or otherwise cause the Shares and any New Shares (as defined in <U>Section <FONT STYLE="font-size: 12pt">&lrm;</FONT>3</U>
below) to be counted as present thereat for purposes of calculating a quorum;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">(b)&nbsp;from
and after the date hereof until the Expiration Date, vote (or cause to be voted) all of the Shares and any New Shares that such
Shareholder shall be entitled to so vote: (i) in favor of (A) the proposal to adopt the Merger Agreement and the Merger contemplated
thereby, (B) the proposal to adopt the equity transfer agreement, dated on or about October 23, 2020, and as it may be amended
from time to time, among Beijing Fenjin Times Technology Development Co., Ltd., or the Purchaser, Lianluo Connection Medical Wearable
Device Technology (Beijing) Co., Ltd., or Lianluo Connection, and LLIT, pursuant to which LLIT will sell of all of its equity interests
in Lianluo Connection to the Purchaser immediately following completion of the Merger, (C) the proposal to eliminate unissued Class
B common shares and rename class A common shares as common shares, (D) the proposal to approve a share combination of issued and
outstanding common shares of LLIT by a ratio of not less than one-for-two and not more than one-for-fifty at any time prior to
June 30, 2021, with the exact ratio to be set at a whole number within this range, as determined by LLIT&rsquo;s board of directors
in its sole discretion, (E)the proposal to increase the number of LLIT common shares that LLIT is authorized to issue, (F) the
proposal to change the name of LLIT to &ldquo;Newegg Commerce, Inc.&rdquo;, (G) the proposal to amend and restate LLIT&rsquo;s
current amended and restated memorandum and articles of association to effect the foregoing and to make certain other amendments
described in the preliminary proxy statement/prospectus on Form F-4 filed by LLIT with the Securities and Exchange Commission (the
&ldquo;<U>SEC</U>&rdquo;), and (H) the proposal to approve the adjournment of the shareholder meeting if necessary to solicit additional
proxies if there are not sufficient votes to approve the above proposals at the time of the shareholder meeting, or any adjournment
or postponement thereof ((A) through (H) collectively, the &ldquo;<U>Proposals</U>&rdquo;); and (ii) against any agreement, transaction
or other matter that is intended to, or would reasonably be expected to, impede, interfere with, delay, postpone, discourage or
materially and adversely affect the consummation of the Proposals. Shareholders shall not take or commit or agree to take any action
inconsistent with the foregoing and will take such further affirmative steps as may be reasonably required to effect the foregoing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">2.&nbsp;<U>Expiration
Date</U>. As used in this Agreement, the term &ldquo;<U>Expiration Date</U>&rdquo; shall mean the earlier to occur of (a) the date
and time as the Merger Agreement shall have been terminated pursuant to the terms thereof, or (b) the date on which the Closing
occurs in accordance with the Merger Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">3.&nbsp;<U>Additional
Purchases</U>. Shareholder agrees that any LLIT Class A Shares or LLIT Class B Shares or other equity securities of LLIT that Shareholder
purchases or with respect to which Shareholder otherwise acquires sole or shared voting power (including any proxy, other than
to the extent such proxy expressly limits such proxy holder&rsquo;s ability to act as provided herein) after the execution of this
Agreement and prior to the Expiration Date, whether by the exercise of any LLIT options, warrants or otherwise, including, without
limitation, by gift, succession, in the event of a stock split or as a dividend or distribution of any Shares (&ldquo;<U>New Shares</U>&rdquo;),
shall be subject to the terms and conditions of this Agreement to the same extent as if they constituted the Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">4.&nbsp;<U>Share
Transfers</U>. From and after the date hereof until the Expiration Date, Shareholder shall not, directly or indirectly, (a) sell,
assign, transfer, tender, or otherwise dispose of (including, without limitation, by the creation of any Liens) any Shares or any
New Shares acquired, (b) deposit any Shares or New Shares into a voting trust or enter into a voting agreement or similar arrangement
with respect to such Shares or New Shares or grant any proxy or power of attorney with respect thereto (other than this Agreement),
(c) enter into any Contract, option, commitment or other arrangement or understanding with respect to the direct or indirect sale,
transfer, assignment or other disposition of (including, without limitation, by the creation of any Liens) any Shares or New Shares,
or (d) take any action that would make any representation or warranty of Shareholder contained herein untrue or incorrect or have
the effect of preventing or disabling Shareholder from performing Shareholder&rsquo;s obligations under this Agreement. Notwithstanding
the foregoing, Shareholder may make (1) transfers by will or by operation of Law or other transfers for estate-planning purposes,
in which case this Agreement shall bind the transferee, (2) with respect to Shareholder&rsquo;s LLIT options or warrants, if any,
which expire on or prior to the Expiration Date, a transfer, sale, or other disposition of Shares to LLIT as payment for the (i)&nbsp;exercise
price of Shareholder&rsquo;s LLIT options or warrants and (ii) taxes applicable to the exercise of Shareholder&rsquo;s LLIT options
or warrants, (3) if Shareholder is a partnership or limited liability company, a transfer to one or more partners or members of
Shareholder or to an Affiliate of Shareholder, or if Shareholder is a trust, a transfer to a beneficiary, provided that in each
such case the applicable transferee has signed a voting agreement in substantially the form hereof, (4) transfers to another holder
of the capital stock of LLIT that has signed a voting agreement in substantially the form hereof, and (5) transfers, sales or other
dispositions as Newegg may otherwise agree in writing in its sole discretion. If any voluntary or involuntary transfer of any Shares
or New Shares covered hereby shall occur (including a transfer or disposition permitted by <U>Section <FONT STYLE="font-size: 12pt">&lrm;</FONT>4(1)</U>
through <U>Section 4(5)</U>, sale by a Shareholder&rsquo;s trustee in bankruptcy, or a sale to a purchaser at any creditor&rsquo;s
or court sale), the transferee (which term, as used herein, shall include any and all transferees and subsequent transferees of
the initial transferee) shall take and hold such Shares and New Shares subject to all of the restrictions, liabilities and rights
under this Agreement, which shall continue in full force and effect, notwithstanding that such transferee is not a Shareholder
and has not executed a counterpart hereof or joinder hereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">5.&nbsp;<U>Conversion
of LLIT Class B Shares</U>. Shareholders acknowledge that a condition to the Closing of the transaction contemplated by the Merger
Agreement, including the Merger, is that Shareholders will convert, effective as of the Closing, all of the LLIT Class B Shares
held beneficially and of record by Shareholders into LLIT Class A Shares (to be renamed as Common Shares). Effective as of immediately
prior to the Closing, Shareholders hereby (a) elect to convert all Class B Common Shares held by such Shareholder into Class A
Common Shares in accordance with Article 7.2.2 of LLIT&rsquo;s current amended and restated memorandum and articles of association,
and (b) agree that all of Shareholders&rsquo; LLIT Class B Shares shall be automatically converted into LLIT Class A Shares without
further action by either Shareholder or LLIT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">6.&nbsp;<U>Amendment
of LLIT Warrant</U>. Reference is made to Section 4(j) of that certain Share Purchase Agreement dated as of April 28, 2016 by and
among LLIT (formerly known as Dehaier Medical Systems Limited) and Hangzhou Liaison Interactive Information Technology Co., Ltd.
(the &ldquo;<U>LLIT Warrant</U>&rdquo;). The parties acknowledge and agree that (i) the LLIT Warrant was initially issued as a
warrant for LLIT Class A Shares (formerly known as common shares), (ii) the board and shareholders of LLIT previously approved
an amendment to the LLIT Warrant to change the underlying shares for which the LLIT Warrant is exercisable from LLIT Class A Shares
to LLIT Class B Shares, (iii) they wish to further amend the LLIT Warrant so that it is once again exercisable for LLIT Class A
Shares, (iv) they wish to clarify that the LLIT Warrant is subject to adjustment for certain share splits and similar events, and
(v) they wish to amend and restate the terms of Section 4(j) to give effect to the reverse split by decreasing the number of shares
underlying the LLIT Warrant and <U>in</U>creasing the exercise price thereof, in each case by a factor of eight (8). Shareholder
and LLIT hereby amend and replace, effective as of the Closing, Section 4(j) of the LLIT Warrant in its entirety to read as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 1in; text-align: left"><U>Issuance of New Warrants
to the Buyer</U>. In consideration of the payment by the Buyer of the Purchase Price, the Buyer and its designees are entitled
to acquire from the Company 125,000 Common Shares at a purchase price of US$17.60 per share (such right to acquire such shares,
the &ldquo;<U>New Warrants</U>&rdquo;). The New Warrants will be exercisable by the Buyer or its designees in whole or in part.
The New Warrants will be exercisable at any time after the Closing. The Company acknowledges and agrees that the shares issuable
upon the exercise of the Warrant shall be in certificated form and bear appropriate legends as prescribed in Section 2(g) hereof.
The exercise price and number of underlying Common Shares for which the New Warrants are exercisable shall be appropriately adjusted
to reflect the effect of any stock split, split-up, reverse stock split, stock dividend, reorganization, recapitalization, reclassification
or other like change with respect to the Common Shares having a record date occurring after October 21, 2020, such that the
aggregate exercise price of the New Warrants and aggregate portion of the Company into which the warrants are exercisable for remain
unchanged before and after such adjustment and such effect. All references to Common Shares shall mean the common shares of the
Company, par value $0.021848 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 1in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">7.&nbsp;<U>Representations
and Warranties of Shareholder</U>. Each Shareholder hereby represents and warrants to LLIT and Newegg as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">(a)&nbsp;If
Shareholder is an entity: (i) such Shareholder is duly organized, validly existing and in good standing under the laws of the jurisdiction
in which it is incorporated, organized or constituted, (ii) such Shareholder has all necessary power and authority to execute and
deliver this Agreement, to perform such Shareholder&rsquo;s obligations hereunder and to consummate the transactions contemplated
hereby, and (iii) the execution and delivery of this Agreement, performance of such Shareholder&rsquo;s obligations hereunder and
the consummation of the transactions contemplated hereby by such Shareholder have been duly authorized by all necessary action
on the part of such Shareholder and no other proceedings on the part of such Shareholder are necessary to authorize this Agreement,
or to consummate the transactions contemplated hereby. If such Shareholder is an individual, such Shareholder has the legal capacity
to execute and deliver this Agreement, to perform such Shareholder&rsquo;s obligations hereunder and to consummate the transactions
contemplated hereby;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">(b)&nbsp;this
Agreement has been duly executed and delivered by or on behalf of such Shareholder and, to such Shareholder&rsquo;s knowledge and
assuming this Agreement constitutes a valid and binding agreement of Newegg and LLIT, constitutes a valid and binding agreement
with respect to such Shareholder, enforceable against such Shareholder in accordance with its terms, except as enforcement may
be limited by general principles of equity whether applied in a court of Law or a court of equity and by bankruptcy, insolvency
and similar Laws affecting creditors&rsquo; rights and remedies generally;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">(c)&nbsp;such
Shareholder beneficially owns the number of Shares indicated opposite such Shareholder&rsquo;s name on <U>Schedule 1</U>, and will
own any New Shares, in each case free and clear of any Liens, and has sole and unrestricted voting power with respect to such Shares
or New Shares and none of the Shares or New Shares is subject to any voting trust or other agreement, arrangement or restriction
with respect to the voting of the Shares or the New Shares, except as contemplated by this Agreement;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">(d)&nbsp;to
the knowledge of such Shareholder, the execution and delivery of this Agreement by such Shareholder does not, and the performance
by such Shareholder of his, her or its obligations hereunder and the compliance by such Shareholder with any provisions hereof
will not, violate or conflict with, result in a breach of or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of,
or result in the creation of any Liens on (in each case, with or without the passage of time or the occurrence of any other event)
any Shares or New Shares pursuant to, any Contract or other obligation or any order, arbitration award, judgment or decree to which
such Shareholder is a party or by which such Shareholder is bound, or any Law, statute, rule or regulation to which such Shareholder
is subject or, in the event that such Shareholder is a corporation, partnership, trust or other entity, any certificate of incorporation,
bylaw or similar organizational document of such Shareholder;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">(e)&nbsp;the
execution and delivery of this Agreement by such Shareholder does not, and the performance of this Agreement by such Shareholder
does not and will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental
Entity or regulatory authority by such Shareholder except for applicable requirements, if any, of the Exchange Act;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">(f)&nbsp;no
investment banker, broker, finder or other intermediary is entitled to a fee or commission from LLIT or Newegg in respect of this
Agreement based upon any Contract made by or on behalf of such Shareholder; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">(g)&nbsp;as
of the date of this Agreement, there is no Action pending or, to the knowledge of such Shareholder, threatened against such Shareholder
that would reasonably be expected to prevent or delay the performance by such Shareholder of his, her or its obligations under
this Agreement in any respect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">8.&nbsp;<U>Irrevocable
Proxy</U>. Subject to the last sentence of this <U>Section <FONT STYLE="font-size: 12pt">&lrm;</FONT>8</U>, by execution of this
Agreement, Shareholders do hereby appoint Newegg and any of its designees with full power of substitution and resubstitution, as
Shareholder&rsquo;s true and lawful attorney and irrevocable proxy, to the fullest extent of Shareholder&rsquo;s rights with respect
to the Shares and New Shares, to vote and exercise all voting and related rights, including the right to sign Shareholder&rsquo;s
name (solely in its capacity as a shareholder) to any shareholder consent, if Shareholder is unable to perform or otherwise does
not perform his, her or its obligations under this Agreement, with respect to such Shares and New Shares solely with respect to
the matters set forth in <U>Section <FONT STYLE="font-size: 12pt">&lrm;</FONT>1</U> hereof. Shareholders intend this proxy to be
irrevocable and coupled with an interest hereunder until the Expiration Date, hereby revokes any proxy previously granted by any
Shareholder with respect to the Shares and represents that none of such previously-granted proxies are irrevocable. The irrevocably
proxy and power of attorney granted herein shall survive the death or incapacity of Shareholder and the obligations of Shareholder
shall be binding on Shareholder&rsquo;s heirs, personal representatives, successors, transferees and assigns. Shareholder hereby
agrees not to grant any subsequent powers of attorney or proxies with respect to any Shares with respect to the matters set forth
in <U>Section <FONT STYLE="font-size: 12pt">&lrm;</FONT>1</U> until after the Expiration Date. Notwithstanding anything contained
herein to the contrary, this irrevocable proxy shall automatically terminate upon the Expiration Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">9.&nbsp;<U>Other
Remedies; Specific Performance</U>. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a
party will be deemed cumulative with, and not exclusive of, any other remedy conferred hereby, or by Law or equity upon such party,
and the exercise by a party of any one remedy will not preclude the exercise of any other remedy. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in the Court of Chancery
of the State of Delaware, <I><U>provided</U></I>, that if jurisdiction is not then available in the Court of Chancery of the State
of Delaware, then in any federal court located in the State of Delaware or any other Delaware state court, this being in addition
to any other remedy to which such party is entitled at law or in equity. Each of the parties hereby further waives (a) any defense
in any action for specific performance that a remedy at law would be adequate and (b) any requirement under any law to post security
as a prerequisite to obtaining equitable relief.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">10.&nbsp;<U>Directors
and Officers</U>. This Agreement shall apply to Shareholder solely in Shareholder&rsquo;s capacity as a shareholder of LLIT and/or
holder of LLIT options or warrants and not in Shareholder&rsquo;s capacity as a director, officer or employee of LLIT or its Subsidiaries
or in Shareholder&rsquo;s capacity as a trustee or fiduciary of any employee benefit plan or trust. Notwithstanding any provision
of this Agreement to the contrary, nothing in this Agreement shall (or require Shareholder to attempt to) limit or restrict a director
and/or officer of LLIT in the exercise of his or her fiduciary duties as a director and/or officer of LLIT or in his or her capacity
as a trustee or fiduciary of any employee benefit plan or trust or prevent or be construed to create any obligation on the part
of any director and/or officer of LLIT or any trustee or fiduciary of any employee benefit plan or trust from taking any action
in his or her capacity as such director, officer, trustee and/or fiduciary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">11.&nbsp;<U>No
Ownership Interest</U>. Nothing contained in this Agreement shall be deemed to vest in Newegg any direct or indirect ownership
or incidence of ownership of or with respect to any Shares. All rights, ownership and economic benefits of and relating to the
Shares shall remain vested in and belong to Shareholder, and Newegg does not have authority to manage, direct, superintend, restrict,
regulate, govern, or administer any of the policies or operations of LLIT or exercise any power or authority to direct Shareholder
in the voting of any of the Shares, except as otherwise provided herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">12.&nbsp;<U>Termination</U>.
This Agreement shall terminate and shall have no further force or effect as of the Expiration Date. Notwithstanding the foregoing,
upon termination or expiration of this Agreement, no party shall have any further obligations or liabilities under this Agreement;
<I><U>provided</U></I><U>, <I>however</I></U>, nothing set forth in this <U>Section <FONT STYLE="font-size: 12pt">&lrm;</FONT>12</U>
or elsewhere in this Agreement shall relieve any party from liability for any fraud or for any willful and material breach of this
Agreement prior to termination hereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">13.&nbsp;<U>Further
Assurances</U>. Shareholder shall, from time to time, execute and deliver, or cause to be executed and delivered, such additional
or further consents, documents and other instruments as Newegg or LLIT may reasonably request for the purpose of effectively carrying
out the transactions contemplated by this Agreement and the Merger Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">14.&nbsp;<U>Disclosure</U>.
Shareholder hereby agrees that LLIT and Newegg may publish and disclose in any registration statement, any prospectus filed with
any regulatory authority in connection with the transactions contemplated by this Agreement and the Merger Agreement and any related
documents filed with such regulatory authority and as otherwise required by Law, Shareholder&rsquo;s identity and ownership of
Shares and the nature of Shareholder&rsquo;s commitments, arrangements and understandings under this Agreement and may further
file this Agreement as an exhibit to any registration statement or prospectus or in any other filing made by LLIT or Newegg as
required by Law or the terms of the Merger Agreement, including with the SEC or other regulatory authority, relating to the transactions
contemplated thereby, all subject to prior review and an opportunity to comment by Shareholder&rsquo;s counsel. Prior to the Closing,
Shareholder shall not, and shall use its reasonable best efforts to cause its representatives not to, directly or indirectly, make
any press release, public announcement or other public communication that criticizes or disparages this Agreement or the Merger
Agreement or any of the transactions contemplated thereby, without the prior written consent of LLIT and Newegg, provided that
the foregoing shall not limit or affect any actions taken by Shareholder (or any affiliated officer or director of Shareholder)
that would be permitted to be taken by Shareholder, LLIT or Newegg pursuant to the Merger Agreement; provided, further, that the
foregoing shall not effect any actions of Shareholder the prohibition of which would be prohibited under applicable Law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">15.&nbsp;<U>Notice</U>.
All notices and other communications hereunder shall be in writing and shall be deemed given when delivered personally, one day
after being delivered to a nationally recognized overnight courier or on the Business Day received (or the next Business Day if
received after 5:00 p.m. local time or on a weekend or day on which banks are closed) when sent via facsimile (with a confirmatory
copy sent by overnight courier) to the parties at the following addresses (or at such other address for a party as shall be specified
by like notice) to Newegg or LLIT, as the case may be, in accordance with Section 9.1 of the Merger Agreement and to Shareholder
at his, her or its address or email address (providing confirmation of transmission) set forth on <U>Schedule 1</U> attached hereto
(or at such other address for a party as shall be specified by like notice).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">16.&nbsp;<U>Severability</U>.
If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms, conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long
as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to
any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties
shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible
in a mutually acceptable manner in order that the transactions contemplated by this Agreement may be consummated as originally
contemplated to the fullest extent possible.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">17.&nbsp;<U>Assignability</U>.
This Agreement shall be binding upon, and shall be enforceable by and inure solely to the benefit of, the parties hereto and their
respective successors and assigns; <I><U>provided, however</U></I>, neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">18.&nbsp;<U>Waivers</U>.
No waivers of any breach of this Agreement extended by Newegg or LLIT to a Shareholder shall be construed as a waiver of any rights
or remedies of Newegg or LLIT, as applicable, with respect to any other shareholder of LLIT who has executed an agreement substantially
in the form of this Agreement or any other Shareholder with respect to Shares held or subsequently held by such shareholder or
with respect to any subsequent breach of Shareholder or any other shareholder of LLIT. No failure or delay of any party in exercising
any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other
or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereunder are cumulative
and are not exclusive of any rights or remedies which they would otherwise have hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">19.&nbsp;<U>Governing
Law</U>. Except to the extent that the laws of British Virgin Islands shall apply to the internal corporate governance of LLIT,
this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to
any choice or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the
State of Delaware.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">20.&nbsp;<U>Specific
Performance; Submission to Jurisdiction</U>. The parties hereto agree that irreparable damage would occur if any of the provisions
of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed
that each of the parties shall be entitled (in addition to any other remedy that may be available to it, including monetary damages)
to seek an injunction or injunctions to prevent breaches of this Agreement and to seek to enforce specifically the terms and provisions
of this Agreement exclusively in the Court of Chancery of the State of Delaware; provided, that if jurisdiction is not then available
in the Court of Chancery of the State of Delaware, then any such legal action or proceeding may be brought in any federal court
located in the State of Delaware or any other Delaware state court. In addition, each of the parties irrevocably agrees that any
legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition
and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other
party hereto or its successors or assigns, shall be brought and determined exclusively in the Court of Chancery of the State of
Delaware; provided, that if jurisdiction is not then available in the Court of Chancery of the State of Delaware, then any such
legal action or proceeding may be brought in any federal court located in the State of Delaware or any other Delaware state court.
Each of the parties hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property,
generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action
relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the aforesaid courts.
Each of the parties hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise,
in any action or proceeding with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction
of the above named courts for any reason other than the failure to serve, (b) any claim that it or its property is exempt or immune
from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment
prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent
permitted by the applicable law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient
forum, (ii) the venue of such suit, action or proceeding is improper, or (iii) this Agreement, or the subject matter of this Agreement,
may not be enforced in or by such courts. LLIT, Newegg and Shareholder hereby consent to service being made through the notice
procedures set forth in <U>Section <FONT STYLE="font-size: 12pt">&lrm;</FONT>15</U> above and agree that service of any process,
summons, notice or document by registered mail (return receipt requested and first-class postage prepaid) to the respective addresses
as provided in <U>Section <FONT STYLE="font-size: 12pt">&lrm;</FONT>15</U> shall be effective service of process for any suit or
proceeding in connection with this Agreement or the transactions contemplated by this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">21.&nbsp;<U>Waiver
of Jury Trial</U>. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (a) NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER, (b) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (c) EACH PARTY MAKES
THIS WAIVER VOLUNTARILY, AND (d) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS <U>SECTION <FONT STYLE="font-size: 12pt">&lrm;</FONT>21</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">22.&nbsp;<U>No
Agreement Until Executed</U>. Irrespective of negotiations among the parties or the exchanging of drafts of this Agreement, this
Agreement shall not constitute or be deemed to evidence a Contract, agreement, arrangement or understanding between the parties
hereto unless and until (a) the LLIT Board has approved the Merger Agreement and the transactions contemplated thereby, (b) the
Merger Agreement is executed by all parties thereto, and (c) this Agreement is executed by all parties hereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">23.&nbsp;<U>Entire
Agreement</U>. This Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter of this Agreement. This Agreement is not intended to confer upon
any Person other than the parties hereto any rights or remedies hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">24.&nbsp;<U>Counterparts</U>.
This Agreement may be executed in counterparts, all of which shall be considered one and the same agreement, and shall become effective
when one or more counterparts have been signed by each of the parties and delivered to the other parties. In the event that any
signature is delivered by facsimile transmission or email attachment, such signature shall create a valid and binding obligation
of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or email-attached
signature page were an original thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">25.&nbsp;<U>Amendment</U>.
This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">26.&nbsp;<U>Fees
and Expenses</U>. Except as otherwise specifically provided herein, the Merger Agreement or any other agreement contemplated by
the Merger Agreement to which a party hereto is a party, each party hereto shall bear its own expenses in connection with this
Agreement and the transactions contemplated hereby.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">27.&nbsp;<U>Voluntary
Execution of Agreement</U>. This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf
of the parties. Each of the parties hereby acknowledges, represents and warrants that (a) it has read and fully understood this
Agreement and the implications and consequences thereof; (b) it has been represented in the preparation, negotiation, and execution
of this Agreement by legal counsel of its own choice, or it has made a voluntary and informed decision to decline to seek such
counsel; and (c) it is fully aware of the legal and binding effect of this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: left">28.&nbsp;<U>Construction</U>.
When a reference is made in this Agreement to a Section or Schedule such reference shall be to a Section or Schedule of this Agreement
unless otherwise indicated. The headings contained in this Agreement or in any Schedule are for convenience of reference purposes
only and shall not affect in any way the meaning or interpretation of this Agreement. All words used in this Agreement will be
construed to be of such gender or number as the circumstances require. Any capitalized terms used in any Schedule but not otherwise
defined therein shall have the meaning as defined in this Agreement. All Schedules annexed hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth herein. The word &ldquo;including&rdquo; and words of similar
import when used in this Agreement will mean &ldquo;including, without limitation,&rdquo; unless otherwise specified. The words
&ldquo;hereof,&rdquo; &ldquo;herein&rdquo; and &ldquo;hereunder&rdquo; and words of similar import when used in this Agreement
shall refer to the Agreement as a whole and not to any particular provision in this Agreement. The term &ldquo;or&rdquo; is not
exclusive. The word &ldquo;will&rdquo; shall be construed to have the same meaning and effect as the word &ldquo;shall.&rdquo;
References to days mean calendar days unless otherwise specified.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">[<I>Remainder of Page has Intentionally
Been Left Blank</I>]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">EXECUTED as of the date first above written.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><B>SHAREHOLDERS</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 60%">&nbsp;</TD>
    <TD STYLE="width: 4%">&nbsp;</TD>
    <TD STYLE="width: 36%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">HANGZHOU LIANLUO INTERACTIVE INFORMATION TECHNOLOGY CO., LTD.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>By:</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid">/s/ Zhitao He</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Name:</TD>
    <TD>Zhitao He</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD>Chief Executive Officer</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">HYPERFINITE GALAXY HOLDING LIMITED</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>By:</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid">/s/ Zhitao He</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Name:&nbsp;</TD>
    <TD>Zhitao He</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD>Chief Executive Officer</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><I>[Signature Page
to Support Agreement]</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">EXECUTED as of the date first above written.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><B>LIANLUO SMART LIMITED</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 60%">&nbsp;</TD>
    <TD STYLE="width: 4%">&nbsp;</TD>
    <TD STYLE="width: 36%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>By: </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid">/s/ Bin Lin</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">Name: Bin Lin</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">Title: Chief Executive Officer</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><B>NEWEGG INC.</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>By: </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid">/s/ Anthony Chow</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">Name: Anthony Chow</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">Title: Chief Executive Officer</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><I>[Signature Page
to Support Agreement]</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>SCHEDULE 1</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 67%; font-weight: bold; text-align: left; padding-left: 0.5pt">Name,
    Address and Email Address of Shareholder</TD><TD STYLE="padding-bottom: 1.5pt; width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 10%; font-weight: bold; text-align: center; padding-left: 0.5pt">Shares and<BR> Class of<BR> LLIT<BR> Common <BR> Shares*</TD><TD STYLE="padding-bottom: 1.5pt; width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 10%; font-weight: bold; text-align: center; padding-left: 3.35pt">LLIT<BR> Options and<BR> underlying<BR> class of<BR> common<BR> shares</TD><TD STYLE="padding-bottom: 1.5pt; width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 10%; font-weight: bold; text-align: center; padding-left: 4.15pt">LLIT<BR> Warrants<BR> and<BR> underlying<BR> class of<BR> common<BR> shares*</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center; padding-left: 0.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 0.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 0.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; text-align: left; padding-left: 0.5pt">Hangzhou Lianluo Interactive Information
    Technology Co., Ltd.</TD><TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center; padding-left: 0.5pt">1,388,888&nbsp;Class&nbsp;B Common Shares</TD><TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center; padding-left: 0.5pt">None</TD><TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center; padding-left: 0.5pt">Warrants exercisable for 125,000 Class B Common Shares</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center; padding-left: 0.5pt">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center; padding-left: 0.5pt">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center; padding-left: 0.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; text-align: left; padding-left: 0.5pt">Hyperfinite Galaxy Holding Limited</TD><TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center; padding-left: 0.5pt">58,937&nbsp;Class&nbsp;A Common Shares</TD><TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center; padding-left: 0.5pt">None</TD><TD STYLE="text-align: center; vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center; padding-left: 0.5pt">None</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">*&nbsp;All numbers of shares
and warrants presented in the foregoing table give effect to the 1-for-8 reverse share split effected October 21, 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="text-align: right; margin: 0"><B><A NAME="annexc_001"></A>Annex C</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SUPPORT AGREEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">THIS SUPPORT AGREEMENT
(this &ldquo;<U>Agreement</U>&rdquo;), dated as of October 23, 2020, is made by and among Lianluo Smart Limited, a business company
incorporated under the laws of the British Virgin Islands (&ldquo;<U>LLIT</U>&rdquo;), Newegg Inc., a Delaware corporation (&ldquo;<U>Newegg</U>&rdquo;),
and the undersigned holder (&ldquo;<U>Shareholder</U>&rdquo;) of LLIT Class A Shares(the &ldquo;<U>Shares</U>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">WHEREAS, LLIT, Lightning
Delaware Sub, Inc., a Delaware corporation (&ldquo;<U>Merger Sub</U>&rdquo;), and Newegg, have entered into an Agreement and Plan
of Merger, dated of even date herewith (the &ldquo;<U>Merger Agreement</U>&rdquo;), providing for the merger of Merger Sub with
and into Newegg, with Newegg surviving as the wholly owned subsidiary of LLIT (the &ldquo;<U>Merger</U>&rdquo;);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">WHEREAS, Shareholder
beneficially owns and has sole voting power with respect to the number of Shares, and holds the LLIT options or warrants to acquire
shares of LLIT, set forth opposite Shareholder&rsquo;s name on <U>Schedule 1</U> attached hereto;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">WHEREAS, as an inducement
and a condition to the willingness of LLIT, Merger Sub and Newegg to enter into the Merger Agreement, and in consideration of the
substantial expenses incurred and to be incurred by them in connection therewith, Shareholder has agreed to enter into and perform
this Agreement; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">WHEREAS, all capitalized terms used in this
Agreement without definition herein shall have the meanings ascribed to them in the Merger Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">NOW, THEREFORE, in
consideration of, and as a condition to, LLIT, Merger Sub and Newegg&rsquo;s entering into the Merger Agreement and proceeding
with the transactions contemplated thereby, and in consideration of the substantial expenses incurred and to be incurred by them
in connection therewith, Shareholder, LLIT and Newegg agree as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">1. <U>Agreement
to Vote Shares</U>. Shareholder agrees that, prior to the Expiration Date (as defined in <U>Section <FONT STYLE="font-size: 12pt">&lrm;</FONT>2
</U>below), at any meeting of the shareholders of LLIT or any adjournment or postponement thereof, or in connection with any written
consent of the shareholders of LLIT, with respect to the Proposals (as defined below), Shareholder shall:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">(a) appear
at such meeting or otherwise cause the Shares and any New Shares (as defined in <U>Section <FONT STYLE="font-size: 12pt">&lrm;</FONT>3</U>
below) to be counted as present thereat for purposes of calculating a quorum;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">(b) from
and after the date hereof until the Expiration Date, vote (or cause to be voted) all of the Shares and any New Shares that Shareholder
shall be entitled to so vote: (i) in favor of (A) the proposal to adopt the Merger Agreement and the Merger contemplated thereby,
(B) the proposal to adopt the equity transfer agreement, dated on or about October 23, 2020, and as it may be amended from time
to time, among Beijing Fenjin Times Technology Development Co., Ltd., or the Purchaser, Lianluo Connection Medical Wearable Device
Technology (Beijing) Co., Ltd., or Lianluo Connection, and LLIT, pursuant to which LLIT will sell of all of its equity interests
in Lianluo Connection to the Purchaser immediately following completion of the Merger, (C) the proposal to eliminate unissued Class
B common shares and rename class A common shares as common shares, (D) the proposal to approve a share combination of issued and
outstanding common shares of LLIT by a ratio of not less than one-for-two and not more than one-for-fifty at any time prior to
June 30, 2021, with the exact ratio to be set at a whole number within this range, as determined by LLIT&rsquo;s board of directors
in its sole discretion, (E)the proposal to increase the number of LLIT common shares that LLIT is authorized to issue, (F) the
proposal to change the name of LLIT to &ldquo;Newegg Commerce, Inc.&rdquo;, (G) the proposal to amend and restate LLIT&rsquo;s
current amended and restated memorandum and articles of association to effect the foregoing and to make certain other amendments
described in the preliminary proxy statement/prospectus on Form F-4 filed by LLIT with the Securities and Exchange Commission (the
&ldquo;SEC&rdquo;), and (H) the proposal to approve the adjournment of the shareholder meeting if necessary to solicit additional
proxies if there are not sufficient votes to approve the above proposals at the time of the shareholder meeting, or any adjournment
or postponement thereof ((A) through (H) collectively, the &ldquo;<U>Proposals</U>&rdquo;); and (ii) against any agreement, transaction
or other matter that is intended to, or would reasonably be expected to, impede, interfere with, delay, postpone, discourage or
materially and adversely affect the consummation of the Proposals. Shareholder shall not take or commit or agree to take any action
inconsistent with the foregoing and will take such further affirmative steps as may be reasonably required to effect the foregoing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">2. <U>Expiration
Date</U>. As used in this Agreement, the term &ldquo;<U>Expiration Date</U>&rdquo; shall mean the earlier to occur of (a) the
date and time as the Merger Agreement shall have been terminated pursuant to the terms thereof, or (b) the date on which the Closing
occurs in accordance with the Merger Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">3. <U>Additional
Purchases</U>. Shareholder agrees that any LLIT Class A Shares or LLIT Class B Shares or other equity securities of LLIT that
Shareholder purchases or with respect to which Shareholder otherwise acquires sole or shared voting power (including any proxy,
other than to the extent such proxy expressly limits such proxy holder&rsquo;s ability to act as provided herein) after the execution
of this Agreement and prior to the Expiration Date, whether by the exercise of any LLIT options, warrants or otherwise, including,
without limitation, by gift, succession, in the event of a stock split or as a dividend or distribution of any Shares (&ldquo;<U>New
Shares</U>&rdquo;), shall be subject to the terms and conditions of this Agreement to the same extent as if they constituted the
Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">4. <U>Share
Transfers</U>. From and after the date hereof until the Expiration Date, Shareholder shall not, directly or indirectly, (a) sell,
assign, transfer, tender, or otherwise dispose of (including, without limitation, by the creation of any Liens) any Shares or
any New Shares acquired, (b) deposit any Shares or New Shares into a voting trust or enter into a voting agreement or similar
arrangement with respect to such Shares or New Shares or grant any proxy or power of attorney with respect thereto (other than
this Agreement), (c) enter into any Contract, option, commitment or other arrangement or understanding with respect to the direct
or indirect sale, transfer, assignment or other disposition of (including, without limitation, by the creation of any Liens) any
Shares or New Shares, or (d) take any action that would make any representation or warranty of Shareholder contained herein untrue
or incorrect or have the effect of preventing or disabling Shareholder from performing Shareholder&rsquo;s obligations under this
Agreement. Notwithstanding the foregoing, Shareholder may make (1) transfers by will or by operation of Law or other transfers
for estate-planning purposes, in which case this Agreement shall bind the transferee, (2) with respect to Shareholder&rsquo;s
LLIT options or warrants, if any, which expire on or prior to the Expiration Date, a transfer, sale, or other disposition of Shares
to LLIT as payment for the (i)&nbsp;exercise price of Shareholder&rsquo;s LLIT options or warrants and (ii) taxes applicable to
the exercise of Shareholder&rsquo;s LLIT options or warrants, (3) if Shareholder is a partnership or limited liability company,
a transfer to one or more partners or members of Shareholder or to an Affiliate of Shareholder, or if Shareholder is a trust,
a transfer to a beneficiary, provided that in each such case the applicable transferee has signed a voting agreement in substantially
the form hereof, (4)&nbsp;transfers to another holder of the capital stock of LLIT that has signed a voting agreement in substantially
the form hereof, and (5) transfers, sales or other dispositions as Newegg may otherwise agree in writing in its sole discretion.
If any voluntary or involuntary transfer of any Shares or New Shares covered hereby shall occur (including a transfer or disposition
permitted by <U>Section <FONT STYLE="font-size: 12pt">&lrm;</FONT>4(1)</U> through <U>Section 4(5)</U>, sale by a Shareholder&rsquo;s
trustee in bankruptcy, or a sale to a purchaser at any creditor&rsquo;s or court sale), the transferee (which term, as used herein,
shall include any and all transferees and subsequent transferees of the initial transferee) shall take and hold such Shares and
New Shares subject to all of the restrictions, liabilities and rights under this Agreement, which shall continue in full force
and effect, notwithstanding that such transferee is not a Shareholder and has not executed a counterpart hereof or joinder hereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">5. <U>Representations
and Warranties of Shareholder</U>. Shareholder hereby represents and warrants to LLIT and Newegg as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">(a) If
Shareholder is an entity: (i) Shareholder is duly organized, validly existing and in good standing under the laws of the jurisdiction
in which it is incorporated, organized or constituted, (ii) Shareholder has all necessary power and authority to execute and deliver
this Agreement, to perform Shareholder&rsquo;s obligations hereunder and to consummate the transactions contemplated hereby, and
(iii) the execution and delivery of this Agreement, performance of Shareholder&rsquo;s obligations hereunder and the consummation
of the transactions contemplated hereby by Shareholder have been duly authorized by all necessary action on the part of Shareholder
and no other proceedings on the part of Shareholder are necessary to authorize this Agreement, or to consummate the transactions
contemplated hereby. If Shareholder is an individual, Shareholder has the legal capacity to execute and deliver this Agreement,
to perform Shareholder&rsquo;s obligations hereunder and to consummate the transactions contemplated hereby;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">(b) this
Agreement has been duly executed and delivered by or on behalf of Shareholder and, to Shareholder&rsquo;s knowledge and assuming
this Agreement constitutes a valid and binding agreement of Newegg and LLIT, constitutes a valid and binding agreement with respect
to Shareholder, enforceable against Shareholder in accordance with its terms, except as enforcement may be limited by general principles
of equity whether applied in a court of Law or a court of equity and by bankruptcy, insolvency and similar Laws affecting creditors&rsquo;
rights and remedies generally;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">(c)
Shareholder beneficially owns the number of Shares indicated opposite Shareholder&rsquo;s name on <U>Schedule 1</U>, and will own
any New Shares, in each case free and clear of any Liens except as otherwise set forth in <U>Schedule 1</U>, and has sole and unrestricted
voting power with respect to such Shares or New Shares and none of the Shares or New Shares is subject to any voting trust or other
agreement, arrangement or restriction with respect to the voting of the Shares or the New Shares, except as contemplated by this
Agreement;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">(d) to
the knowledge of Shareholder, the execution and delivery of this Agreement by Shareholder does not, and the performance by Shareholder
of his, her or its obligations hereunder and the compliance by Shareholder with any provisions hereof will not, violate or conflict
with, result in a breach of or constitute a default (or an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of any
Liens on (in each case, with or without the passage of time or the occurrence of any other event) any Shares or New Shares pursuant
to, any Contract or other obligation or any order, arbitration award, judgment or decree to which Shareholder is a party or by
which Shareholder is bound, or any Law, statute, rule or regulation to which Shareholder is subject or, in the event that Shareholder
is a corporation, partnership, trust or other entity, any certificate of incorporation, bylaw or similar organizational document
of Shareholder;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">(e) the
execution and delivery of this Agreement by Shareholder does not, and the performance of this Agreement by Shareholder does not
and will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity
or regulatory authority by Shareholder except for applicable requirements, if any, of the Exchange Act;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">(f) no
investment banker, broker, finder or other intermediary is entitled to a fee or commission from LLIT or Newegg in respect of this
Agreement based upon any Contract made by or on behalf of Shareholder; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">(g) as
of the date of this Agreement, there is no Action pending or, to the knowledge of Shareholder, threatened against Shareholder that
would reasonably be expected to prevent or delay the performance by Shareholder of his, her or its obligations under this Agreement
in any respect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">6. <U>Irrevocable
Proxy</U>. Subject to the last sentence of this <U>Section <FONT STYLE="font-size: 12pt">&lrm;</FONT>6</U>, by execution of this
Agreement, Shareholder does hereby appoint Newegg and any of its designees with full power of substitution and resubstitution,
as Shareholder&rsquo;s true and lawful attorney and irrevocable proxy, to the fullest extent of Shareholder&rsquo;s rights with
respect to the Shares and New Shares, to vote and exercise all voting and related rights, including the right to sign Shareholder&rsquo;s
name (solely in its capacity as a shareholder) to any shareholder consent, if Shareholder is unable to perform or otherwise does
not perform his, her or its obligations under this Agreement, with respect to such Shares and New Shares solely with respect to
the matters set forth in <U>Section <FONT STYLE="font-size: 12pt">&lrm;</FONT>1</U> hereof. Shareholder intends this proxy to
be irrevocable and coupled with an interest hereunder until the Expiration Date, hereby revokes any proxy previously granted by
Shareholder with respect to the Shares and represents that none of such previously-granted proxies are irrevocable. The irrevocably
proxy and power of attorney granted herein shall survive the death or incapacity of Shareholder and the obligations of Shareholder
shall be binding on Shareholder&rsquo;s heirs, personal representatives, successors, transferees and assigns. Shareholder hereby
agrees not to grant any subsequent powers of attorney or proxies with respect to any Shares with respect to the matters set forth
in <U>Section <FONT STYLE="font-size: 12pt">&lrm;</FONT>1</U> until after the Expiration Date. Notwithstanding anything contained
herein to the contrary, this irrevocable proxy shall automatically terminate upon the Expiration Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">7. <U>Other
Remedies; Specific Performance</U>. Except as otherwise provided herein, any and all remedies herein expressly conferred upon
a party will be deemed cumulative with, and not exclusive of, any other remedy conferred hereby, or by Law or equity upon such
party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy. The parties hereto agree
that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction
or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in the Court
of Chancery of the State of Delaware, <I><U>provided</U></I>, that if jurisdiction is not then available in the Court of Chancery
of the State of Delaware, then in any federal court located in the State of Delaware or any other Delaware state court, this being
in addition to any other remedy to which such party is entitled at law or in equity. Each of the parties hereby further waives
(a) any defense in any action for specific performance that a remedy at law would be adequate and (b) any requirement under any
law to post security as a prerequisite to obtaining equitable relief.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">8. <U>Directors
and Officers</U>. This Agreement shall apply to Shareholder solely in Shareholder&rsquo;s capacity as a shareholder of LLIT and/or
holder of LLIT options or warrants and not in Shareholder&rsquo;s capacity as a director, officer or employee of LLIT or its Subsidiaries
or in Shareholder&rsquo;s capacity as a trustee or fiduciary of any employee benefit plan or trust. Notwithstanding any provision
of this Agreement to the contrary, nothing in this Agreement shall (or require Shareholder to attempt to) limit or restrict a
director and/or officer of LLIT in the exercise of his or her fiduciary duties as a director and/or officer of LLIT or in his
or her capacity as a trustee or fiduciary of any employee benefit plan or trust or prevent or be construed to create any obligation
on the part of any director and/or officer of LLIT or any trustee or fiduciary of any employee benefit plan or trust from taking
any action in his or her capacity as such director, officer, trustee and/or fiduciary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">9. <U>No
Ownership Interest</U>. Nothing contained in this Agreement shall be deemed to vest in Newegg any direct or indirect ownership
or incidence of ownership of or with respect to any Shares. All rights, ownership and economic benefits of and relating to the
Shares shall remain vested in and belong to Shareholder, and Newegg does not have authority to manage, direct, superintend, restrict,
regulate, govern, or administer any of the policies or operations of LLIT or exercise any power or authority to direct Shareholder
in the voting of any of the Shares, except as otherwise provided herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">10. <U>Termination</U>.
This Agreement shall terminate and shall have no further force or effect as of the Expiration Date. Notwithstanding the foregoing,
upon termination or expiration of this Agreement, no party shall have any further obligations or liabilities under this Agreement;
<I><U>provided</U></I><U>, <I>however</I></U>, nothing set forth in this <U>Section <FONT STYLE="font-size: 12pt">&lrm;</FONT>10
</U>or elsewhere in this Agreement shall relieve any party from liability for any fraud or for any willful and material breach
of this Agreement prior to termination hereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">11. <U>Further
Assurances</U>. Shareholder shall, from time to time, execute and deliver, or cause to be executed and delivered, such additional
or further consents, documents and other instruments as Newegg or LLIT may reasonably request for the purpose of effectively carrying
out the transactions contemplated by this Agreement and the Merger Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">12. <U>Disclosure</U>.
Shareholder hereby agrees that LLIT and Newegg may publish and disclose in any registration statement, any prospectus filed with
any regulatory authority in connection with the transactions contemplated by this Agreement and the Merger Agreement and any related
documents filed with such regulatory authority and as otherwise required by Law, Shareholder&rsquo;s identity and ownership of
Shares and the nature of Shareholder&rsquo;s commitments, arrangements and understandings under this Agreement and may further
file this Agreement as an exhibit to any registration statement or prospectus or in any other filing made by LLIT or Newegg as
required by Law or the terms of the Merger Agreement, including with the SEC or other regulatory authority, relating to the transactions
contemplated thereby, all subject to prior review and an opportunity to comment by Shareholder&rsquo;s counsel. Prior to the Closing,
Shareholder shall not, and shall use its reasonable best efforts to cause its representatives not to, directly or indirectly,
make any press release, public announcement or other public communication that criticizes or disparages this Agreement or the
Merger Agreement or any of the transactions contemplated thereby, without the prior written consent of LLIT and Newegg, provided
that the foregoing shall not limit or affect any actions taken by Shareholder (or any affiliated officer or director of Shareholder)
that would be permitted to be taken by Shareholder, LLIT or Newegg pursuant to the Merger Agreement; provided, further, that the
foregoing shall not effect any actions of Shareholder the prohibition of which would be prohibited under applicable Law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">13. <U>Notice</U>.
All notices and other communications hereunder shall be in writing and shall be deemed given when delivered personally, one day
after being delivered to a nationally recognized overnight courier or on the Business Day received (or the next Business Day if
received after 5:00 p.m. local time or on a weekend or day on which banks are closed) when sent via facsimile (with a confirmatory
copy sent by overnight courier) to the parties at the following addresses (or at such other address for a party as shall be specified
by like notice) to Newegg or LLIT, as the case may be, in accordance with Section 9.1 of the Merger Agreement and to Shareholder
at his, her or its address or email address (providing confirmation of transmission) set forth on <U>Schedule 1</U> attached hereto
(or at such other address for a party as shall be specified by like notice).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">14. <U>Severability</U>.
If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms, conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long
as the economic and legal substance of the transactions contemplated hereby are not affected in any manner materially adverse
to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the
parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions contemplated by this Agreement may be consummated as originally
contemplated to the fullest extent possible.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">15. <U>Assignability</U>.
This Agreement shall be binding upon, and shall be enforceable by and inure solely to the benefit of, the parties hereto and their
respective successors and assigns; <I><U>provided, however</U></I>, neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">16. <U>Waivers</U>.
No waivers of any breach of this Agreement extended by Newegg or LLIT to Shareholder shall be construed as a waiver of any rights
or remedies of Newegg or LLIT, as applicable, with respect to any other shareholder of LLIT who has executed an agreement substantially
in the form of this Agreement with respect to Shares held or subsequently held by such shareholder or with respect to any subsequent
breach of Shareholder or any other shareholder of LLIT. No failure or delay of any party in exercising any right or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof
or the exercise of any other right or power. The rights and remedies of the parties hereunder are cumulative and are not exclusive
of any rights or remedies which they would otherwise have hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">17. <U>Governing
Law</U>. Except to the extent that the laws of British Virgin Islands shall apply to the internal corporate governance of LLIT,
this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect
to any choice or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than
the State of Delaware.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">18. <U>Specific
Performance; Submission to Jurisdiction</U>. The parties hereto agree that irreparable damage would occur if any of the provisions
of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed
that each of the parties shall be entitled (in addition to any other remedy that may be available to it, including monetary damages)
to seek an injunction or injunctions to prevent breaches of this Agreement and to seek to enforce specifically the terms and provisions
of this Agreement exclusively in the Court of Chancery of the State of Delaware; provided, that if jurisdiction is not then available
in the Court of Chancery of the State of Delaware, then any such legal action or proceeding may be brought in any federal court
located in the State of Delaware or any other Delaware state court. In addition, each of the parties irrevocably agrees that any
legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition
and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other
party hereto or its successors or assigns, shall be brought and determined exclusively in the Court of Chancery of the State of
Delaware; provided, that if jurisdiction is not then available in the Court of Chancery of the State of Delaware, then any such
legal action or proceeding may be brought in any federal court located in the State of Delaware or any other Delaware state court.
Each of the parties hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property,
generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action
relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the aforesaid courts.
Each of the parties hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise,
in any action or proceeding with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction
of the above named courts for any reason other than the failure to serve, (b) any claim that it or its property is exempt or immune
from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment
prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent
permitted by the applicable law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient
forum, (ii) the venue of such suit, action or proceeding is improper, or (iii) this Agreement, or the subject matter of this Agreement,
may not be enforced in or by such courts. LLIT, Newegg and Shareholder hereby consent to service being made through the notice
procedures set forth in <U>Section <FONT STYLE="font-size: 12pt">&lrm;</FONT>13</U> above and agree that service of any process,
summons, notice or document by registered mail (return receipt requested and first-class postage prepaid) to the respective addresses
as provided in <U>Section <FONT STYLE="font-size: 12pt">&lrm;</FONT>13</U> shall be effective service of process for any suit
or proceeding in connection with this Agreement or the transactions contemplated by this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">19. <U>Waiver
of Jury Trial</U>. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT,
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (a) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER, (b) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (c) EACH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (d) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS <U>SECTION <FONT STYLE="font-size: 12pt">&lrm;</FONT>19</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">20. <U>No
Agreement Until Executed</U>. Irrespective of negotiations among the parties or the exchanging of drafts of this Agreement, this
Agreement shall not constitute or be deemed to evidence a Contract, agreement, arrangement or understanding between the parties
hereto unless and until (a) the LLIT Board has approved the Merger Agreement and the transactions contemplated thereby, (b) the
Merger Agreement is executed by all parties thereto, and (c) this Agreement is executed by all parties hereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">21. <U>Entire
Agreement</U>. This Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter of this Agreement. This Agreement is not intended to confer upon
any Person other than the parties hereto any rights or remedies hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">22. <U>Counterparts</U>.
This Agreement may be executed in counterparts, all of which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. In the event
that any signature is delivered by facsimile transmission or email attachment, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile
or email-attached signature page were an original thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">23. <U>Amendment</U>.
This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">24. <U>Fees
and Expenses</U>. Except as otherwise specifically provided herein, the Merger Agreement or any other agreement contemplated by
the Merger Agreement to which a party hereto is a party, each party hereto shall bear its own expenses in connection with this
Agreement and the transactions contemplated hereby.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">25. <U>Voluntary
Execution of Agreement</U>. This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf
of the parties. Each of the parties hereby acknowledges, represents and warrants that (a) it has read and fully understood this
Agreement and the implications and consequences thereof; (b) it has been represented in the preparation, negotiation, and execution
of this Agreement by legal counsel of its own choice, or it has made a voluntary and informed decision to decline to seek such
counsel; and (c) it is fully aware of the legal and binding effect of this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">26. <U>Construction</U>.
When a reference is made in this Agreement to a Section or Schedule such reference shall be to a Section or Schedule of this Agreement
unless otherwise indicated. The headings contained in this Agreement or in any Schedule are for convenience of reference purposes
only and shall not affect in any way the meaning or interpretation of this Agreement. All words used in this Agreement will be
construed to be of such gender or number as the circumstances require. Any capitalized terms used in any Schedule but not otherwise
defined therein shall have the meaning as defined in this Agreement. All Schedules annexed hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth herein. The word &ldquo;including&rdquo; and words of similar
import when used in this Agreement will mean &ldquo;including, without limitation,&rdquo; unless otherwise specified. The words
&ldquo;hereof,&rdquo; &ldquo;herein&rdquo; and &ldquo;hereunder&rdquo; and words of similar import when used in this Agreement
shall refer to the Agreement as a whole and not to any particular provision in this Agreement. The term &ldquo;or&rdquo; is not
exclusive. The word &ldquo;will&rdquo; shall be construed to have the same meaning and effect as the word &ldquo;shall.&rdquo;
References to days mean calendar days unless otherwise specified.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">[<I>Remainder of Page has Intentionally
Been Left Blank</I>]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">EXECUTED as of the date first above written.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 60%">&nbsp;</TD>
    <TD STYLE="width: 40%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>SHAREHOLDER</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/ Ping Chen</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">PING CHEN</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>[Signature Page
to Support Agreement]</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">EXECUTED as of the date first above written.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><B>LIANLUO SMART LIMITED</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 60%">&nbsp;</TD>
    <TD STYLE="width: 5%">By:</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 35%">/s/ Bin Lin</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Name:&nbsp; </TD>
    <TD>Bin Lin</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Title: </TD>
    <TD>Chief Executive Officer</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><B>NEWEGG INC.</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>By:</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid">/s/ Anthony Chow</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Name: </TD>
    <TD>Anthony Chow</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Title: </TD>
    <TD>Chief Executive Officer</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><I>[Signature Page
to Support Agreement]</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>SCHEDULE 1</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;&nbsp;&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; vertical-align: bottom; width: 52%; padding-top: 0.25pt; padding-right: 0.25pt; padding-left: 0.25pt; text-align: left"><B>Name, Address and Email Address of Shareholder</B></TD>
    <TD STYLE="padding: 0.25pt 0.25pt 1.5pt; vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; vertical-align: bottom; width: 15%; padding-right: 5.2pt; padding-left: 7.05pt; text-align: center"><B>Shares and <BR>
Class of <BR>
LLIT<BR>
Common <BR>
Shares**</B></TD>
    <TD STYLE="padding-bottom: 1.5pt; width: 1%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; vertical-align: bottom; width: 15%; padding-right: 9.35pt; padding-left: 3.35pt; text-align: center"><B>LLIT <BR>
Options and <BR>
underlying <BR>
class of <BR>
common <BR>
shares**</B></TD>
    <TD STYLE="padding-bottom: 1.5pt; width: 1%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; vertical-align: top; width: 15%; padding-right: 4.5pt; padding-left: 4.15pt; text-align: center"><B>LLIT <BR>
Warrants <BR>
and <BR>
underlying <BR>
class of <BR>
common <BR>
shares</B></TD></TR>
<TR>
    <TD STYLE="white-space: nowrap; vertical-align: bottom; padding: 0.25pt; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding: 0.25pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding: 0.25pt 0.25pt 0.5pt; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding: 0.25pt 0.25pt 1pt; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; white-space: nowrap; vertical-align: top; padding: 0.25pt">Ping Chen</TD>
    <TD STYLE="vertical-align: bottom; padding: 0.25pt">&nbsp;</TD>
    <TD STYLE="padding: 0.25pt 0.25pt 0.5pt; vertical-align: top; text-align: center">201,692 Class A Common Shares*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding: 0.25pt 0.25pt 1pt; text-align: center">Options exercisable for 65,733 Class A Common Shares</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">None</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">*</TD><TD STYLE="text-align: left">On August 31, 2020, Hangzhou Lianluo Interactive Information
Technology Co., Ltd. (&ldquo;<U>Hangzhou Lianluo</U>&rdquo;), Lianluo Connection Medical Wearable Device Technology (Beijing)
Co., Ltd. (&ldquo;<U>Lianluo Connection</U>&rdquo;) and Ping Chen entered into a guaranty agreement (the &ldquo;<U>Agreement</U>&rdquo;),
pursuant to which Ping Chen agrees to pledge his 1,613,542 Class A Common Shares of Lianluo Smart Limited to Hangzhou Lianluo
in favor of Lianluo Connection with respect to the indebtedness (the &ldquo;<U>Indebtedness</U>&rdquo;) owed by Lianluo Connection
to Hangzhou Lianluo as of the date of the Agreement. Such Indebtedness consists of loans extended by Hangzhou Lianluo to Lianluo
Connection for its working capital requirements which amount to RMB 6.5 million as of the date of the Agreement and are interest
free until the earlier of (i) December 31, 2020, or (ii) the consummation of the disposition of Lianluo Connection.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">**</TD><TD STYLE="text-align: left">All numbers of shares and warrants presented in the foregoing
table give effect to the 1-for-8 reverse share split effected on October 21, 2020.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B><A NAME="annexd_001"></A>Annex D</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><IMG SRC="image-exd.jpg" ALT=""></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">October 23, 2020</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>STRICTLY CONFIDENTIAL</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Special Committee of the Board of Directors</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Lianluo Smart Limited</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Room 611, 6th Floor, BeiKong Technology
Building, No. 10 Baifuquan Road,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Changping District, Beijing, 102200</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">People&rsquo;s Republic of China</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">To the Special Committee of the Board of
Directors:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">We understand that
Lianluo Smart Limited (the &ldquo;Company&rdquo;) is considering a transaction pursuant to which, subject to the terms and conditions
of the Agreement and Plan of Merger (the &ldquo;Agreement&rdquo;) entered into by and among Lianluo Smart Limited, a business company
incorporated under the laws of the British Virgin Islands (&ldquo;LLIT&rdquo;, the &ldquo;Company&rdquo;), Newegg Inc., a Delaware
corporation (&ldquo;Newegg&rdquo;), and Lightning Delaware Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary
of LLIT, Merger Sub shall be merged with and into Newegg at the Effective Time (the &ldquo;Transaction&rdquo;). We further understand
that, as stated in the Agreement, each Newegg Share that is issued and outstanding immediately prior to the Effective Time shall
be exchanged for and converted into such number of validly issued, fully paid and non-assessable LLIT common shares (the &ldquo;LLIT
Exchange Shares&rdquo;) equal to the LLIT Conversion Ratio (the total number of LLIT Exchange Shares is collectively referred to
as the &ldquo;Merger Consideration&rdquo;), that the LLIT Conversion Ratio shall equal the Newegg Per Share Value divided by the
LLIT Per Share Value, and that the &ldquo;Newegg Per Share Value&rdquo; shall equal $880,000,000 divided by the number of outstanding
Newegg Shares on the date hereof. The &ldquo;LLIT Per Share Value&rdquo; shall equal (i) the volume-weighted average trading price
of LLIT Class A Shares for the consecutive twenty (20) Trading Days immediately prior to and including October 16, 2020, as adjusted
for a 1 to 8 reverse stock split effective on the date hereof (the &ldquo;LLIT 20 Day VWAP&rdquo;) minus (ii) (A) $3,500,000 (the
&ldquo;Escrow Amount&rdquo;) divided by (B) the number of LLIT Class A Shares and LLIT Class B Shares issued and outstanding on
the date hereof, after giving effect to such reverse stock split.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The Special Committee
of the board of directors of the Company (the &ldquo;Special Committee&rdquo;) has requested that The Benchmark Company, LLC (&ldquo;Benchmark&rdquo;)
provide a written opinion (the &ldquo;Opinion&rdquo;) to the Special Committee and the board of directors of the Company (the &ldquo;Board&rdquo;)
as to whether the consideration to be paid by the Company in the Transaction is fair to the Company&rsquo;s shareholders from a
financial point of view.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">In exchange for our
services in rendering this Opinion, the Company has agreed to pay a fee to Benchmark, which is not contingent upon either the conclusion
expressed herein or the consummation of the Transaction. The Company has also agreed to indemnify us against certain potential
liabilities in connection with our services in rendering this Opinion and to reimburse us for certain of our expenses incurred
in connection with our engagement with the Company. We may seek to provide other financial advisory or investment banking services
to the Company and/or its affiliates and other participants in the Transaction in the future for which we may receive compensation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>The Benchmark Company, LLC - Member FINRA,
SIPC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>150 East 58<SUP>th</SUP> Street, 17<SUP>th
</SUP>Floor, New York, NY 10155 - Tel: 212-312-6700</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">This Opinion is addressed
to, and is intended for the use, information and benefit of the Special Committee and the Board (solely in their capacity as such)
and may not be used for any other purpose without our prior written consent. This Opinion is not intended to be, and does not constitute,
a recommendation to the Special Committee or the Board, any security holder or any other party as to how to act or vote with respect
to any matter relating to the Transaction or otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">We have not been requested
to opine as to, and this Opinion does not express an opinion as to or otherwise address, among other things: (1) the underlying
business decision of the Special Committee, the Board, the Company, its security holders or any other party to proceed with or
effect the Transaction, (ii) the terms of any arrangements, understandings, agreements or documents related to, or the form, structure
or any other portion or aspect of, the Transaction or otherwise (other than the consideration to the extent expressly specified
herein), (iii) the fairness of any portion or aspect of the Transaction to the holders of any class of securities, creditors or
other constituencies of the Company, or to any other party, except if and only to the extent expressly set forth in the last sentence
of this Opinion, (iv) the relative merits of the Transaction as compared to any alternative business strategies or transactions
that might be available for the Company, Newegg or any other party, (v) the fairness of any portion or aspect of the Transaction
to any one class or group of the Company&rsquo;s or any other party&rsquo;s security holders or other constituents vis-&agrave;-vis
any other class or group of the Company&rsquo;s or such other party&rsquo;s security holders or other constituents (including,
without limitation, the allocation of any consideration amongst or within such classes or groups of security holders or other constituents),
(vi) the solvency, creditworthiness or fair value of Newegg, the Company or any other participant in the Transaction, or any of
their respective assets, under any applicable laws relating to bankruptcy, insolvency, fraudulent conveyance or similar matters,
or (vii) the fairness, financial or otherwise, of the amount, nature or any other aspect of any compensation to or consideration
payable to or received by any officers, directors or employees of any party to the Transaction, any class of such persons or any
other party, relative to the consideration or otherwise. Furthermore, no opinion, counsel or interpretation is intended in matters
that require legal, regulatory, accounting, insurance, tax or other similar professional advice. It is assumed that such opinions,
counsel or interpretations have been or will be obtained from the appropriate professional sources. Furthermore, we have relied,
with the consent of the Special Committee, on the assessments by the Special Committee, the Company and its advisors, as to all
legal, regulatory, accounting, insurance and tax matters with respect to Newegg, the Company, the Transaction or otherwise. The
issuance of this Opinion was approved by a committee authorized to approve opinions of this nature.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">In arriving at this
Opinion, we reviewed and considered such financial and other matters as we deemed relevant, including, among other things:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9632;</FONT></TD><TD STYLE="text-align: left">the latest draft of the Agreement provided to us on October 22, 2020;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9632;</FONT></TD><TD STYLE="text-align: left">certain information relating to the historical, current and future operations, financial condition
and prospects of Newegg, made available to us by the Company, including financial statements that included the actual income statements
for the year ending 12/31/2019 and the 9 months ending 9/30/2020, a balance sheet as of 9/30/2020, and a financial model with projected
income statements and balance sheets for the calendar years 2020-2022;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9632;</FONT></TD><TD STYLE="text-align: left">discussions with certain members of the management of the Company and certain of its advisors and
representatives regarding the business, operations, financial condition and prospects of the Company, the Transaction and related
matters;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9632;</FONT></TD><TD STYLE="text-align: left">a certificate addressed to us from senior management of the Company which contains, among other
things, representations regarding the accuracy of the information, data and other materials (financial or otherwise) provided to,
or discussed with, us by or on behalf of the Company;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9632;</FONT></TD><TD STYLE="text-align: left">the current and historical market prices for certain of the Company&rsquo;s publicly traded securities,
and the current and historical market prices, trading characteristics and financial performance of the publicly traded securities
of certain other companies that we deemed to be relevant;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9632;</FONT></TD><TD STYLE="text-align: left">the publicly available financial terms of certain transactions that we deemed to be relevant; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9632;</FONT></TD><TD STYLE="text-align: left">such other information, economic and market criteria and data, financial studies, analyses and
investigations and such other factors as Benchmark deemed relevant.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">We have relied upon
and assumed, without independent verification, the accuracy and completeness of all data, material and other information furnished,
or otherwise made available, to us, discussed with or reviewed by us, or publicly available, and do not assume any responsibility
with respect to such data, material and other information. In addition, management of the Company has advised us, and we have assumed,
that the financial projections reviewed by us have been reasonably prepared in good faith on bases reflecting the best currently
available estimates and judgments of such management as to the future financial results and condition of the Company or Newegg
and we express no opinion with respect to such projections or the assumptions on which they are based. We have relied upon and
assumed, without independent verification, that there has been no change in the business, assets, liabilities, financial condition,
results of operations, cash flows or prospects of the Company or Newegg since the respective dates of the most recent financial
statements and other information, financial or otherwise, provided to us that would be material to our analyses or this Opinion,
and that there is no information or any facts that would make any of the information reviewed by us incomplete or misleading. Benchmark
has further relied upon the assurance of the management of the Company that they are unaware of any facts that would make the information
provided to Benchmark incomplete or misleading in any material respect. In connection with its review and arriving at this Opinion,
Benchmark did not assume any responsibility for the independent verification of any of the foregoing information and relied on
the completeness and accuracy as represented by the Company. In addition, we have relied upon and assumed, without independent
verification, that the final form of the Agreement will not differ in any material respect from the latest draft of the Agreement
provided to us as identified above. In addition, Benchmark did not make any independent evaluation or appraisal of the assets or
liabilities of the Company or Newegg nor was Benchmark furnished with any such independent evaluations or appraisals. This Opinion
is necessarily based upon financial, economic, market and other conditions as they existed on, and should be evaluated as of, the
date hereof. Although subsequent developments might affect this Opinion, Benchmark does not have any obligation to update, revise
or reaffirm this Opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Benchmark has assumed
that the Transaction will be consummated on terms substantially similar to those set forth in the Agreement identified above. Furthermore,
the Company represented to Benchmark that the Transaction was negotiated by the parties on an arm&rsquo;s length basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">We
have not been requested to, and did not, (a) initiate or participate in any discussions or negotiations with, or solicit any indications
of interest from, third parties with respect to the Transaction, the securities, assets, businesses or operations of the Company
or Newegg or any other party, or any alternatives to the Transaction, (b) negotiate the terms of the Transaction, or (c) advise
the Special Committee</FONT>, <FONT STYLE="font-size: 10pt">the Board or any other party with respect to alternatives to the Transaction.
</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">In the ordinary course
of our business, Benchmark may have actively traded the equity or debt securities of the Company and may continue to actively trade
such equity or debt securities. In addition, certain individuals who are employees of, or are affiliated with, Benchmark may have
in the past and may currently be stockholders of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Based upon and subject
to the foregoing, and in reliance thereon, it is our opinion that, as of the date hereof, the consideration to be paid by the Company
in the Transaction pursuant to the Agreement is fair to the Company&rsquo;s shareholders from a financial point of view.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Very truly yours,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">THE BENCHMARK COMPANY, LLC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 6%; text-align: left"><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 34%"><FONT STYLE="font-size: 10pt">/s/ John J. Borer III</FONT></TD>
    <TD STYLE="width: 60%; text-align: left"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Name:</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">John J. Borer III</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Title:</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Senior Managing Director &amp; Co-Head of Investment Banking</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B><A NAME="annexe_001"></A>Annex E</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EQUITY TRANSFER AGREEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&#32929;&#20221;&#36716;&#35753;&#21327;&#35758;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">This Equity Transfer
Agreement (this &ldquo;<B><I>Agreement</I></B>&rdquo;) is made and entered into as of October 23, 2020, 2020, in Chaoyang District,
Beijing, by and among (i)&nbsp;<B>Beijing Fenjin Times Technology Development Co., Ltd. </B>(the &ldquo;<B><I>Purchaser</I></B>&rdquo;),
(ii)&nbsp;<B>Lianluo Connection Medical Wearable Device Technology (Beijing) Co., Ltd.</B>, a company formed under laws of the
People&rsquo;s Republic of China with the registered address is Room 611, 612, 618, and 619 on the 6th floor of Beikong Science and Technology
Building, Building 2, No. 10 Baifuquan Road, Changping District, Beijing (the &ldquo;<B><I>Company</I></B>&rdquo;) and (iii)&nbsp;Lianluo
Smart Limited, a business company organized under the laws of British Virgin Islands with the offices at Room 611, 6th Floor, BeiKong
Technology Building, No. 10 Baifuquan Road, Changping District, Beijing 102200, People&rsquo;s Republic of China (the &ldquo;<B><I>Seller</I></B>&rdquo;).
The Purchaser, the Company and the Seller are sometimes referred to herein individually as a &ldquo;<B><I>Party</I></B>&rdquo;
and, collectively, as the &ldquo;<B><I>Parties</I></B>&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#26412;&#12298;&#32929;&#26435;&#36716;&#35753;&#21327;&#35758;&#12299;&#65288;&#20197;&#19979;&#31216;&ldquo;&#26412;&#21327;&#35758;&rdquo;&#65289;&#26159;,&#20110;2020&#24180;10&#26376;23&#26085;&#65292;&#22312;&#21271;&#20140;&#24066;&#26397;&#38451;&#21306;&#65292;&#30001;&#65288;i&#65289;&#21271;&#20140;&#22859;&#36827;&#26102;&#20195;&#31185;&#25216;&#21457;&#23637;&#26377;&#38480;&#20844;&#21496;&#65288;&#20197;&#19979;&#31616;&#31216;&ldquo;&#20080;&#26041;&rdquo;&#65289;&#65292;&#65288;ii&#65289;&#32852;&#32476;&#20114;&#36890;&#21307;&#30103;&#31359;&#25140;&#35774;&#22791;&#25216;&#26415;&#65288;&#21271;&#20140;&#65289;&#26377;&#38480;&#20844;&#21496;&#65292;&#19968;&#23478;&#26681;&#25454;&#20013;&#21326;&#20154;&#27665;&#20849;&#21644;&#22269;&#27861;&#24459;&#25104;&#31435;&#30340;&#20844;&#21496;&#65292;&#27880;&#20876;&#22320;&#22336;&#20026;&#21271;&#25511;&#31185;&#25216;&#22823;&#21414;&#20845;&#27004;611&#12289;612&#12289;618&#21644;619&#23460;&#65292;&#21271;&#20140;&#24066;&#26124;&#24179;&#21306;&#30333;&#28014;&#27849;&#36335;10&#21495;2&#21495;&#65288;&#20197;&#19979;&#31616;&#31216;&ldquo;&#20844;&#21496;&rdquo;&#65289;&#65292;&#21644;&#65288;iii&#65289;&#32852;&#32476;&#26234;&#33021;&#26377;&#38480;&#20844;&#21496;&#65292;&#19968;&#23478;&#26681;&#25454;&#33521;&#23646;&#32500;&#23572;&#20140;&#32676;&#23707;&#27861;&#24459;&#32452;&#24314;&#30340;&#21830;&#19994;&#20844;&#21496;&#65292;&#21150;&#20844;&#23460;&#20301;&#20110;&#21271;&#25511;&#31185;&#25216;&#22823;&#21414;6&#27004;611&#23460;
&#21271;&#20140;&#24066;&#26124;&#24179;&#21306;&#30333;&#28014;&#27849;&#36335;10&#21495;&#65292;&#37038;&#32534;102200&#12290;&#65288;&#20197;&#19979;&#31616;&#31216;&ldquo;&#21334;&#26041;&rdquo;&#65289;&#31614;&#32626;&#30340;&#12290;
&#20080;&#26041;&#65292;&#20844;&#21496;&#21644;&#21334;&#26041;&#26377;&#26102;&#22312;&#26412;&#25991;&#20013;&#20998;&#21035;&#31216;&#20026;&ldquo;&#32532;&#32422;&#26041;&rdquo;&#65292;&#24182;&#32479;&#31216;&#20026;&ldquo;&#32532;&#32422;&#26041;&rdquo;&#12290;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RECITALS:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#21069;&#36848;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B>WHEREAS</B>, the
Company is a limited liability company established on June 20, 2016 with the registered capital of RMB 100.784 million, among which
RMB 13 million has been paid as of the date hereof and RMB 87.784 million shall be paid no later than September 23, 2023 according
to the Company&rsquo;s articles of association, as amended (the &ldquo;<B><I>Company Charter</I></B>&rdquo;);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#37492;&#20110;&#65292;&#26412;&#20844;&#21496;&#20026;&#26377;&#38480;&#36131;&#20219;&#20844;&#21496;&#65292;&#25104;&#31435;&#20110;</FONT>2016<FONT STYLE="font-family: Times New Roman, Times, Serif">&#24180;</FONT>6<FONT STYLE="font-family: Times New Roman, Times, Serif">&#26376;</FONT>20<FONT STYLE="font-family: Times New Roman, Times, Serif">&#26085;&#65292;&#27880;&#20876;&#36164;&#26412;&#20026;&#20154;&#27665;&#24065;</FONT>1<FONT STYLE="font-family: Times New Roman, Times, Serif">.00784&#20159;&#20803;&#65292;&#24050;&#25903;&#20184;&#20154;&#27665;&#24065;13000000&#20803;&#65292;&#26681;&#25454;&#20844;&#21496;&#31456;&#31243;(&#21450;&#20462;&#35746;&#29256;)&#65288;</FONT>&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#20844;&#21496;&#31456;&#31243;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#65292;&#19981;&#36831;&#20110;</FONT>2023<FONT STYLE="font-family: Times New Roman, Times, Serif">&#24180;</FONT>9<FONT STYLE="font-family: Times New Roman, Times, Serif">&#26376;</FONT>23<FONT STYLE="font-family: Times New Roman, Times, Serif">&#26085;&#25903;&#20184;&#20154;&#27665;&#24065;</FONT>87784<FONT STYLE="font-family: Times New Roman, Times, Serif">000&#20803;&#65292;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B>WHEREAS</B>, the
Seller is the sole shareholder of the Company, holding 100% of the equity ownership and all relevant rights and interests of the
Company (the &ldquo;<B><I>Equity Interests</I></B>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#37492;&#20110;&#65292;&#21334;&#26041;&#26159;&#26412;&#20844;&#21496;&#30340;&#21807;&#19968;&#32929;&#19996;&#65292;&#25345;&#26377;&#26412;&#20844;&#21496;</FONT>100<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65285;&#30340;&#32929;&#26435;&#21644;&#25152;&#26377;&#30456;&#20851;&#26435;&#30410;&#65288;</FONT>&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#32929;&#26435;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B>WHEREAS</B>, as
of the date hereof, the Company owes the Seller indebtedness in the aggregate amount of $11,255,188.47(the &ldquo;<B><I>Debt</I></B>&rdquo;).
As an inducement for the Purchaser entering into this Agreement, the Seller agrees to convert the Debt into additional paid-in
capital of the Company immediately prior to the closing of the Transaction;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#37492;&#20110;&#65292;&#25130;&#33267;&#26412;&#25253;&#21578;&#26085;&#26399;&#65292;&#26412;&#20844;&#21496;&#27424;&#21334;&#26041;&#30340;&#20538;&#21153;&#24635;&#39069;&#20026;</FONT>$11,255,188.47
<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65288;</FONT>&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#20538;&#21153;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#12290;
&#20026;&#20419;&#20351;&#20080;&#26041;&#35746;&#31435;&#26412;&#21327;&#35758;&#65292;&#21334;&#26041;&#21516;&#24847;&#22312;&#20132;&#26131;&#23436;&#25104;&#21069;&#23558;&#20538;&#21153;&#36716;&#25442;&#20026;&#20844;&#21496;&#30340;&#36164;&#26412;&#20844;&#31215;&#65307;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B>&nbsp;WHEREAS</B>,
the Seller desires to transfer to the Purchaser, and the Purchaser desires to purchase from the Seller, all of the Equity Interests
from the Seller, subject to the terms and conditions set forth herein (the &ldquo;<B><I>Transaction</I></B>&rdquo;); and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#37492;&#20110;&#65292;&#21334;&#26041;&#24076;&#26395;&#23558;&#25152;&#26377;&#32929;&#26435;&#36716;&#35753;&#32473;&#20080;&#26041;&#65292;&#20080;&#26041;&#24076;&#26395;&#20174;&#21334;&#26041;&#36141;&#20080;&#21334;&#26041;&#30340;&#25152;&#26377;&#32929;&#26435;&#65292;&#20294;&#35201;&#36981;&#23432;&#27492;&#21327;&#35758;&#35268;&#23450;&#30340;&#26465;&#27454;&#21644;&#26465;&#20214;&#65288;</FONT>&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#20132;&#26131;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#65307;
&#21644;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><B>NOW, THEREFORE</B>,
in consideration of the premises set forth above, which are incorporated in this Agreement as if fully set forth below, and the
representations, warranties, covenants and agreements contained in this Agreement, and intending to be legally bound hereby, the
Parties hereto agree as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#29616;&#22312;&#65292;&#32771;&#34385;&#21040;&#20197;&#19978;&#25152;&#36848;&#30340;&#21069;&#25552;&#65292;&#19988;&#36825;&#20123;&#21069;&#25552;&#24050;&#34987;&#24182;&#20837;&#26412;&#21327;&#35758;&#65292;&#24182;&#22312;&#19979;&#38754;&#36827;&#34892;&#20102;&#20805;&#20998;&#38416;&#36848;&#65292;&#24182;&#32771;&#34385;&#20102;&#26412;&#21327;&#35758;&#20013;&#21253;&#21547;&#30340;&#25311;&#22312;&#27492;&#21463;&#27861;&#24459;&#32422;&#26463;&#30340;&#38472;&#36848;&#12289;&#20445;&#35777;&#12289;&#22865;&#32422;&#21644;&#21327;&#35758;&#65292;&#21508;&#26041;&#21516;&#24847;&#22914;&#19979;&#65306;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>ARTICLE
I</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;<U><BR>
THE SHARE PURCHASE</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><U>&#36141;&#20080;&#32929;&#20221;</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">1.1&nbsp;<U>Purchase
and Sale of Equity Interests</U>. At the Closing (as hereinafter defined) and subject to and upon the terms and conditions of this
Agreement, the Seller shall sell, transfer, convey, assign and deliver to the Purchaser, and the Purchaser shall purchase, acquire
and accept from the Seller, all of the Equity Interests, free and clear of all Liens.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#36141;&#20080;&#21644;&#20986;&#21806;&#32929;&#26435;&#12290;
&#22312;&#20132;&#26131;&#32467;&#26463;&#26102;&#65288;&#20197;&#19979;&#23450;&#20041;&#65289;&#65292;&#22312;&#36981;&#23432;&#26412;&#21327;&#35758;&#30340;&#26465;&#27454;&#21644;&#26465;&#20214;&#30340;&#24773;&#20917;&#19979;&#65292;&#21334;&#26041;&#24212;&#21521;&#20080;&#26041;&#20986;&#21806;&#12289;&#36716;&#35753;&#12289;&#36716;&#20184;&#21644;&#20132;&#20184;&#32473;&#20080;&#26041;&#65292;&#20080;&#26041;&#24212;&#20174;&#21334;&#26041;&#36141;&#20080;&#12289;&#33719;&#21462;&#21644;&#25509;&#21463;&#25152;&#26377;&#30340;&#33258;&#30001;&#19988;&#27809;&#26377;&#36136;&#26435;&#38480;&#21046;&#30340;&#32929;&#26435;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">1.2&nbsp;<U>Consideration</U>.
The purchase price of the Equity Interests is RMB 0 (the &ldquo;<B><I>Purchase Price</I></B>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#23545;&#20215;&#12290;
&#32929;&#26435;&#30340;&#36141;&#20080;&#20215;&#20026;&#20154;&#27665;&#24065;</FONT>0<FONT STYLE="font-family: Times New Roman, Times, Serif">&#20803;&#65288;</FONT>&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#36141;&#20080;&#20215;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">1.3&nbsp;<U>Company
Shareholder Consent</U>. Seller, as the sole shareholder of the Company, hereby approves, authorizes and consents to the Company&rsquo;s
execution and delivery of this Agreement and the Ancillary Documents, the performance by the Company of its obligations hereunder
and thereunder and the consummation by the Company of the transactions contemplated hereby and thereby. Seller acknowledges and
agrees that the consent set forth herein is intended and shall constitute such consent of the Seller as may be required (and shall,
if applicable, operate as a written shareholder resolution of the Company) pursuant to the Company Charter, any other agreement
in respect of the Company to which the Seller is a party and all applicable Laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#20844;&#21496;&#32929;&#19996;&#21516;&#24847;&#12290;
&#21334;&#26041;&#65288;&#20316;&#20026;&#20844;&#21496;&#30340;&#21807;&#19968;&#32929;&#19996;&#65289;&#29305;&#27492;&#25209;&#20934;&#65292;&#25480;&#26435;&#24182;&#21516;&#24847;&#20844;&#21496;&#25191;&#34892;&#21644;&#20132;&#20184;&#26412;&#21327;&#35758;&#21644;&#36741;&#21161;&#25991;&#20214;&#65292;&#20844;&#21496;&#23653;&#34892;&#20854;&#22312;&#27492;&#21450;&#20197;&#19979;&#30340;&#20041;&#21153;&#20197;&#21450;&#20844;&#21496;&#23436;&#25104;&#20132;&#26131;&#12290;
&#21334;&#26041;&#25215;&#35748;&#24182;&#21516;&#24847;&#65292;&#27492;&#22788;&#25152;&#35268;&#23450;&#30340;&#21516;&#24847;&#26159;&#25152;&#24895;&#30340;&#65292;&#24182;&#26500;&#25104;&#26681;&#25454;&#20844;&#21496;&#31456;&#31243;&#12289;&#20219;&#20309;&#20854;&#20182;&#28041;&#21450;&#20844;&#21496;&#19988;&#21334;&#26041;&#20026;&#35746;&#32422;&#26041;&#30340;&#21327;&#35758;&#21644;&#25152;&#26377;&#36866;&#29992;&#27861;&#24459;&#21487;&#33021;&#38656;&#35201;&#30340;&#21334;&#26041;&#21516;&#24847;&#65288;&#24182;&#19988;&#65292;&#22914;&#36866;&#29992;&#65292;&#24212;&#20316;&#20026;&#20844;&#21496;&#30340;&#20070;&#38754;&#32929;&#19996;&#20915;&#35758;&#20070;&#65289;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;
</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>ARTICLE
II</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;<U><BR>
CLOSING</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><U>&#20132;&#21106;</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">2.1&nbsp;<U>Closing</U>.
Subject to the satisfaction or waiver of the conditions set forth in&nbsp;<U>Article III</U>, the consummation of the transactions
contemplated by this Agreement (the &ldquo;<B><I>Closing</I></B>&rdquo;) shall take place at the offices of the Seller no later
than one Business Day after all the closing conditions to this Agreement have been satisfied or waived at 10:00 a.m. local time,
or at such other date, time or place as the Purchaser and the Company may agree (the date and time at which the Closing is actually
held being the &ldquo;<B><I>Closing Date</I></B>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#20132;&#21106;&#12290;
&#22312;&#28385;&#36275;&#25110;&#35905;&#20813;&#31532;</FONT>III<FONT STYLE="font-family: Times New Roman, Times, Serif">&#26465;&#35268;&#23450;&#30340;&#26465;&#20214;&#30340;&#21069;&#25552;&#19979;&#65292;&#26412;&#21327;&#35758;&#25311;&#36827;&#34892;&#30340;&#20132;&#26131;&#65288;&#20197;&#19979;&#31216;</FONT>&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#20132;&#21106;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#30340;&#23436;&#25104;&#24212;&#22312;&#25152;&#26377;&#25104;&#20132;&#26465;&#20214;&#28385;&#36275;&#25110;&#35905;&#20813;&#21518;&#30340;&#19968;&#20010;&#33829;&#19994;&#26085;&#20869;&#22312;&#21334;&#26041;&#21150;&#20844;&#23460;&#36827;&#34892;&#65292;&#22312;&#24403;&#22320;&#26102;&#38388;&#19978;&#21320;</FONT>10:00<FONT STYLE="font-family: Times New Roman, Times, Serif">&#25110;&#20080;&#26041;&#19982;&#20844;&#21496;&#21487;&#33021;&#21516;&#24847;&#30340;&#20854;&#20182;&#26085;&#26399;&#12289;&#26102;&#38388;&#25110;&#22320;&#28857;&#65288;&#26412;&#27425;&#23454;&#38469;&#23436;&#25104;&#20132;&#21106;&#30340;&#26085;&#26399;&#21644;&#26102;&#38388;&#20026;</FONT>&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#20132;&#21106;&#26085;&rdquo;&#65289;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>ARTICLE
III</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;<U><BR>
CLOSING CONDITIONS</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><U>&#20132;&#21106;&#26465;&#20214;</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">3.1&nbsp;<U>Conditions
to Each Party&rsquo;s Obligations</U>. The obligations of each Party to consummate the transactions described herein shall be subject
to the satisfaction or written waiver (where permissible) by the Seller and the Purchaser of the following conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#21508;&#26041;&#20041;&#21153;&#30340;&#26465;&#20214;&#12290;
&#32532;&#32422;&#21452;&#26041;&#23436;&#25104;&#26412;&#25991;&#25152;&#36848;&#20132;&#26131;&#30340;&#20041;&#21153;&#24212;&#21463;&#21334;&#26041;&#21644;&#20080;&#26041;&#28385;&#36275;&#20197;&#19979;&#26465;&#20214;&#30340;&#28385;&#24847;&#25110;&#20070;&#38754;&#25918;&#24323;&#65288;&#22312;&#20801;&#35768;&#30340;&#24773;&#20917;&#19979;&#65289;&#65306;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a)&nbsp;<I>Requisite
Regulatory Approvals</I>. All Consents required to be obtained from or made with any Governmental Authority in order to consummate
the transactions contemplated by this Agreement shall have been obtained or made.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&#24517;&#35201;&#30340;&#27861;&#35268;&#25209;&#20934;&#12290;
&#20026;&#23436;&#25104;&#26412;&#21327;&#35758;&#25311;&#36827;&#34892;&#30340;&#20132;&#26131;&#32780;&#38656;&#35201;&#20174;&#20219;&#20309;&#25919;&#24220;&#26426;&#26500;&#33719;&#24471;&#25110;&#19982;&#20043;&#21462;&#24471;&#30340;&#25152;&#26377;&#21516;&#24847;&#20070;&#22343;&#24212;&#24050;&#33719;&#24471;&#25110;&#21462;&#24471;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b)&nbsp;<I>No Law</I>.
No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary
or permanent) or Order that is then in effect and which has the effect of making the transactions contemplated by this Agreement
illegal or which otherwise prevents or prohibits consummation of the transactions contemplated by this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&#26080;&#21046;&#23450;&#27861;&#24459;&#12290;
&#20219;&#20309;&#25919;&#24220;&#26426;&#26500;&#22343;&#19981;&#24471;&#21046;&#23450;&#65292;&#21457;&#24067;&#65292;&#39041;&#24067;&#65292;&#25191;&#34892;&#25110;&#35746;&#31435;&#24403;&#26102;&#29983;&#25928;&#30340;&#65292;&#20855;&#26377;&#20351;&#26412;&#21327;&#35758;&#25152;&#35774;&#24819;&#30340;&#20132;&#26131;&#20026;&#38750;&#27861;&#25110;&#20197;&#20854;&#20182;&#26041;&#24335;&#38459;&#27490;&#25110;&#38450;&#27490;&#25110;
&#31105;&#27490;&#23436;&#25104;&#26412;&#21327;&#35758;&#25311;&#36827;&#34892;&#30340;&#20132;&#26131;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c)&nbsp;<I>No Litigation</I>.
There shall not be any pending Action brought by a third-party non-Affiliate to enjoin or otherwise restrict the consummation of
the Closing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&#26080;&#35785;&#35772;&#12290;
&#31532;&#19977;&#26041;&#38750;&#20851;&#32852;&#20844;&#21496;&#19981;&#24471;&#25552;&#20986;&#20219;&#20309;&#24453;&#20915;&#34892;&#21160;&#26469;&#31105;&#27490;&#25110;&#20197;&#20854;&#20182;&#26041;&#24335;&#38480;&#21046;&#23436;&#25104;&#20132;&#26131;&#30340;&#23436;&#25104;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(d)&nbsp;<I>Fairness
Opinion.</I>&nbsp;On or prior to the date of this Agreement, The Benchmark Company, LLC (the &ldquo;<B><I>Financial Advisor</I></B>&rdquo;)
shall have delivered to the board of the Seller, dated as of the date hereof, to the effect that (subject to various qualifications
and assumptions) the Purchase Price was fair, from a financial point of view, to the shareholders of the Seller.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#20844;&#24179;&#24847;&#35265;&#12290;
&#22312;&#26412;&#21327;&#35758;&#31614;&#35746;&#20043;&#26085;&#25110;&#20043;&#21069;&#65292;</FONT>Benchmark Company<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65292;</FONT>LLC<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65288;</FONT>&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#36130;&#21153;&#39038;&#38382;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#24212;&#20110;&#26412;&#21327;&#35758;&#31614;&#35746;&#20043;&#26085;&#23558;&#20854;&#20132;&#20184;&#32473;&#21334;&#26041;&#33891;&#20107;&#20250;&#65292;&#20197;&#65288;&#26681;&#25454;&#21508;&#31181;&#36164;&#26684;&#21644;&#20551;&#35774;&#32780;&#23450;&#65289;&#20174;&#36130;&#21153;&#35282;&#24230;&#30475;&#65292;&#36141;&#20080;&#20215;&#23545;&#21334;&#26041;&#32929;&#19996;&#32780;&#35328;&#26159;&#20844;&#24179;&#30340;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(e) <I>Shareholders Approval</I>.
Seller shall have obtained its shareholders&rsquo; approval of the transaction contemplated by this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&#32929;&#19996;&#25209;&#20934;&#12290;
&#21334;&#26041;&#24212;&#24050;&#33719;&#24471;&#26412;&#21327;&#35758;&#25311;&#36827;&#34892;&#30340;&#20132;&#26131;&#30340;&#32929;&#19996;&#25209;&#20934;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(f) <I>Newegg Merger</I>.
The merger transactions contemplated by certain Agreement and Plan of Merger, dated as of the date hereof, by and among the Seller,
Lightning Delaware Sub, Inc. and Newegg Inc. (the &ldquo;<B><I>Merger</I></B>&rdquo;), are closed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#26032;&#34507;&#21512;&#24182;&#12290;
&#21334;&#26041;&#12289;</FONT>Lightning Delaware Sub, Inc.<FONT STYLE="font-family: Times New Roman, Times, Serif">&#21644;</FONT>Newegg
Inc.<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65288;&#20197;&#19979;&#31216;</FONT> &ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#21512;&#24182;</FONT>&rdquo;
<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#19982;&#21334;&#26041;&#20043;&#38388;&#36798;&#25104;&#30340;&#25130;&#33267;&#26412;&#21327;&#35758;&#31614;&#32626;&#20043;&#26085;&#30340;&#26576;&#20123;&#21512;&#24182;&#21327;&#35758;&#21644;&#35745;&#21010;&#20013;&#30340;&#21512;&#24182;&#20132;&#26131;&#24050;&#32463;&#23436;&#25104;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(g) <I>Debt Conversion</I>.
Immediately prior to the closing of the Transaction, Seller shall convert the Debt into additional paid-in capital of the Company
and the Company shall have no further obligations in connection with the Debt.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&#20538;&#21153;&#36716;&#25442;&#12290;&#20132;&#26131;&#23436;&#25104;&#21069;&#65292;&#21334;&#26041;&#24212;&#23558;&#20538;&#21153;&#36716;&#25442;&#20026;&#20844;&#21496;&#30340;&#36164;&#26412;&#20844;&#31215;&#65292;&#24182;&#19988;&#27492;&#21518;&#20844;&#21496;&#23558;&#23545;&#20538;&#21153;&#19981;&#25215;&#25285;&#20219;&#20309;&#20854;&#20182;&#20041;&#21153;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">3.4&nbsp;<U>Frustration
of Conditions</U>. Notwithstanding anything contained herein to the contrary, no Party may rely on the failure of any condition
set forth in this&nbsp;<U>Article III</U>&nbsp;to be satisfied if such failure was caused by such the failure of such Party or
its Affiliates to comply with or perform any of its covenants or obligations set forth in this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#26465;&#20214;&#22833;&#25928;&#12290;
&#23613;&#31649;&#26412;&#25991;&#20013;&#26377;&#30456;&#21453;&#30340;&#35268;&#23450;&#65292;&#20294;&#20219;&#20309;&#19968;&#26041;&#22343;&#19981;&#24471;&#20381;&#38752;&#26412;&#26465;&#31532;&#19977;&#27454;&#35268;&#23450;&#30340;&#20219;&#20309;&#26465;&#20214;&#26410;&#33021;&#28385;&#36275;&#65292;&#22914;&#26524;&#35813;&#22833;&#36133;&#26159;&#30001;&#20110;&#35813;&#26041;&#25110;&#20854;&#20851;&#32852;&#20225;&#19994;&#26410;&#33021;&#36981;&#23432;&#25110;&#23653;&#34892;&#20854;&#20219;&#20309;&#20041;&#21153;&#24341;&#36215;&#30340;
&#26412;&#21327;&#35758;&#20013;&#35268;&#23450;&#30340;&#22865;&#32422;&#25110;&#20041;&#21153;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>ARTICLE
IV</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><U>REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><U>&#20080;&#26041;&#38472;&#35834;&#20445;&#35777;</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;The Purchaser hereby
represents and warrants to the Seller and the Company as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&#20080;&#26041;&#22312;&#27492;&#21521;&#21334;&#26041;&#21644;&#20844;&#21496;&#22768;&#26126;&#24182;&#20445;&#35777;&#22914;&#19979;&#65306;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.1
</FONT>&nbsp;&nbsp;<U>Due Organization and Good Standing</U>. The Purchaser is a limited liability company duly incorporated, validly
existing and in good standing under the Laws of People&rsquo;s Republic of China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#36866;&#24403;&#30340;&#32452;&#32455;&#21644;&#33391;&#22909;&#30340;&#20449;&#35465;&#12290;
&#20080;&#26041;&#26159;&#19968;&#23478;&#26681;&#25454;&#20013;&#21326;&#20154;&#27665;&#20849;&#21644;&#22269;&#27861;&#24459;&#27491;&#24335;&#27880;&#20876;&#25104;&#31435;&#65292;&#26377;&#25928;&#23384;&#22312;&#19988;&#20449;&#35465;&#33391;&#22909;&#30340;&#26377;&#38480;&#36131;&#20219;&#20844;&#21496;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">4.2&nbsp;<U>Authorization;
Binding Agreement</U>. The Purchaser has all requisite authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby (a)&nbsp;have been duly and validly authorized and (b) no other corporate proceedings,
other than as set forth elsewhere in the Agreement, are necessary to authorize the execution and delivery of this Agreement or
to consummate the transactions contemplated hereby. This Agreement has been, and shall be when delivered, duly and validly executed
and delivered by the Purchasers, assuming the due authorization, execution and delivery of this Agreement by the other parties
hereto, and constitutes, or when delivered shall constitute, the valid and binding obligation of the Purchaser, enforceable against
the Purchaser in accordance with its terms, except to the extent that enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization and moratorium laws and other laws of general application affecting the enforcement of creditors&rsquo;
rights generally or by any applicable statute of limitation or by any valid defense of set-off or counterclaim, and the fact that
equitable remedies or relief (including the remedy of specific performance) are subject to the discretion of the court from which
such relief may be sought (collectively, the &ldquo;<B><I>Enforceability Exceptions</I></B>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#25480;&#26435;&#65307;&#26377;&#32422;&#26463;&#21147;&#30340;&#21327;&#35758;&#12290;&#20080;&#26041;&#25317;&#26377;&#25191;&#34892;&#21644;&#20132;&#20184;&#26412;&#21327;&#35758;&#65292;&#23653;&#34892;&#20854;&#22312;&#26412;&#21327;&#35758;&#39033;&#19979;&#30340;&#20041;&#21153;&#20197;&#21450;&#23436;&#25104;&#27492;&#22788;&#25311;&#36827;&#34892;&#30340;&#20132;&#26131;&#30340;&#25152;&#26377;&#24517;&#35201;&#26435;&#38480;&#12290;&#26412;&#21327;&#35758;&#30340;&#25191;&#34892;&#21644;&#20132;&#20184;&#20197;&#21450;&#25152;&#32771;&#34385;&#30340;&#20132;&#26131;&#30340;&#23436;&#25104;&#65288;</FONT>a<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#24050;&#24471;&#21040;&#36866;&#24403;&#21644;&#26377;&#25928;&#30340;&#25480;&#26435;&#65292;&#24182;&#19988;&#65288;</FONT>b<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#38500;&#21327;&#35758;&#20854;&#20182;&#37096;&#20998;&#25152;&#35268;&#23450;&#30340;&#20197;&#22806;&#65292;&#26080;&#38656;&#20854;&#20182;&#20844;&#21496;&#31243;&#24207;&#26469;&#25480;&#26435;&#25191;&#34892;&#21644;&#25191;&#34892;&#12290;&#20132;&#20184;&#26412;&#21327;&#35758;&#25110;&#23436;&#25104;&#27492;&#22788;&#25311;&#36827;&#34892;&#30340;&#20132;&#26131;&#12290;&#20551;&#35774;&#20854;&#20182;&#26041;&#23545;&#27492;&#21327;&#35758;&#36827;&#34892;&#20102;&#36866;&#24403;&#30340;&#25480;&#26435;&#65292;&#25191;&#34892;&#21644;&#20132;&#20184;&#65292;&#21017;&#20080;&#26041;&#24050;&#32463;&#65292;&#24182;&#23558;&#22312;&#20132;&#20184;&#65292;&#22949;&#21892;&#26377;&#25928;&#22320;&#25191;&#34892;&#21644;&#20132;&#20184;&#26412;&#21327;&#35758;&#30340;&#21516;&#26102;&#65292;&#26500;&#25104;&#25110;&#23558;&#26500;&#25104;&#26377;&#25928;&#30340;&#20080;&#26041;&#20855;&#26377;&#32422;&#26463;&#21147;&#30340;&#20041;&#21153;&#65292;&#21487;&#26681;&#25454;&#20854;&#26465;&#27454;&#23545;&#20080;&#26041;&#25191;&#34892;&#65292;&#20294;&#20854;&#21487;&#25191;&#34892;&#24615;&#21487;&#33021;&#21463;&#21040;&#36866;&#29992;&#30340;&#30772;&#20135;&#65292;&#30772;&#20135;&#65292;&#37325;&#32452;&#21644;&#26242;&#20572;&#27861;&#24459;&#20197;&#21450;&#20854;&#20182;&#19968;&#33324;&#24433;&#21709;&#20538;&#26435;&#20154;&#26435;&#21033;&#23454;&#26045;&#30340;&#19968;&#33324;&#36866;&#29992;&#27861;&#24459;&#30340;&#38480;&#21046;&#25110;&#36890;&#36807;&#20219;&#20309;&#36866;&#29992;&#30340;&#26102;&#25928;&#27861;&#35268;&#25110;&#36890;&#36807;&#23545;&#25269;&#38144;&#25110;&#21453;&#35831;&#27714;&#30340;&#20219;&#20309;&#26377;&#25928;&#25239;&#36777;&#65292;&#20197;&#21450;&#20844;&#24179;&#30340;&#34917;&#25937;&#25110;&#25937;&#27982;&#65288;&#21253;&#25324;&#29305;&#23450;&#23653;&#34892;&#30340;&#34917;&#25937;&#65289;&#22343;&#24212;&#30001;&#27861;&#38498;&#37196;&#24773;&#20915;&#23450;&#30340;&#20107;&#23454;&#65288;&#32479;&#31216;&#20026;</FONT>&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#21487;&#25191;&#34892;&#24615;&#20363;&#22806;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">4.3&nbsp;<U>Governmental
Approvals</U>. No Consent of or with any Governmental Authority, on the part of the Purchaser is required to be obtained or made
in connection with the execution, delivery or performance of this Agreement or the consummation of the transactions contemplated
hereby, other than (a) such filings as may be required in any jurisdiction in which the Purchaser is qualified or authorized to
do business as a foreign corporation in order to maintain such qualification or authorization, and (b) such filings as contemplated
by this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#25919;&#24220;&#25209;&#20934;&#12290;
&#38500;&#65288;</FONT>a<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#27492;&#31867;&#22791;&#26696;&#22806;&#65292;&#26080;&#38656;&#25191;&#34892;&#26412;&#21327;&#35758;&#65292;&#25191;&#34892;&#65292;&#20132;&#20184;&#25110;&#23653;&#34892;&#26412;&#21327;&#35758;&#25110;&#36827;&#34892;&#25311;&#36827;&#34892;&#30340;&#20132;&#26131;&#32780;&#33719;&#24471;&#25110;&#24449;&#24471;&#20080;&#26041;&#30340;&#21516;&#24847;&#25110;&#33719;&#24471;&#20219;&#20309;&#25919;&#24220;&#26426;&#26500;&#30340;&#21516;&#24847;&#12290;
&#20080;&#26041;&#20855;&#26377;&#36164;&#26684;&#25110;&#34987;&#25480;&#26435;&#20197;&#22806;&#22269;&#27861;&#20154;&#30340;&#36523;&#20998;&#20174;&#20107;&#32463;&#33829;&#19994;&#21153;&#30340;&#20219;&#20309;&#21496;&#27861;&#31649;&#36758;&#21306;&#25152;&#24517;&#38656;&#30340;&#65292;&#20197;&#32500;&#25345;&#35813;&#36164;&#26684;&#25110;&#25480;&#26435;&#65292;&#20197;&#21450;&#65288;</FONT>b<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#26412;&#21327;&#35758;&#25152;&#35774;&#24819;&#30340;&#27492;&#31867;&#22791;&#26696;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">4.4&nbsp;<U>Non-Contravention</U>.
The execution and delivery by the Purchaser of this Agreement and the consummation of the transactions contemplated hereby, and
compliance with any of the provisions hereof, will not (a) conflict with or violate any provision of the articles of association
of the Purchaser, (b)&nbsp;conflict with or violate any Law, Order or Consent applicable to the Purchaser or any of its properties
or assets, or (c) (i) violate, conflict with or result in a breach of, (ii) constitute a default (or an event which, with notice
or lapse of time or both, would constitute a default) under, (iii) result in the termination, withdrawal, suspension, cancellation
or modification of, (iv) accelerate the performance required by the Purchaser under, (v) result in a right of termination or acceleration
under, (vi) give rise to any obligation to make payments or provide compensation under, (vii) result in the creation of any Lien
upon any of the properties or assets of the Purchaser under, (viii) give rise to any obligation to obtain any third party consent
or provide any notice to any Person or (ix) give any Person the right to declare a default, exercise any remedy, claim a rebate,
chargeback, penalty or change in delivery schedule, accelerate the maturity or performance, cancel, terminate or modify any right,
benefit, obligation or other term under, any of the terms, conditions or provisions of, any material contract of the Purchaser.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#19981;&#36829;&#21453;&#12290;&#20080;&#26041;&#25191;&#34892;&#21644;&#20132;&#20184;&#26412;&#21327;&#35758;&#20197;&#21450;&#23436;&#25104;&#25454;&#27492;&#25311;&#36827;&#34892;&#30340;&#20132;&#26131;&#65292;&#24182;&#36981;&#23432;&#26412;&#21327;&#35758;&#30340;&#20219;&#20309;&#35268;&#23450;&#65292;&#23558;&#19981;&#20250;&#65288;</FONT>a<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#19982;&#20080;&#26041;&#32452;&#32455;&#31456;&#31243;&#30340;&#20219;&#20309;&#35268;&#23450;&#30456;&#25269;&#35302;&#25110;&#36829;&#21453;&#65292;&#65288;</FONT>b
<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#19982;&#36866;&#29992;&#20110;&#36141;&#20080;&#32773;&#25110;&#20854;&#20219;&#20309;&#36130;&#20135;&#25110;&#36164;&#20135;&#30340;&#20219;&#20309;&#27861;&#24459;&#65292;&#21629;&#20196;&#25110;&#21516;&#24847;&#20070;&#21457;&#29983;&#20914;&#31361;&#25110;&#36829;&#21453;&#65292;&#25110;&#65288;</FONT>c<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#65288;</FONT>i<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#36829;&#21453;&#65292;&#19982;&#20043;&#21457;&#29983;&#20914;&#31361;&#25110;&#23548;&#33268;&#36829;&#21453;&#65292;&#65288;</FONT>ii<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#26500;&#25104;&#36829;&#32422;&#65288;&#25110;&#65288;</FONT>iii<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#23548;&#33268;&#65288;</FONT>iii<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#32456;&#27490;&#12289;&#25764;&#22238;&#12289;&#20013;&#27490;&#12289;&#21462;&#28040;&#25110;&#20462;&#25913;&#65292;&#65288;</FONT>iv<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#21152;&#36895;&#20080;&#26041;&#26681;&#25454;&#65288;</FONT>v<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;
&#65289;&#23548;&#33268;&#65288;</FONT>vi<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#26681;&#25454;&#65288;</FONT>vi<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#20135;&#29983;&#20184;&#27454;&#25110;&#25552;&#20379;&#36180;&#20607;&#30340;&#20041;&#21153;&#65292;&#65288;</FONT>vii<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#26681;&#25454;&#65288;&#65288;</FONT>vi<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#20135;&#29983;&#23545;&#20080;&#26041;&#30340;&#20219;&#20309;&#36130;&#20135;&#25110;&#36164;&#20135;&#30340;&#30041;&#32622;&#26435;</FONT>viii<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#24341;&#36215;&#20219;&#20309;&#20041;&#21153;&#33719;&#24471;&#20219;&#20309;&#31532;&#19977;&#26041;&#21516;&#24847;&#25110;&#21521;&#20219;&#20309;&#20154;&#21457;&#20986;&#20219;&#20309;&#36890;&#30693;&#30340;&#26435;&#21033;&#65307;&#25110;&#65288;</FONT>ix<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#36171;&#20104;&#20219;&#20309;&#20154;&#22768;&#26126;&#36829;&#32422;&#65292;&#34892;&#20351;&#20219;&#20309;&#34917;&#25937;&#25514;&#26045;&#65292;&#35201;&#27714;&#36864;&#27454;&#65292;&#36864;&#27454;&#65292;&#32602;&#27454;&#25110;&#26356;&#25913;&#20132;&#36135;&#26102;&#38388;&#34920;&#65292;&#21152;&#36895;&#21040;&#26399;&#25110;&#23653;&#34892;&#30340;&#26435;&#21033;&#65292;&#21462;&#28040;&#65292;&#32456;&#27490;&#25110;&#20462;&#25913;&#20080;&#26041;&#20219;&#20309;&#37325;&#35201;&#21512;&#21516;&#30340;&#20219;&#20309;&#26465;&#27454;&#65292;&#26465;&#20214;&#25110;&#35268;&#23450;&#19979;&#30340;&#20219;&#20309;&#26435;&#21033;&#65292;&#21033;&#30410;&#65292;&#20041;&#21153;&#25110;&#20854;&#20182;&#26465;&#27454;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">4.5 <U>Access to Information</U>.
The Purchaser has conducted its own independent investigation, review and analysis of the business, results of operations, prospects,
condition (financial or otherwise) or assets of the Company, and acknowledges that it has been provided adequate access to the
personnel, properties, assets, premises, litigations, books and records, and other documents and data of the Company for such purpose.
The Purchaser acknowledges and agrees that: (a) in making its decision to enter into this Agreement and to consummate the transactions
contemplated hereby, it has relied solely upon its own investigation and the express representations and warranties of the Company
and the Seller set forth in Article V (including any exhibits and schedules attached hereto and provided by the Company and the
Seller).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#33719;&#21462;&#20449;&#24687;&#12290;
&#20080;&#26041;&#24050;&#23545;&#20844;&#21496;&#30340;&#19994;&#21153;&#65292;&#32463;&#33829;&#25104;&#26524;&#65292;&#21069;&#26223;&#65292;&#29366;&#20917;&#65288;&#36130;&#21153;&#25110;&#20854;&#20182;&#26041;&#38754;&#65289;&#25110;&#36164;&#20135;&#36827;&#34892;&#20102;&#29420;&#31435;&#30340;&#35843;&#26597;&#65292;&#23457;&#26597;&#21644;&#20998;&#26512;&#65292;&#24182;&#30830;&#35748;&#24050;&#20026;&#21592;&#24037;&#65292;&#36130;&#20135;&#65292;&#36164;&#20135;&#25552;&#20379;&#20102;&#20805;&#20998;&#30340;&#35775;&#38382;&#26435;&#38480;
&#65292;&#21150;&#20844;&#29992;&#25151;&#65292;&#35785;&#35772;&#65292;&#36134;&#31807;&#21644;&#35760;&#24405;&#20197;&#21450;&#20854;&#20182;&#20844;&#21496;&#30340;&#25991;&#20214;&#21644;&#25968;&#25454;&#12290;
&#20080;&#26041;&#25215;&#35748;&#24182;&#21516;&#24847;&#65306;&#65288;</FONT>a<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#22312;&#20915;&#23450;&#35746;&#31435;&#26412;&#21327;&#35758;&#24182;&#23436;&#25104;&#25454;&#27492;&#25311;&#36827;&#34892;&#30340;&#20132;&#26131;&#26102;&#65292;&#20080;&#26041;&#20165;&#20381;&#38752;&#33258;&#24049;&#30340;&#35843;&#26597;&#20197;&#21450;&#26412;&#20844;&#21496;&#21644;&#21334;&#26041;&#22312;&#26412;&#21327;&#35758;&#20013;&#38416;&#26126;&#30340;&#26126;&#31034;&#21644;&#20445;&#35777;&#12290;
&#31532;&#20116;&#26465;&#65288;&#21253;&#25324;&#26412;&#20844;&#21496;&#21644;&#21334;&#26041;&#25552;&#20379;&#30340;&#20219;&#20309;&#38468;&#20214;&#21644;&#38468;&#34920;&#65289;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">4.6 <U>Unpaid Registered
Capital</U>. The Purchaser acknowledges and undertakes that after the Closing, it shall pay the unpaid registered capital of the
Company equal to RMB 87.784 million in accordance with the Company Charter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#26410;&#32564;&#27880;&#20876;&#36164;&#26412;&#12290;
&#20080;&#26041;&#30830;&#35748;&#24182;&#25215;&#35834;&#65292;&#22312;&#23436;&#25104;&#20132;&#26131;&#21518;&#65292;&#20080;&#26041;&#23558;&#26681;&#25454;&#20844;&#21496;&#31456;&#31243;&#25903;&#20184;&#26410;&#25903;&#20184;&#30340;&#27880;&#20876;&#36164;&#26412;&#20154;&#27665;&#24065;</FONT>87784<FONT STYLE="font-family: Times New Roman, Times, Serif">000&#20803;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">4.7 <U>No Further Liabilities</U>.
The Purchaser acknowledges and agrees that upon consummation of the Transaction, the Seller shall not have any obligations or liabilities,
contingent or otherwise, relating to the Company and shall have no affiliation with the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#20080;&#26041;&#25215;&#35748;&#24182;&#21516;&#24847;&#65292;&#20132;&#26131;&#23436;&#25104;&#21518;&#65292;&#21334;&#26041;&#23558;&#19981;&#25215;&#25285;&#19982;&#20844;&#21496;&#26377;&#20851;&#30340;&#20219;&#20309;&#65288;&#21487;&#33021;&#21457;&#29983;&#30340;&#25110;&#20854;&#20182;&#30340;&#65289;&#20041;&#21153;&#25110;&#36127;&#20538;&#65292;&#24182;&#19988;&#19982;&#20844;&#21496;&#27809;&#26377;&#20219;&#20309;&#20174;&#23646;&#20851;&#31995;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;<FONT STYLE="text-transform: uppercase"><B>ARTICLE
V</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><U>REPRESENTATIONS
AND WARRANTIES OF THE company AND SELLER</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><U>&#20844;&#21496;&#21450;&#21334;&#26041;&#25215;&#35834;&#20445;&#35777;</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">The Company hereby represents
and warrants to the Purchaser as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&#26412;&#20844;&#21496;&#29305;&#27492;&#22768;&#26126;&#24182;&#21521;&#20080;&#26041;&#20445;&#35777;&#65306;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">5.1&nbsp;<U>Due Organization
and Good Standing</U>. The Company is a limited liability company duly incorporated, validly existing and in good standing under
the Laws of People&rsquo;s Republic of China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#36866;&#24403;&#30340;&#32452;&#32455;&#21644;&#33391;&#22909;&#30340;&#20449;&#35465;&#12290;
&#26412;&#20844;&#21496;&#26159;&#26681;&#25454;&#20013;&#21326;&#20154;&#27665;&#20849;&#21644;&#22269;&#27861;&#24459;&#27491;&#24335;&#27880;&#20876;&#25104;&#31435;&#65292;&#26377;&#25928;&#23384;&#22312;&#19988;&#20449;&#35465;&#33391;&#22909;&#30340;&#26377;&#38480;&#36131;&#20219;&#20844;&#21496;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">5.2&nbsp;<U>Authorization;
Binding Agreement</U>. The Company has all requisite corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby (a)&nbsp;have been duly and validly authorized and (b) no other corporate
proceedings, other than as set forth elsewhere in the Agreement, are necessary to authorize the execution and delivery of this
Agreement or to consummate the transactions contemplated hereby. This Agreement has been, and shall be when delivered, duly and
validly executed and delivered by the Company, assuming the due authorization, execution and delivery of this Agreement by the
other parties hereto, and constitutes, or when delivered shall constitute, the valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except to the extent that enforceability thereof may be limited by the Enforceability
Exceptions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#25480;&#26435;&#65307;&#26377;&#32422;&#26463;&#21147;&#30340;&#21327;&#35758;&#12290;&#20844;&#21496;&#25317;&#26377;&#25191;&#34892;&#21644;&#20132;&#20184;&#26412;&#21327;&#35758;&#65292;&#23653;&#34892;&#20854;&#22312;&#26412;&#21327;&#35758;&#39033;&#19979;&#30340;&#20041;&#21153;&#20197;&#21450;&#23436;&#25104;&#27492;&#22788;&#25311;&#36827;&#34892;&#30340;&#20132;&#26131;&#30340;&#25152;&#26377;&#24517;&#35201;&#30340;&#20844;&#21496;&#26435;&#21147;&#21644;&#26435;&#21147;&#12290;&#26412;&#21327;&#35758;&#30340;&#25191;&#34892;&#21644;&#20132;&#20184;&#20197;&#21450;&#25152;&#32771;&#34385;&#30340;&#20132;&#26131;&#30340;&#23436;&#25104;&#65288;</FONT>a<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#24050;&#24471;&#21040;&#36866;&#24403;&#21644;&#26377;&#25928;&#30340;&#25480;&#26435;&#65292;&#24182;&#19988;&#65288;</FONT>b<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#38500;&#21327;&#35758;&#20854;&#20182;&#37096;&#20998;&#25152;&#35268;&#23450;&#30340;&#20197;&#22806;&#65292;&#26080;&#38656;&#20854;&#20182;&#20844;&#21496;&#31243;&#24207;&#26469;&#25480;&#26435;&#25191;&#34892;&#21644;&#25191;&#34892;&#12290;&#20132;&#20184;&#26412;&#21327;&#35758;&#25110;&#23436;&#25104;&#27492;&#22788;&#25311;&#36827;&#34892;&#30340;&#20132;&#26131;&#12290;&#20551;&#35774;&#20854;&#20182;&#21508;&#26041;&#23545;&#27492;&#21327;&#35758;&#36827;&#34892;&#20102;&#36866;&#24403;&#30340;&#25480;&#26435;&#65292;&#25191;&#34892;&#21644;&#20132;&#20184;&#65292;&#21017;&#26412;&#21327;&#35758;&#24050;&#30001;&#20844;&#21496;&#22949;&#21892;&#65292;&#26377;&#25928;&#22320;&#25191;&#34892;&#21644;&#20132;&#20184;&#65292;&#24182;&#24050;&#26500;&#25104;&#65292;&#25110;&#22312;&#20132;&#20184;&#26102;&#26500;&#25104;&#26377;&#25928;&#30340;&#21644;&#26412;&#20844;&#21496;&#20855;&#26377;&#32422;&#26463;&#21147;&#30340;&#20041;&#21153;&#65292;&#21487;&#26681;&#25454;&#20854;&#26465;&#27454;&#23545;&#20844;&#21496;&#24378;&#21046;&#25191;&#34892;&#65292;&#20294;&#20854;&#21487;&#25191;&#34892;&#24615;&#21487;&#33021;&#20250;&#21463;&#21040;</FONT>&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#21487;&#25191;&#34892;&#24615;&#20363;&#22806;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#30340;&#38480;&#21046;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">5.3&nbsp;<U>Governmental
Approvals</U>. No Consent of or with any Governmental Authority, on the part of the Company is required to be obtained or made
in connection with the execution, delivery or performance of this Agreement or the consummation of the transactions contemplated
hereby and thereby, other than (a) such filings as may be required in any jurisdiction in which the Company is qualified or authorized
to do business as a foreign corporation in order to maintain such qualification or authorization, or (b) such filings as contemplated
by this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#25919;&#24220;&#25209;&#20934;&#12290;
&#38500;&#65288;</FONT>a<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#20197;&#22806;&#65292;&#19981;&#38656;&#35201;&#26412;&#20844;&#21496;&#23601;&#25191;&#34892;&#65292;&#20132;&#20184;&#25110;&#23653;&#34892;&#26412;&#21327;&#35758;&#25110;&#23436;&#25104;&#27492;&#22788;&#25311;&#36827;&#34892;&#30340;&#20132;&#26131;&#32780;&#33719;&#24471;&#25110;&#21462;&#24471;&#20219;&#20309;&#25919;&#24220;&#26426;&#26500;&#30340;&#21516;&#24847;&#25110;&#21516;&#24847;&#12290;
&#20844;&#21496;&#26377;&#36164;&#26684;&#25110;&#34987;&#25480;&#26435;&#20197;&#22806;&#22269;&#20844;&#21496;&#30340;&#21517;&#20041;&#22312;&#20219;&#20309;&#21496;&#27861;&#31649;&#36758;&#21306;&#32463;&#33829;&#19994;&#21153;&#20197;&#32500;&#25345;&#36825;&#31181;&#36164;&#26684;&#25110;&#25480;&#26435;&#25152;&#24517;&#38656;&#30340;&#25991;&#20214;&#65292;&#25110;&#65288;</FONT>b<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#26412;&#21327;&#35758;&#25152;&#35774;&#24819;&#30340;&#25991;&#20214;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">5.4&nbsp;<U>Non-Contravention</U>.
The execution and delivery by the Company of this Agreement and the consummation of the transactions contemplated hereby, and compliance
with any of the provisions hereof, will not (a) conflict with or violate any provision of the Company Charter, (b)&nbsp;conflict
with or violate any Law, Order or Consent applicable to the Company or any of its properties or assets, or (c) (i) violate, conflict
with or result in a breach of, (ii) constitute a default (or an event which, with notice or lapse of time or both, would constitute
a default) under, (iii) result in the termination, withdrawal, suspension, cancellation or modification of, (iv) accelerate the
performance required by the Company under, (v) result in a right of termination or acceleration under, (vi) give rise to any obligation
to make payments or provide compensation under, (vii) result in the creation of any Lien upon any of the properties or assets of
the Company under, (viii) give rise to any obligation to obtain any third party consent or provide any notice to any Person or
(ix) give any Person the right to declare a default, exercise any remedy, claim a rebate, chargeback, penalty or change in delivery
schedule, accelerate the maturity or performance, cancel, terminate or modify any right, benefit, obligation or other term under,
any of the terms, conditions or provisions of, any material contract of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#19981;&#36829;&#21453;&#12290;&#20844;&#21496;&#23545;&#26412;&#21327;&#35758;&#30340;&#25191;&#34892;&#21644;&#20132;&#20184;&#20197;&#21450;&#25454;&#27492;&#25311;&#36827;&#34892;&#30340;&#20132;&#26131;&#30340;&#23436;&#25104;&#20197;&#21450;&#23545;&#26412;&#21327;&#35758;&#20219;&#20309;&#35268;&#23450;&#30340;&#36981;&#23432;&#65292;&#19981;&#20250;&#65288;</FONT>a<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#19982;&#12298;&#20844;&#21496;&#31456;&#31243;&#12299;&#30340;&#20219;&#20309;&#35268;&#23450;&#30456;&#25269;&#35302;&#25110;&#36829;&#21453;&#65292;&#65288;</FONT>b<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#19982;&#20844;&#21496;&#31456;&#31243;&#30340;&#20219;&#20309;&#35268;&#23450;&#30456;&#25269;&#35302;&#25110;&#36829;&#21453;&#36866;&#29992;&#20110;&#20844;&#21496;&#25110;&#20854;&#20219;&#20309;&#36130;&#20135;&#25110;&#36164;&#20135;&#30340;&#20219;&#20309;&#27861;&#24459;&#65292;&#21629;&#20196;&#25110;&#21516;&#24847;&#20070;&#65292;&#25110;&#65288;</FONT>c<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#65288;</FONT>i<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#36829;&#21453;&#65292;&#19982;&#20043;&#20914;&#31361;&#25110;&#23548;&#33268;&#36829;&#21453;&#65292;&#65288;</FONT>ii<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#26500;&#25104;&#36829;&#32422;&#65288;&#25110;&#19982;&#36890;&#30693;&#25110;&#26102;&#38388;&#30340;&#27969;&#36893;&#25110;&#20004;&#32773;&#20860;&#32780;&#26377;&#20043;&#65292;&#23558;&#26500;&#25104;&#20197;&#19979;&#36829;&#32422;&#65289;&#65292;&#65288;</FONT>iii<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#23548;&#33268;&#20197;&#19979;&#21508;&#39033;&#30340;&#32456;&#27490;&#65292;&#25764;&#22238;&#65292;&#20013;&#27490;&#65292;&#21462;&#28040;&#25110;&#20462;&#25913;&#65292;&#65288;</FONT>iv<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#21152;&#36895;&#20844;&#21496;&#22312;&#20197;&#19979;&#24773;&#20917;&#19979;&#25152;&#38656;&#30340;&#32489;&#25928;&#65306;&#65288;</FONT>v<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#23548;&#33268;&#65288;</FONT>vi<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#20135;&#29983;&#20219;&#20309;&#20184;&#27454;&#25110;&#25552;&#20379;&#34917;&#20607;&#30340;&#20041;&#21153;&#65292;&#65288;</FONT>vii<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#23548;&#33268;&#26681;&#25454;&#65288;</FONT>viii<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#20135;&#29983;&#23545;&#20844;&#21496;&#30340;&#20219;&#20309;&#36130;&#20135;&#25110;&#36164;&#20135;&#30340;&#30041;&#32622;&#26435;&#33719;&#24471;&#20219;&#20309;&#31532;&#19977;&#26041;&#30340;&#20219;&#20309;&#20041;&#21153;</FONT>c<FONT STYLE="font-family: Times New Roman, Times, Serif">&#21521;&#20219;&#20309;&#20154;&#21457;&#36865;&#25110;&#21457;&#20986;&#20219;&#20309;&#36890;&#30693;&#65292;&#25110;&#65288;</FONT>ix<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#36171;&#20104;&#20219;&#20309;&#20154;&#22768;&#26126;&#36829;&#32422;&#65292;&#34892;&#20351;&#20219;&#20309;&#34917;&#25937;&#65292;&#35201;&#27714;&#36864;&#27454;&#65292;&#36864;&#27454;&#65292;&#32602;&#37329;&#25110;&#26356;&#25913;&#20132;&#36135;&#26102;&#38388;&#34920;&#65292;&#21152;&#36895;&#21040;&#26399;&#25110;&#23653;&#34892;&#65292;&#21462;&#28040;&#65292;&#32456;&#27490;&#25110;&#20462;&#25913;&#30340;&#26435;&#21033;&#20844;&#21496;&#20219;&#20309;&#37325;&#35201;&#21512;&#21516;&#30340;&#20219;&#20309;&#26465;&#27454;&#65292;&#26465;&#20214;&#25110;&#35268;&#23450;&#19979;&#30340;&#20219;&#20309;&#26435;&#21033;&#65292;&#21033;&#30410;&#65292;&#20041;&#21153;&#25110;&#20854;&#20182;&#26465;&#27454;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">The Seller hereby represents
and warrants to the Purchaser as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&#21334;&#26041;&#29305;&#27492;&#22768;&#26126;&#24182;&#21521;&#20080;&#26041;&#20445;&#35777;&#65306;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">5.5&nbsp;<U>Due Organization
and Good Standing</U>. The Seller is a business company duly incorporated, validly existing and in good standing under the Laws
of the British Virgin Islands.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#36866;&#24403;&#30340;&#32452;&#32455;&#21644;&#33391;&#22909;&#30340;&#20449;&#35465;&#12290;
&#21334;&#26041;&#26159;&#19968;&#23478;&#26681;&#25454;&#33521;&#23646;&#32500;&#23572;&#20140;&#32676;&#23707;&#27861;&#24459;&#27491;&#24335;&#27880;&#20876;&#25104;&#31435;&#65292;&#26377;&#25928;&#23384;&#22312;&#19988;&#20449;&#35465;&#33391;&#22909;&#30340;&#21830;&#19994;&#20844;&#21496;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">5.6&nbsp;<U>Good Title</U>.
The Seller is the record owner of the Equity Interests free and clear of all Liens and upon the execution of the Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#33391;&#22909;&#25152;&#26377;&#26435;&#12290;
&#21334;&#26041;&#26159;&#32929;&#26435;&#30340;&#35760;&#24405;&#25317;&#26377;&#32773;&#65292;&#22312;&#21327;&#35758;&#31614;&#32626;&#26102;&#20854;&#32929;&#26435;&#19978;&#26080;&#20219;&#20309;&#36136;&#26435;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>ARTICLE
VI</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;<U><BR>
TERMINATION AND EXPENSES</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#32456;&#27490;&#21644;&#36153;&#29992;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">6.1&nbsp;<U>Termination</U>.
This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Closing as
follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#32456;&#27490;&#12290;
&#22312;&#23436;&#25104;&#20132;&#26131;&#20043;&#21069;&#30340;&#20219;&#20309;&#26102;&#20505;&#65292;&#26412;&#21327;&#35758;&#21487;&#33021;&#20250;&#32456;&#27490;&#65292;&#29305;&#27492;&#36827;&#34892;&#30340;&#20132;&#26131;&#21487;&#33021;&#20250;&#34987;&#25918;&#24323;&#65292;&#22914;&#19979;&#25152;&#31034;&#65306;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(a) by mutual written
consent of the Purchasers and the Seller;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&#32463;&#20080;&#21334;&#21452;&#26041;&#30340;&#20070;&#38754;&#21516;&#24847;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(b) by written notice
by either the Purchaser or the Seller if a Governmental Authority of competent jurisdiction shall have issued an Order or taken
any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement, and
such Order or other action has become final and non-appealable;&nbsp;<U>provided</U>,&nbsp;<U>however</U>, that the right to terminate
this Agreement pursuant to this&nbsp;<U>Section 6.1(b)</U>&nbsp;shall not be available to a Party if the failure by such Party
or its Affiliates to comply with any provision of this Agreement has been a substantial cause of, or substantially resulted in,
such action by such Governmental Authority;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#22914;&#26524;&#20855;&#26377;&#31649;&#36758;&#26435;&#30340;&#25919;&#24220;&#26426;&#26500;&#24050;&#21457;&#24067;&#35746;&#21333;&#25110;&#37319;&#21462;&#20102;&#20854;&#20182;&#27704;&#20037;&#24615;&#38480;&#21046;&#65292;&#31105;&#27490;&#25110;&#20197;&#20854;&#20182;&#26041;&#24335;&#31105;&#27490;&#26412;&#21327;&#35758;&#36827;&#34892;&#30340;&#20132;&#26131;&#30340;&#34892;&#21160;&#65292;&#19988;&#20080;&#26041;&#25110;&#21334;&#26041;&#20197;&#20070;&#38754;&#36890;&#30693;&#30340;&#24418;&#24335;&#65292;&#21017;&#35813;&#21629;&#20196;&#25110;&#20854;&#20182;&#34892;&#21160;&#24050;&#25104;&#20026;&#26368;&#32456;&#20915;&#23450;
&#24182;&#19988;&#19981;&#21487;&#19978;&#35785;&#65307; &#20294;&#26159;&#65292;&#21069;&#25552;&#26159;&#65292;&#22914;&#26524;&#26576;&#32532;&#32422;&#26041;&#25110;&#20854;&#20851;&#32852;&#20844;&#21496;&#26410;&#36981;&#23432;&#26412;&#21327;&#35758;&#30340;&#20219;&#20309;&#35268;&#23450;&#26159;&#36896;&#25104;&#20197;&#19979;&#24773;&#20917;&#30340;&#37325;&#22823;&#21407;&#22240;&#65292;&#21017;&#35813;&#32532;&#32422;&#26041;&#19981;&#24471;&#20139;&#26377;&#26681;&#25454;&#26412;&#31532;</FONT>6.1<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65288;</FONT>b<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#26465;&#32456;&#27490;&#26412;&#21327;&#35758;&#30340;&#26435;&#21033;&#65292;
&#25110;&#23454;&#36136;&#19978;&#23548;&#33268;&#20102;&#35813;&#25919;&#24220;&#26426;&#26500;&#30340;&#27492;&#31867;&#34892;&#21160;&#65307;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(c) by written notice
by the Seller if the required approval of shareholders of the Seller shall not have been obtained at the shareholder meeting of
the Seller; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&#22914;&#26524;&#26410;&#22312;&#21334;&#26041;&#30340;&#32929;&#19996;&#22823;&#20250;&#19978;&#33719;&#24471;&#21334;&#26041;&#30340;&#24517;&#35201;&#25209;&#20934;&#65292;&#21017;&#20197;&#21334;&#26041;&#20070;&#38754;&#36890;&#30693;&#30340;&#24418;&#24335;&#65307;
&#25110;&#32773;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(d) by written notice
by the Seller if the Merger shall not be closed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&#22914;&#26524;&#65288;&#21644;&#26032;&#34507;&#30340;&#65289;&#21512;&#24182;&#26410;&#23436;&#25104;&#65292;&#21017;&#20197;&#21334;&#26041;&#20070;&#38754;&#36890;&#30693;&#30340;&#26041;&#24335;&#25552;&#20986;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">6.2&nbsp;<U>Effect
of Termination</U>. In the event of the valid termination of this Agreement pursuant to&nbsp;<U>Section 6.1</U>, this Agreement
shall forthwith become void, and there shall be no Liability on the part of any Party or any of their respective Representatives,
and all rights and obligations of each Party shall cease, and nothing herein shall relieve any Party from Liability for any willful
breach of any representation, warranty, covenant or obligation under this Agreement or any Fraud Claim against such Party, in either
case, prior to termination of this Agreement. Without limiting the foregoing, and except as provided in this&nbsp;<U>Article VI</U>,
the Parties&rsquo; sole right prior to the Closing with respect to any breach of any representation, warranty, covenant or other
agreement contained in this Agreement by another Party or with respect to the transactions contemplated by this Agreement shall
be the right, if applicable, to terminate this Agreement pursuant to&nbsp;<U>Section 6.1</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#32456;&#27490;&#30340;&#25928;&#21147;&#12290;
&#22914;&#26524;&#26681;&#25454;</FONT>6.1<FONT STYLE="font-family: Times New Roman, Times, Serif">&#33410;&#26377;&#25928;&#32456;&#27490;&#20102;&#26412;&#21327;&#35758;&#65292;&#21017;&#26412;&#21327;&#35758;&#31435;&#21363;&#22833;&#25928;&#65292;&#20219;&#20309;&#19968;&#26041;&#25110;&#20854;&#20219;&#20309;&#20195;&#34920;&#22343;&#19981;&#25215;&#25285;&#20219;&#20309;&#36131;&#20219;&#65292;&#24182;&#19988;&#21508;&#26041;&#30340;&#25152;&#26377;&#26435;&#21033;&#21644;&#20041;&#21153;
&#32456;&#27490;&#65292;&#24182;&#19988;&#22312;&#20219;&#20309;&#24773;&#20917;&#19979;&#65292;&#22312;&#26412;&#21327;&#35758;&#32456;&#27490;&#20043;&#21069;&#65292;&#26412;&#21327;&#35758;&#20013;&#30340;&#20219;&#20309;&#20869;&#23481;&#22343;&#19981;&#20813;&#38500;&#20219;&#20309;&#19968;&#26041;&#23545;&#20219;&#20309;&#25925;&#24847;&#36829;&#21453;&#26412;&#21327;&#35758;&#39033;&#19979;&#30340;&#20219;&#20309;&#38472;&#36848;&#65292;&#25285;&#20445;&#65292;&#22865;&#32422;&#25110;&#20041;&#21153;&#25110;&#38024;&#23545;&#35813;&#26041;&#30340;&#27450;&#35784;&#35831;&#27714;&#30340;&#36131;&#20219;&#12290;
&#22312;&#19981;&#38480;&#21046;&#19978;&#36848;&#35268;&#23450;&#30340;&#24773;&#20917;&#19979;&#65292;&#24182;&#19988;&#38500;&#38750;&#26412;&#31532;&#20845;&#26465;&#21478;&#26377;&#35268;&#23450;&#65292;&#21542;&#21017;&#32532;&#32422;&#21452;&#26041;&#22312;&#32532;&#32422;&#20043;&#21069;&#30340;&#19987;&#26377;&#26435;&#21033;&#65292;&#28041;&#21450;&#20219;&#20309;&#19968;&#26041;&#36829;&#21453;&#26412;&#21327;&#35758;&#25152;&#36733;&#30340;&#20219;&#20309;&#38472;&#36848;&#65292;&#20445;&#35777;&#65292;&#30431;&#32422;&#25110;&#20854;&#20182;&#21327;&#35758;&#65292;&#25110;
&#22914;&#26524;&#36866;&#29992;&#65292;&#26681;&#25454;&#26412;&#21327;&#35758;&#36827;&#34892;&#30340;&#20132;&#26131;&#26159;&#26681;&#25454;</FONT>6.1<FONT STYLE="font-family: Times New Roman, Times, Serif">&#33410;&#32456;&#27490;&#26412;&#21327;&#35758;&#30340;&#26435;&#21033;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">6.3&nbsp;<U>Fees and
Expenses</U>. All Expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by
the Party incurring such expenses. As used in this Agreement, &ldquo;<B><I>Expenses</I></B>&rdquo; shall include all out-of-pocket
expenses (including all fees and expenses of counsel, accountants, investment bankers, financial advisors, financing sources, experts
and consultants to a Party hereto or any of its Affiliates) incurred by a Party or on its behalf in connection with or related
to the authorization, preparation, negotiation, execution or performance of this Agreement or any Ancillary Document related hereto
and all other matters related to the consummation of this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#36153;&#29992;&#21644;&#25903;&#20986;&#12290;
&#19982;&#26412;&#21327;&#35758;&#26377;&#20851;&#30340;&#25152;&#26377;&#36153;&#29992;&#20197;&#21450;&#25454;&#27492;&#25311;&#36827;&#34892;&#30340;&#20132;&#26131;&#24212;&#30001;&#21457;&#29983;&#27492;&#31867;&#36153;&#29992;&#30340;&#19968;&#26041;&#25903;&#20184;&#12290;
&#22312;&#26412;&#21327;&#35758;&#20013;&#65292;</FONT>&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#36153;&#29992;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#24212;&#21253;&#25324;&#25152;&#26377;&#33258;&#20184;&#36153;&#29992;&#65288;&#21253;&#25324;&#26412;&#21327;&#35758;&#19968;&#26041;&#25110;&#20854;&#20219;&#20309;&#20851;&#32852;&#20844;&#21496;&#30340;&#24459;&#24072;&#65292;&#20250;&#35745;&#24072;&#65292;&#25237;&#36164;&#38134;&#34892;&#23478;&#65292;&#36130;&#21153;&#39038;&#38382;&#65292;&#34701;&#36164;&#26469;&#28304;&#65292;&#19987;&#23478;&#21644;&#39038;&#38382;&#30340;&#25152;&#26377;&#36153;&#29992;&#21644;&#25903;&#20986;&#65289;
&#65289;&#30001;&#26576;&#26041;&#25110;&#20854;&#20195;&#34920;&#22240;&#19982;&#26412;&#21327;&#35758;&#25110;&#19982;&#26412;&#21327;&#35758;&#26377;&#20851;&#30340;&#20219;&#20309;&#36741;&#21161;&#25991;&#20214;&#20197;&#21450;&#19982;&#26412;&#21327;&#35758;&#23436;&#25104;&#26377;&#20851;&#30340;&#25152;&#26377;&#20854;&#20182;&#20107;&#39033;&#30340;&#25480;&#26435;&#65292;&#20934;&#22791;&#65292;&#35848;&#21028;&#65292;&#25191;&#34892;&#25110;&#23653;&#34892;&#32780;&#21457;&#29983;&#25110;&#30456;&#20851;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>ARTICLE
VII</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;<U><BR>
RELEASES and INDEMNIFICATION</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><U>&#35299;&#38500;&#21644;&#36180;&#20607;</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">7.1&nbsp;<U>Release
and Covenant Not to Sue</U>. Effective as of the Closing, to the fullest extent permitted by applicable Law, the Purchaser, on
behalf of itself and its Affiliates, respectively (the &ldquo;<B><I>Releasing Persons</I></B>&rdquo;), will release and discharge
the Seller from and against any and all Actions, obligations, agreements, debts and Liabilities whatsoever, whether known or unknown,
both at law and in equity, which such Releasing Person now has, has ever had or may hereafter have against the Seller arising on
or prior to the Closing Date or on account of or arising out of any matter occurring on or prior to the Closing Date, including
any rights to indemnification or reimbursement from Seller, whether pursuant to its organizational documents, Contract or otherwise,
and whether or not relating to claims pending on, or asserted after, the Closing Date. From and after the Closing, each Releasing
Person hereby irrevocably covenants to refrain from, directly or indirectly, asserting any Action, or commencing or causing to
be commenced, any Action of any kind against the Seller or its Affiliates, based upon any matter purported to be released hereby.
Notwithstanding anything herein to the contrary, the releases and restrictions set forth herein shall not apply to any claims a
Releasing Person may have against any party pursuant to the terms and conditions of this Agreement or any Ancillary Document.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#35299;&#38500;&#21644;&#19981;&#36215;&#35785;&#32422;&#23450;&#12290;&#33258;&#20132;&#26131;&#23436;&#25104;&#20043;&#26085;&#36215;&#65292;&#22312;&#36866;&#29992;&#27861;&#24459;&#20801;&#35768;&#30340;&#26368;&#22823;&#33539;&#22260;&#20869;&#65292;&#20080;&#26041;&#20998;&#21035;&#20195;&#34920;&#20854;&#26412;&#36523;&#21450;&#20854;&#20851;&#32852;&#20844;&#21496;&#65288;&#20197;&#19979;&#31616;&#31216;</FONT>&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#35299;&#38500;&#26435;&#20154;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#65292;&#35299;&#38500;&#24182;&#35299;&#38500;&#21334;&#26041;&#30340;&#20219;&#20309;&#21450;&#25152;&#26377;&#34892;&#20026;&#65292;&#20041;&#21153;&#65292;&#22312;&#20132;&#21106;&#26085;&#26399;&#25110;&#20043;&#21069;&#65292;&#25110;&#30001;&#20110;&#20197;&#19979;&#21407;&#22240;&#65292;&#35813;&#35299;&#38500;&#26435;&#20154;&#29616;&#22312;&#25110;&#20197;&#21518;&#21487;&#33021;&#23545;&#21334;&#26041;&#24050;&#32463;&#25317;&#26377;&#30340;&#65292;&#26080;&#35770;&#22312;&#27861;&#24459;&#19978;&#36824;&#26159;&#22312;&#26435;&#30410;&#19978;&#26080;&#35770;&#26159;&#24050;&#30693;&#30340;&#36824;&#26159;&#26410;&#30693;&#30340;&#65292;&#26080;&#35770;&#26159;&#24050;&#30693;&#30340;&#36824;&#26159;&#26410;&#30693;&#30340;&#21327;&#35758;&#65292;&#20538;&#21153;&#21644;&#36127;&#20538;&#22240;&#22312;&#20132;&#21106;&#26085;&#26399;&#20043;&#21069;&#25110;&#20043;&#21069;&#21457;&#29983;&#30340;&#20219;&#20309;&#20107;&#24773;&#32780;&#20135;&#29983;&#65292;&#21253;&#25324;&#23545;&#21334;&#26041;&#26681;&#25454;&#20854;&#32452;&#32455;&#25991;&#20214;&#65292;&#21512;&#21516;&#25110;&#20854;&#20182;&#26041;&#24335;&#20139;&#26377;&#30340;&#20219;&#20309;&#34917;&#20607;&#25110;&#25253;&#38144;&#26435;&#65292;&#19981;&#35770;&#26159;&#21542;&#22312;&#20132;&#21106;&#26085;&#26399;&#26102;&#27491;&#20027;&#24352;&#25110;&#20043;&#21518;&#20027;&#24352;&#30340;&#32034;&#36180;&#12290;&#20132;&#26131;&#32467;&#26463;&#21518;&#21450;&#20043;&#21518;&#65292;&#21508;&#35299;&#38500;&#26435;&#20154;&#22312;&#27492;&#19981;&#21487;&#25764;&#28040;&#30340;&#25215;&#35834;&#65292;&#23601;&#36825;&#37324;&#34987;&#35299;&#38500;&#30340;&#20219;&#20309;&#20107;&#24773;&#65292;&#19981;&#24471;&#30452;&#25509;&#25110;&#38388;&#25509;&#20027;&#24352;&#38024;&#23545;&#21334;&#26041;&#25110;&#20854;&#20851;&#32852;&#20844;&#21496;&#30340;&#20219;&#20309;&#24418;&#24335;&#30340;&#35785;&#35772;&#65292;&#25110;&#24320;&#22987;&#25110;&#24341;&#36215;&#23545;&#21334;&#26041;&#25110;&#20854;&#20851;&#32852;&#20844;&#21496;&#30340;&#20219;&#20309;&#24418;&#24335;&#30340;&#35785;&#35772;&#12290;&#23613;&#31649;&#26412;&#25991;&#26377;&#20219;&#20309;&#30456;&#21453;&#30340;&#35268;&#23450;&#65292;&#26412;&#21512;&#21516;&#25152;&#36848;&#30340;&#35299;&#38500;&#21644;&#38480;&#21046;&#22343;&#19981;&#36866;&#29992;&#20110;&#35299;&#38500;&#26435;&#20154;&#26681;&#25454;&#26412;&#21327;&#35758;&#25110;&#20219;&#20309;&#36741;&#21161;&#25991;&#20214;&#30340;&#26465;&#27454;&#21644;&#26465;&#20214;&#21487;&#33021;&#23545;&#20219;&#20309;&#19968;&#26041;&#25552;&#20986;&#30340;&#20219;&#20309;&#32034;&#36180;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">7.2 <U>Indemnification</U>.
Unless otherwise provided in this Agreement, each of the Seller and the Purchaser (the &ldquo;<B><I>Indemnitor</I></B>&rdquo;)
agrees to indemnify the other Party and each of its Affiliates, successors and assigns (the &ldquo;<B><I>Indemnitee</I></B>&rdquo;)
from and against any and all damages, losses and expenses (including, without limitation, legal fees and expenses and the costs
of investigating any claims, but excluding any consequential or indirect damages, lost profits, frustrated expenses, internal administration
and overhead costs) that the Indemnitee may incur or sustain from the Indemnitor&rsquo;s breach of any of its representations,
warranties or covenants in this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#20445;&#38556;&#12290;
&#38500;&#38750;&#26412;&#21327;&#35758;&#21478;&#26377;&#35268;&#23450;&#65292;&#21542;&#21017;&#21334;&#26041;&#21644;&#20080;&#26041;&#65288;&#20197;&#19979;&#31216;&ldquo;&#36180;&#20607;&#26041;&rdquo;&#65289;&#22343;&#21516;&#24847;&#23601;&#20219;&#20309;&#21450;&#25152;&#26377;&#25439;&#23475;&#65292;&#25439;&#22833;&#21521;&#21478;&#19968;&#26041;&#21450;&#20854;&#20851;&#32852;&#26041;&#65292;&#32487;&#25215;&#20154;&#21644;&#21463;&#35753;&#20154;&#65288;&ldquo;&#21463;&#20607;&#26041;&rdquo;&#65289;&#36827;&#34892;&#36180;&#20607;&#65292;
&#36180;&#20607;&#26041;&#21487;&#33021;&#23601;&#20854;&#36829;&#21453;&#22312;&#26412;&#21327;&#35758;&#20013;&#30340;&#20219;&#20309;&#38472;&#36848;&#65292;&#20445;&#35777;&#25110;&#30431;&#32422;&#32780;&#33268;&#21463;&#20607;&#20154;&#36973;&#21463;&#25110;&#25215;&#21463;&#30340;&#36153;&#29992;&#21644;&#25439;&#22833;&#65288;&#21253;&#25324;&#20294;&#19981;&#38480;&#20110;&#27861;&#24459;&#36153;&#29992;&#21644;&#36153;&#29992;&#20197;&#21450;&#35843;&#26597;&#20219;&#20309;&#32034;&#36180;&#30340;&#36153;&#29992;&#65292;&#20294;&#19981;&#21253;&#25324;&#20219;&#20309;&#38388;&#25509;&#25110;&#38388;&#25509;&#25439;&#22833;&#65292;&#21033;&#28070;&#25439;&#22833;&#65292;&#21463;&#25387;&#36153;&#29992;&#65292;&#20869;&#37096;&#31649;&#29702;&#36153;&#29992;&#21644;&#38388;&#25509;&#36153;&#29992;&#65289;&#36827;&#34892;&#36180;&#20607;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>ARTICLE
VIII</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;<U><BR>
Liability for Breach of Agreement</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#36829;&#32422;&#36131;&#20219;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">8.1&nbsp;<U>Indemnification
by the Purchaser</U>. Any breach of or failure to perform its representation, warranties, obligations or responsibilities by one
Party shall constitute a default. The breaching Party shall be liable for indemnifying the non-breaching Party against all monetary
losses suffered by the non-breaching Party as well as all expenses incurred by it for claiming its rights, including but not limited
to reasonable attorney fee, investigation fee and travel expense.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#20080;&#26041;&#36180;&#20607;&#12290;
&#20219;&#20309;&#19968;&#26041;&#36829;&#21453;&#25110;&#19981;&#23653;&#34892;&#20854;&#20195;&#34920;&#65292;&#20445;&#35777;&#65292;&#20041;&#21153;&#25110;&#36131;&#20219;&#65292;&#22343;&#26500;&#25104;&#36829;&#32422;&#12290;
&#36829;&#32422;&#26041;&#26377;&#36131;&#20219;&#36180;&#20607;&#38750;&#36829;&#32422;&#26041;&#36973;&#21463;&#38750;&#36829;&#32422;&#26041;&#36973;&#21463;&#30340;&#25152;&#26377;&#37329;&#38065;&#25439;&#22833;&#20197;&#21450;&#20854;&#22240;&#20027;&#24352;&#26435;&#21033;&#32780;&#36973;&#21463;&#30340;&#25152;&#26377;&#36153;&#29992;&#65292;&#21253;&#25324;&#20294;&#19981;&#38480;&#20110;&#21512;&#29702;&#30340;&#24459;&#24072;&#36153;&#65292;&#35843;&#26597;&#36153;&#21644;&#24046;&#26053;&#36153;
&#36153;&#29992;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="text-align: left; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">8.2 <U>Force Majeure</U>. Any delay in or
failure of performance by either Party of all or any of their obligations under this Agreement shall not constitute a breach hereunder
if, and to the extent that such delays or failures are caused by Force Majeure, provided that necessary remedial measures shall
be taken to reduce the damage under proper condition. The Force Majeure means objective events or circumstances, unpredictable,
unavoidable and uncontrollable, which includes earthquake, typhoon, flood, fire, war and other unpredictable, unavoidable and uncontrollable
Acts of Gods, and change of any laws, rules and regulations, promulgation of new laws, rules and regulations, or any government
act leading to direct influence on the performance of the Agreement or failure to perform the terms and conditions hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#19981;&#21487;&#25239;&#21147;&#12290;
&#22914;&#26524;&#20219;&#20309;&#19968;&#26041;&#24310;&#35823;&#25110;&#26410;&#33021;&#23653;&#34892;&#26412;&#21327;&#35758;&#39033;&#19979;&#30340;&#20840;&#37096;&#25110;&#20219;&#20309;&#20041;&#21153;&#65292;&#21017;&#22312;&#19981;&#21487;&#25239;&#21147;&#30340;&#24773;&#20917;&#19979;&#65292;&#19988;&#22312;&#19968;&#23450;&#31243;&#24230;&#19978;&#24212;&#30001;&#19981;&#21487;&#25239;&#21147;&#36896;&#25104;&#30340;&#65292;&#21017;&#19981;&#26500;&#25104;&#26412;&#21327;&#35758;&#30340;&#36829;&#21453;&#65292;&#20294;&#24517;&#39035;&#37319;&#21462;&#24517;&#35201;&#30340;&#34917;&#25937;&#25514;&#26045;&#12290;
&#22312;&#36866;&#24403;&#24773;&#20917;&#19979;&#37319;&#21462;&#20197;&#20943;&#23569;&#25439;&#22351;&#30340;&#25514;&#26045;&#12290;
&#19981;&#21487;&#25239;&#21147;&#26159;&#25351;&#19981;&#21487;&#39044;&#27979;&#65292;&#26080;&#27861;&#36991;&#20813;&#21644;&#26080;&#27861;&#25511;&#21046;&#30340;&#23458;&#35266;&#20107;&#20214;&#25110;&#24773;&#20917;&#65292;&#21253;&#25324;&#22320;&#38663;&#65292;&#21488;&#39118;&#65292;&#27946;&#27700;&#65292;&#28779;&#28798;&#65292;&#25112;&#20105;&#21644;&#20854;&#20182;&#19981;&#21487;&#39044;&#27979;&#65292;&#26080;&#27861;&#36991;&#20813;&#21644;&#19981;&#21487;&#25511;&#21046;&#30340;&#19978;&#24093;&#34892;&#20026;&#65292;&#20197;&#21450;&#20219;&#20309;&#27861;&#24459;&#65292;&#27861;&#35268;&#21644;&#27861;&#35268;&#30340;&#21464;&#26356;&#65292;&#26032;&#27861;&#35268;&#30340;&#39041;&#24067;&#12290;
&#27861;&#24459;&#65292;&#27861;&#35268;&#21644;&#35268;&#31456;&#25110;&#20219;&#20309;&#25919;&#24220;&#34892;&#20026;&#65292;&#30452;&#25509;&#24433;&#21709;&#21327;&#35758;&#30340;&#23653;&#34892;&#25110;&#26410;&#23653;&#34892;&#26412;&#21327;&#35758;&#30340;&#26465;&#27454;&#21644;&#26465;&#20214;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>ARTICLE
IX</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;<U><BR>
MISCELLANEOUS</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><U>&#38468;&#21017;</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"> 9.1&nbsp;<U>Registration</U>.
The Company shall, in accordance with the provisions herein, within 30 Business Days following the Closing Date, (i) report for
filing to, and register the transfer of Equity Interests and this Agreement with, local SAIC, and obtain a new business license
of the Company; and (ii) take all necessary steps to register or file the transfer of Equity Interests with various government
authorities as may be required by the laws of the PRC (&ldquo;<B><I>Registration</I></B>&rdquo;). Both the Seller and the Purchaser
shall offer any assistance and cooperation reasonably required to fulfil and complete those registrations or filings. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#27880;&#20876;&#12290;
&#20844;&#21496;&#24212;&#25353;&#29031;&#26412;&#35268;&#23450;&#22312;&#20132;&#21106;&#26085;&#26399;&#21518;&#30340;</FONT>30<FONT STYLE="font-family: Times New Roman, Times, Serif">&#20010;&#33829;&#19994;&#26085;&#20869;&#65292;&#65288;</FONT>i<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#21521;&#24403;&#22320;&#22269;&#23478;&#24037;&#21830;&#34892;&#25919;&#31649;&#29702;&#24635;&#23616;&#25253;&#21578;&#24182;&#21521;&#20854;&#30331;&#35760;&#24182;&#36716;&#35753;&#32929;&#26435;&#21644;&#26412;&#21327;&#35758;&#65292;&#24182;&#33719;&#24471;&#26032;&#30340;&#33829;&#19994;&#25191;&#29031;</FONT>;
<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65288;</FONT>ii<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#37319;&#21462;&#19968;&#20999;&#24517;&#35201;&#27493;&#39588;&#65292;&#25353;&#29031;&#20013;&#22269;&#27861;&#24459;&#30340;&#35268;&#23450;&#21521;&#21508;&#20010;&#25919;&#24220;&#26426;&#26500;&#27880;&#20876;&#25110;&#25552;&#20132;&#32929;&#26435;&#36716;&#35753;&#12290;
&#21334;&#26041;&#21644;&#20080;&#26041;&#22343;&#24212;&#25552;&#20379;&#21512;&#29702;&#30340;&#21327;&#21161;&#21644;&#21512;&#20316;&#65292;&#20197;&#23436;&#25104;&#24182;&#23436;&#25104;&#36825;&#20123;&#27880;&#20876;&#25110;&#22791;&#26696;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">If a separate equity
transfer agreement is signed for the purpose of Registration under this Section 9.1 (the &ldquo;<B><I>Registration Agreement</I></B>&rdquo;),
the Parties acknowledge and agree that the Registration Agreement shall only be used for handling Registrations as may be required
by law. Wherever there is any inconsistency between this Agreement and the Registration Agreement, this Agreement shall govern.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#22914;&#20026;&#32929;&#26435;&#36716;&#35753;&#24037;&#21830;&#21464;&#26356;&#30331;&#35760;&#31561;&#35201;&#27714;&#65292;&#21478;&#34892;&#31614;&#32626;&#32929;&#26435;&#36716;&#35753;&#21327;&#35758;&#30340;&#65288;&#20197;&#19979;&#31616;&#31216;</FONT>&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#24037;&#21830;&#22791;&#26696;&#21327;&#35758;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#65292;&#21452;&#26041;&#19968;&#33268;&#30830;&#35748;&#24182;&#21516;&#24847;&#65306;&#35813;&#31561;&#24037;&#21830;&#22791;&#26696;&#21327;&#35758;&#20165;&#20026;&#21150;&#29702;&#26412;&#27425;&#32929;&#26435;&#36716;&#35753;&#24037;&#21830;&#21464;&#26356;&#30331;&#35760;&#25163;&#32493;&#20043;&#29992;&#65307;&#33509;&#26412;&#21327;&#35758;&#21644;&#24037;&#21830;&#22791;&#26696;&#21327;&#35758;&#26377;&#19981;&#19968;&#33268;&#20043;&#22788;&#30340;&#65292;&#20197;&#26412;&#21327;&#35758;&#32422;&#23450;&#20026;&#20934;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">9.2&nbsp;<U>Confidentiality</U>.
The terms and conditions are confidential and shall not be disclosed to any third party without other Party&rsquo;s prior written
consent. If required by Law or Governmental Authority, the disclosing party shall discuss with the other party the disclosure and
submission of relevant information within reasonable time prior to the disclosure and submission. The Parties shall cause their
respective Representatives to perform the confidentiality obligation set forth in this Section. This Section shall survive the
termination of this Agreement for any reason.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#20445;&#23494;&#12290;
&#36825;&#20123;&#26465;&#27454;&#21644;&#26465;&#20214;&#26159;&#26426;&#23494;&#30340;&#65292;&#26410;&#32463;&#21478;&#19968;&#26041;&#20107;&#20808;&#20070;&#38754;&#21516;&#24847;&#65292;&#19981;&#24471;&#23558;&#20854;&#36879;&#38706;&#32473;&#20219;&#20309;&#31532;&#19977;&#26041;&#12290;
&#22914;&#26524;&#27861;&#24459;&#25110;&#25919;&#24220;&#26426;&#26500;&#26377;&#35201;&#27714;&#65292;&#25259;&#38706;&#26041;&#24212;&#22312;&#25259;&#38706;&#21644;&#25552;&#20132;&#20043;&#21069;&#30340;&#21512;&#29702;&#26102;&#38388;&#20869;&#19982;&#21478;&#19968;&#26041;&#35752;&#35770;&#25259;&#38706;&#21644;&#25552;&#20132;&#30456;&#20851;&#20449;&#24687;&#12290;
&#21508;&#26041;&#24212;&#20419;&#20351;&#20854;&#21508;&#33258;&#30340;&#20195;&#34920;&#23653;&#34892;&#26412;&#33410;&#35268;&#23450;&#30340;&#20445;&#23494;&#20041;&#21153;&#12290;
&#26412;&#33410;&#26080;&#35770;&#20986;&#20110;&#20219;&#20309;&#21407;&#22240;&#22343;&#24212;&#22312;&#26412;&#21327;&#35758;&#32456;&#27490;&#21518;&#32487;&#32493;&#26377;&#25928;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">9.3 <U>Binding Effect;
Assignment</U>. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties hereto
and their respective successors and permitted assigns. This Agreement shall not be assigned by operation of Law or otherwise without
the prior written consent of the Purchaser and the Seller, and any assignment without such consent shall be null and void;&nbsp;<U>provided</U>&nbsp;that
no such assignment shall relieve the assigning Party of its obligations hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#32422;&#26463;&#25928;&#26524;&#65307;
&#36716;&#35753;&#12290; &#26412;&#21327;&#35758;&#21450;&#26412;&#21327;&#35758;&#30340;&#25152;&#26377;&#26465;&#27454;&#24212;&#23545;&#26412;&#21327;&#35758;&#21452;&#26041;&#21450;&#20854;&#21508;&#33258;&#30340;&#32487;&#25215;&#20154;&#21644;&#20801;&#35768;&#30340;&#21463;&#35753;&#20154;&#20855;&#26377;&#32422;&#26463;&#21147;&#65292;&#24182;&#30830;&#20445;&#20854;&#21033;&#30410;&#12290;
&#26410;&#32463;&#20080;&#21334;&#21452;&#26041;&#20107;&#20808;&#20070;&#38754;&#21516;&#24847;&#65292;&#19981;&#24471;&#36890;&#36807;&#27861;&#24459;&#25110;&#20854;&#20182;&#26041;&#24335;&#36716;&#35753;&#26412;&#21327;&#35758;&#65307;&#26410;&#32463;&#20080;&#26041;&#21644;&#21334;&#26041;&#20107;&#20808;&#20070;&#38754;&#21516;&#24847;&#65292;&#19981;&#24471;&#36716;&#35753;&#26412;&#21327;&#35758;&#65307;
&#20294;&#27492;&#31867;&#36716;&#35753;&#19981;&#24471;&#35299;&#38500;&#36716;&#35753;&#26041;&#22312;&#26412;&#21327;&#35758;&#39033;&#19979;&#30340;&#20041;&#21153;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">9.4&nbsp;<U>Third Parties</U>.
Nothing contained in this Agreement or in any instrument or document executed by any party in connection with the transactions
contemplated hereby shall create any rights in, or be deemed to have been executed for the benefit of, any Person that is not a
Party hereto or thereto or a successor or permitted assign of such a Party.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#31532;&#19977;&#26041;&#12290;
&#26412;&#21327;&#35758;&#25110;&#20219;&#20309;&#19968;&#26041;&#19982;&#26412;&#21327;&#35758;&#25152;&#36827;&#34892;&#30340;&#20132;&#26131;&#26377;&#20851;&#30340;&#20219;&#20309;&#25991;&#20214;&#25110;&#25991;&#20214;&#20013;&#25152;&#21253;&#21547;&#30340;&#20219;&#20309;&#20869;&#23481;&#65292;&#22343;&#19981;&#24471;&#20026;&#20219;&#20309;&#38750;&#26412;&#21327;&#35758;&#24403;&#20107;&#26041;&#30340;&#20154;&#21019;&#36896;&#20219;&#20309;&#26435;&#21033;&#25110;&#34987;&#35270;&#20026;&#24050;&#20026;&#20219;&#20309;&#20154;&#30340;&#21033;&#30410;&#25191;&#34892;
&#25110;&#35813;&#24403;&#20107;&#26041;&#30340;&#32487;&#25215;&#20154;&#25110;&#20801;&#35768;&#30340;&#21463;&#35753;&#20154;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">9.5&nbsp;<U>Dispute
Resolution</U>. The execution, validity, interpretation, performance, implementation and dispute resolution of this Agreement shall
be governed by and construed in accordance with the laws of China. Any dispute arising out of or in connection with this Agreement
shall be settled by the parties hereto through friendly negotiation. Either party may submit any dispute failing friendly settlement
to competent courts where this Agreement is executed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#20105;&#31471;&#35299;&#20915;&#12290;
&#26412;&#21327;&#35758;&#30340;&#25191;&#34892;&#12289;&#26377;&#25928;&#24615;&#12289;&#35299;&#37322;&#12289;&#25191;&#34892;&#21644;&#20105;&#35758;&#35299;&#20915;&#24212;&#21463;&#20013;&#22269;&#27861;&#24459;&#31649;&#36758;&#24182;&#25454;&#20854;&#35299;&#37322;&#12290;
&#22240;&#26412;&#21327;&#35758;&#24341;&#36215;&#30340;&#25110;&#19982;&#26412;&#21327;&#35758;&#26377;&#20851;&#30340;&#20219;&#20309;&#20105;&#35758;&#65292;&#24212;&#30001;&#21452;&#26041;&#36890;&#36807;&#21451;&#22909;&#21327;&#21830;&#35299;&#20915;&#12290;
&#20219;&#20309;&#19968;&#26041;&#22914;&#26410;&#33021;&#21451;&#22909;&#35299;&#20915;&#65292;&#22343;&#21487;&#21521;&#26412;&#21327;&#35758;&#31614;&#32626;&#22320;&#30340;&#26377;&#31649;&#36758;&#26435;&#30340;&#27861;&#38498;&#25552;&#36215;&#35785;&#35772;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">9.6&nbsp;<U>Specific
Performance</U>. Each Party acknowledges that the rights of each Party to consummate the transactions contemplated hereby are unique,
recognizes and affirms that in the event of a breach of this Agreement by any Party, money damages may be inadequate and the non-breaching
Parties may have not adequate remedy at law, and agree that irreparable damage would occur in the event that any of the provisions
of this Agreement were not performed by an applicable Party in accordance with their specific terms or were otherwise breached.
Accordingly, each Party shall be entitled to seek an injunction or restraining order to prevent breaches of this Agreement and
to seek to enforce specifically the terms and provisions hereof, without the requirement to post any bond or other security or
to prove that money damages would be inadequate, this being in addition to any other right or remedy to which such Party may be
entitled under this Agreement, at law or in equity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#20855;&#20307;&#34920;&#29616;&#12290;
&#27599;&#19968;&#26041;&#22343;&#25215;&#35748;&#65292;&#20854;&#36798;&#25104;&#20132;&#26131;&#30340;&#26435;&#21033;&#26159;&#29420;&#19968;&#26080;&#20108;&#30340;&#65292;&#24182;&#30830;&#35748;&#65292;&#22914;&#26524;&#20219;&#20309;&#19968;&#26041;&#36829;&#21453;&#26412;&#21327;&#35758;&#65292;&#21017;&#37329;&#38065;&#25439;&#22833;&#21487;&#33021;&#19981;&#36275;&#65292;&#24182;&#19988;&#38750;&#36829;&#32422;&#26041;&#21487;&#33021;&#27809;&#26377;&#36275;&#22815;&#30340;&#36180;&#20607;&#37329;&#12290;
&#24182;&#20381;&#27861;&#37319;&#21462;&#34917;&#25937;&#25514;&#26045;&#65292;&#24182;&#21516;&#24847;&#22914;&#26524;&#36866;&#29992;&#32532;&#32422;&#26041;&#26410;&#25353;&#29031;&#20854;&#29305;&#23450;&#26465;&#27454;&#25191;&#34892;&#26412;&#21327;&#35758;&#30340;&#20219;&#20309;&#35268;&#23450;&#25110;&#20197;&#20854;&#20182;&#26041;&#24335;&#36829;&#21453;&#20102;&#26412;&#21327;&#35758;&#30340;&#20219;&#20309;&#35268;&#23450;&#65292;&#21017;&#20250;&#36896;&#25104;&#26080;&#27861;&#24357;&#34917;&#30340;&#25439;&#23475;&#12290;
&#22240;&#27492;&#65292;&#27599;&#19968;&#24403;&#20107;&#26041;&#22343;&#26377;&#26435;&#23547;&#27714;&#31105;&#21046;&#20196;&#25110;&#31105;&#27490;&#20196;&#65292;&#20197;&#38450;&#27490;&#36829;&#21453;&#26412;&#21327;&#35758;&#30340;&#35268;&#23450;&#65292;&#24182;&#23547;&#27714;&#20855;&#20307;&#25191;&#34892;&#26412;&#21327;&#35758;&#30340;&#26465;&#27454;&#21644;&#35268;&#23450;&#65292;&#32780;&#26080;&#38656;&#21457;&#24067;&#20219;&#20309;&#20445;&#35777;&#37329;&#25110;&#20854;&#20182;&#25285;&#20445;&#25110;&#35777;&#26126;&#23558;&#23545;&#37329;&#38065;&#36896;&#25104;&#25439;&#23475;&#30340;&#36180;&#20607;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">9.7&nbsp;<U>Severability</U>.
In case any provision in this Agreement shall be held invalid, illegal or unenforceable in a jurisdiction, such provision shall
be modified or deleted, as to the jurisdiction involved, only to the extent necessary to render the same valid, legal and enforceable,
and the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby
nor shall the validity, legality or enforceability of such provision be affected thereby in any other jurisdiction. Upon such determination
that any term or other provision is invalid, illegal or incapable of being enforced, the Parties will substitute for any invalid,
illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable,
the intent and purpose of such invalid, illegal or unenforceable provision.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#21487;&#20998;&#21106;&#24615;&#12290;
&#22914;&#26524;&#26412;&#21327;&#35758;&#20013;&#30340;&#20219;&#20309;&#35268;&#23450;&#22312;&#26576;&#21496;&#27861;&#31649;&#36758;&#21306;&#20013;&#34987;&#35748;&#20026;&#26159;&#26080;&#25928;&#65292;&#38750;&#27861;&#25110;&#19981;&#21487;&#25191;&#34892;&#65292;&#21017;&#20165;&#22312;&#20351;&#35813;&#21496;&#27861;&#31649;&#36758;&#21306;&#26377;&#25928;&#65292;&#21512;&#27861;&#19988;&#21487;&#24378;&#21046;&#25191;&#34892;&#35813;&#35268;&#23450;&#30340;&#33539;&#22260;&#20869;&#65292;&#25165;&#24212;&#20462;&#25913;&#25110;&#21024;&#38500;&#35813;&#35268;&#23450;&#12290;
&#20854;&#20313;&#26465;&#27454;&#30340;&#26377;&#25928;&#24615;&#65292;&#21512;&#27861;&#24615;&#21644;&#21487;&#25191;&#34892;&#24615;&#19981;&#20250;&#22240;&#27492;&#21463;&#21040;&#20219;&#20309;&#24433;&#21709;&#25110;&#25439;&#23475;&#65292;&#22312;&#20219;&#20309;&#20854;&#20182;&#21496;&#27861;&#31649;&#36758;&#21306;&#20013;&#65292;&#27492;&#31867;&#26465;&#27454;&#30340;&#26377;&#25928;&#24615;&#65292;&#21512;&#27861;&#24615;&#25110;&#21487;&#25191;&#34892;&#24615;&#20063;&#19981;&#20250;&#21463;&#21040;&#20219;&#20309;&#24433;&#21709;&#12290;
&#19968;&#26086;&#30830;&#23450;&#20219;&#20309;&#26465;&#27454;&#25110;&#20854;&#20182;&#35268;&#23450;&#26080;&#25928;&#65292;&#36829;&#27861;&#25110;&#26080;&#27861;&#25191;&#34892;&#65292;&#21452;&#26041;&#23558;&#22312;&#26377;&#25928;&#65292;&#21512;&#27861;&#21644;&#21487;&#25191;&#34892;&#30340;&#33539;&#22260;&#20869;&#26367;&#20195;&#36866;&#24403;&#65292;&#20844;&#24179;&#30340;&#35268;&#23450;&#20195;&#26367;&#20219;&#20309;&#26080;&#25928;&#65292;&#38750;&#27861;&#25110;&#19981;&#21487;&#25191;&#34892;&#30340;&#35268;&#23450;
&#65292;&#27492;&#31867;&#26080;&#25928;&#65292;&#38750;&#27861;&#25110;&#26080;&#27861;&#25191;&#34892;&#30340;&#26465;&#27454;&#30340;&#24847;&#22270;&#21644;&#30446;&#30340;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">9.8&nbsp;<U>Amendment</U>.
This Agreement may be amended, supplemented or modified only by execution of a written instrument signed by the Purchaser and the
Seller.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#34917;&#20805;&#21327;&#35758;&#12290;
&#21482;&#26377;&#36890;&#36807;&#25191;&#34892;&#20080;&#21334;&#21452;&#26041;&#31614;&#32626;&#30340;&#20070;&#38754;&#25991;&#20070;&#65292;&#25165;&#33021;&#23545;&#26412;&#21327;&#35758;&#36827;&#34892;&#20462;&#25913;&#65292;&#34917;&#20805;&#25110;&#20462;&#25913;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">9.9 <U>Waiver</U>.
The Purchaser on behalf of itself and its Affiliates, the Company on behalf of itself and its Affiliates, and the Seller on behalf
of itself, may in its sole discretion (i) extend the time for the performance of any obligation or other act of any other non-Affiliated
Party hereto, (ii)&nbsp;waive any inaccuracy in the representations and warranties by such other non-Affiliated Party contained
herein or in any document delivered pursuant hereto and (iii) waive compliance by such other non-Affiliated Party with any covenant
or condition contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed
by the Party or Parties to be bound thereby. Notwithstanding the foregoing, no failure or delay by a Party in exercising any right
hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise
of any other right hereunder.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#35905;&#20813;&#12290;
&#20080;&#26041;&#20195;&#34920;&#33258;&#24049;&#21450;&#20854;&#20851;&#32852;&#20844;&#21496;&#65292;&#20844;&#21496;&#20195;&#34920;&#33258;&#36523;&#21450;&#20854;&#20851;&#32852;&#20844;&#21496;&#20197;&#21450;&#21334;&#26041;&#20195;&#34920;&#33258;&#24049;&#65288;</FONT>i<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#21487;&#20197;&#33258;&#34892;&#20915;&#23450;&#65288;</FONT>i<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#24310;&#38271;&#23653;&#34892;&#20219;&#20309;&#20041;&#21153;&#25110;&#20219;&#20309;&#20854;&#20182;&#34892;&#20026;&#30340;&#26102;&#38388;
&#26412;&#21327;&#35758;&#30340;&#20854;&#20182;&#38750;&#20851;&#32852;&#26041;&#65292;&#65288;</FONT>ii<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#25918;&#24323;&#26412;&#21327;&#35758;&#25110;&#26681;&#25454;&#26412;&#21327;&#35758;&#25552;&#20379;&#30340;&#20219;&#20309;&#25991;&#20214;&#20013;&#21253;&#21547;&#30340;&#35813;&#20854;&#20182;&#38750;&#20851;&#32852;&#26041;&#30340;&#38472;&#36848;&#21644;&#20445;&#35777;&#20013;&#30340;&#20219;&#20309;&#19981;&#20934;&#30830;&#20043;&#22788;&#65292;&#20197;&#21450;&#65288;</FONT>iii<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#25918;&#24323;&#35813;&#20854;&#20182;&#38750;&#20851;&#32852;&#26041;&#36981;&#23432;&#20219;&#20309;&#20844;&#32422;
&#25110;&#27492;&#22788;&#21253;&#21547;&#30340;&#26465;&#20214;&#12290; &#20219;&#20309;&#27492;&#31867;&#24310;&#26399;&#25110;&#25918;&#24323;&#22343;&#24212;&#20165;&#22312;&#30001;&#19968;&#20010;&#25110;&#22810;&#20010;&#21463;&#20854;&#32422;&#26463;&#30340;&#24403;&#20107;&#26041;&#31614;&#32626;&#30340;&#20070;&#38754;&#25991;&#20070;&#20013;&#35268;&#23450;&#26102;&#26377;&#25928;&#12290;
&#23613;&#31649;&#26377;&#21069;&#36848;&#35268;&#23450;&#65292;&#20219;&#20309;&#19968;&#26041;&#26410;&#33021;&#34892;&#20351;&#25110;&#24310;&#36831;&#34892;&#20351;&#26412;&#21327;&#35758;&#39033;&#19979;&#30340;&#20219;&#20309;&#26435;&#21033;&#22343;&#19981;&#24471;&#25918;&#24323;&#20854;&#34892;&#20351;&#26435;&#21033;&#65292;&#20219;&#20309;&#21333;&#39033;&#25110;&#37096;&#20998;&#34892;&#20351;&#20063;&#19981;&#24471;&#25490;&#38500;&#26412;&#21327;&#35758;&#39033;&#19979;&#20219;&#20309;&#20854;&#20182;&#26435;&#21033;&#30340;&#20219;&#20309;&#20854;&#20182;&#25110;&#36827;&#19968;&#27493;&#30340;&#34892;&#20351;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">9.10&nbsp;<U>Entire
Agreement</U>. This Agreement and the documents or instruments referred to herein, including any exhibits, annexes and schedules
attached hereto, which exhibits, annexes and schedules are incorporated herein by reference, embody the entire agreement and understanding
of the Parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations,
warranties, covenants or undertakings, other than those expressly set forth or referred to herein or the documents or instruments
referred to herein, which collectively supersede all prior agreements and the understandings among the Parties with respect to
the subject matter contained herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;&nbsp;&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#23436;&#25972;&#21327;&#35758;&#12290;
&#26412;&#21327;&#35758;&#21450;&#26412;&#25991;&#20013;&#25152;&#25351;&#30340;&#25991;&#20214;&#25110;&#24037;&#20855;&#65292;&#21253;&#25324;&#20854;&#25152;&#38468;&#30340;&#20219;&#20309;&#38468;&#20214;&#21644;&#26102;&#38388;&#34920;&#65292;&#20854;&#20013;&#30340;&#38468;&#20214;&#21644;&#26102;&#38388;&#34920;&#65292;&#22343;&#20197;&#24341;&#29992;&#26041;&#24335;&#24182;&#20837;&#26412;&#25991;&#65292;&#20307;&#29616;&#20102;&#26412;&#21327;&#35758;&#21508;&#26041;&#23601;&#25152;&#21547;&#20027;&#39064;&#30340;&#23436;&#25972;&#21327;&#35758;&#21644;&#35845;&#35299;
&#22312;&#36825;&#37324;&#12290; &#38500;&#26412;&#25991;&#26126;&#30830;&#35268;&#23450;&#25110;&#25552;&#21450;&#30340;&#38480;&#21046;&#25110;&#26412;&#25991;&#25552;&#21450;&#30340;&#25991;&#20214;&#25110;&#25991;&#20070;&#22806;&#65292;&#27809;&#26377;&#20219;&#20309;&#38480;&#21046;&#65292;&#36825;&#20123;&#26465;&#27454;&#12289;&#25215;&#35834;&#12289;&#22768;&#26126;&#12289;&#20445;&#35777;&#12289;&#30431;&#32422;&#25110;&#25215;&#35834;&#23558;&#38598;&#20307;&#21462;&#20195;&#25152;&#26377;&#20808;&#21069;&#30340;&#21327;&#35758;&#20197;&#21450;&#21508;&#32532;&#32422;&#26041;&#20043;&#38388;&#23601;
&#26412;&#25991;&#21253;&#21547;&#30340;&#20027;&#39064;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">9.11&nbsp;<U>Counterparts</U>.
This Agreement may be executed and delivered (including by facsimile or other electronic transmission) in one or more counterparts,
and by the different Parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#25991;&#26412;&#12290;
&#26412;&#21327;&#35758;&#21487;&#20197;&#22312;&#19968;&#20010;&#25110;&#22810;&#20010;&#25991;&#26412;&#25191;&#34892;&#65288;&#21253;&#25324;&#36890;&#36807;&#20256;&#30495;&#25110;&#20854;&#20182;&#30005;&#23376;&#20256;&#36755;&#65289;&#65292;&#24182;&#21487;&#20197;&#30001;&#26412;&#21327;&#35758;&#30340;&#19981;&#21516;&#24403;&#20107;&#26041;&#22312;&#21333;&#29420;&#30340;&#25991;&#26412;&#20013;&#25191;&#34892;&#21644;&#20132;&#20184;&#65292;&#22312;&#25191;&#34892;&#26102;&#65292;&#27599;&#20010;&#25991;&#26412;&#22343;&#24212;&#34987;&#35270;&#20026;&#21407;&#22987;&#21327;&#35758;&#65292;&#20294;&#25152;&#26377;&#20869;&#23481;&#24212;&#21512;&#35745;&#22312;&#19968;&#36215;
&#26500;&#25104;&#19968;&#39033;&#30456;&#21516;&#30340;&#21327;&#35758;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>ARTICLE
X</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>&nbsp;<U><BR>
DEFINITIONS</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B><U>&#23450;&#20041;</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">10.1&nbsp;<U>Certain
Definitions</U>. For purpose of this Agreement, the following capitalized terms have the following meanings:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#29305;&#23450;&#23450;&#20041;&#12290;
&#23601;&#26412;&#21327;&#35758;&#32780;&#35328;&#65292;&#20197;&#19979;&#22823;&#20889;&#26415;&#35821;&#20855;&#26377;&#20197;&#19979;&#21547;&#20041;&#65306;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<B><I>Action</I></B>&rdquo;
means any notice of noncompliance or violation, or any claim, demand, charge, action, suit, litigation, audit, settlement, complaint,
stipulation, assessment or arbitration, or any request (including any request for information), inquiry, hearing, proceeding or
investigation, by or before any Governmental Authority.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#35785;&#35772;</FONT>&rdquo;
<FONT STYLE="font-family: Times New Roman, Times, Serif">&#26159;&#25351;&#20219;&#20309;&#36829;&#35268;&#25110;&#36829;&#35268;&#36890;&#30693;&#65292;&#25110;&#20219;&#20309;&#32034;&#36180;&#12289;&#35201;&#27714;&#12289;&#25351;&#25511;&#12289;&#35785;&#35772;&#12289;&#23457;&#35745;&#12289;&#21644;&#35299;&#12289;&#25237;&#35785;&#12289;&#35268;&#23450;&#12289;&#35780;&#20272;&#25110;&#20210;&#35009;&#65292;&#25110;&#20219;&#20309;&#35201;&#27714;&#30001;&#20219;&#20309;&#25919;&#24220;&#26426;&#26500;&#36827;&#34892;&#32838;&#35759;&#65292;&#36827;&#34892;&#25110;&#35843;&#26597;&#65288;&#21253;&#25324;&#20219;&#20309;&#20449;&#24687;&#35201;&#27714;&#65289;&#12289;&#26597;&#35810;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<B><I>Affiliate</I></B>&rdquo;
means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control
with such Person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#23545;&#20110;&#20219;&#20309;&#20154;&#65292;</FONT>&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#20851;&#32852;&#20844;&#21496;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#26159;&#25351;&#30452;&#25509;&#25110;&#38388;&#25509;&#25511;&#21046;&#65292;&#21463;&#20854;&#25511;&#21046;&#25110;&#19982;&#20043;&#20849;&#21516;&#25511;&#21046;&#30340;&#20219;&#20309;&#20854;&#20182;&#20154;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<B><I>Ancillary
Documents</I></B>&rdquo; means each agreement, instrument or document attached hereto as an Exhibit, including the other agreements,
certificates and instruments to be executed or delivered by any of the parties hereto in connection with or pursuant to this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#36741;&#21161;&#25991;&#20214;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#26159;&#25351;&#20316;&#20026;&#38468;&#20214;&#25152;&#38468;&#30340;&#27599;&#20221;&#21327;&#35758;&#65292;&#25991;&#20070;&#25110;&#25991;&#20214;&#65292;&#21253;&#25324;&#30001;&#20219;&#20309;&#24403;&#20107;&#26041;&#26681;&#25454;&#25110;&#26681;&#25454;&#26412;&#21327;&#35758;&#25191;&#34892;&#25110;&#20132;&#20184;&#30340;&#20854;&#20182;&#21327;&#35758;&#65292;&#35777;&#20070;&#21644;&#25991;&#20070;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<B><I>Business
Day</I></B>&rdquo; means any day other than a Saturday, Sunday or a legal holiday on which commercial banking institutions in Beijing,
China are authorized to close for business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#33829;&#19994;&#26085;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#26159;&#25351;&#38500;&#26143;&#26399;&#20845;&#65292;&#26143;&#26399;&#26085;&#25110;&#27861;&#23450;&#20551;&#26085;&#20197;&#22806;&#30340;&#20219;&#20309;&#19968;&#22825;&#65292;&#20013;&#22269;&#21271;&#20140;&#30340;&#21830;&#19994;&#38134;&#34892;&#26426;&#26500;&#26377;&#26435;&#22312;&#35813;&#20551;&#26085;&#20241;&#19994;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<B><I>Consent</I></B>&rdquo;
means any consent, approval, waiver, authorization or Permit of, or notice to or declaration or filing with any Governmental Authority
or any other Person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#21516;&#24847;</FONT>&rdquo;
<FONT STYLE="font-family: Times New Roman, Times, Serif">&#26159;&#25351;&#21521;&#20219;&#20309;&#25919;&#24220;&#26426;&#26500;&#25110;&#20219;&#20309;&#20854;&#20182;&#20154;&#30340;&#21516;&#24847;&#65292;&#25209;&#20934;&#65292;&#25918;&#24323;&#65292;&#25480;&#26435;&#25110;&#35768;&#21487;&#65292;&#25110;&#21521;&#20854;&#21457;&#20986;&#30340;&#36890;&#30693;&#65292;&#22768;&#26126;&#65292;&#22768;&#26126;&#25110;&#30003;&#35831;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<B><I>Contracts</I></B>&rdquo;
means all contracts, agreements, binding arrangements, bonds, notes, indentures, mortgages, debt instruments, purchase order, licenses,
franchises, leases and other instruments or obligations of any kind, written or oral (including any amendments and other modifications
thereto).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#21512;&#21516;</FONT>&rdquo;
<FONT STYLE="font-family: Times New Roman, Times, Serif">&#26159;&#25351;&#25152;&#26377;&#21512;&#21516;&#65292;&#21327;&#35758;&#65292;&#26377;&#32422;&#26463;&#21147;&#30340;&#23433;&#25490;&#65292;&#20538;&#21048;&#65292;&#31080;&#25454;&#65292;&#22865;&#32422;&#65292;&#25269;&#25276;&#65292;&#20538;&#21153;&#24037;&#20855;&#65292;&#23450;&#36141;&#21333;&#65292;&#35768;&#21487;&#35777;&#65292;&#29305;&#35768;&#32463;&#33829;&#26435;&#65292;&#31199;&#36161;&#21644;&#20854;&#20182;&#20219;&#20309;&#24418;&#24335;&#30340;&#20070;&#38754;&#25110;&#21475;&#22836;&#20041;&#21153;&#65288;&#21253;&#25324;&#20219;&#20309;&#20462;&#27491;&#21644;&#20854;&#20182;&#20462;&#25913;&#65289;
&#21040;&#27492;&#65289;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<B><I>Control</I></B>&rdquo;
of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies
of such Person, whether through the ownership of voting securities, by contract, or otherwise. &ldquo;Controlled&rdquo;, &ldquo;Controlling&rdquo;
and &ldquo;under common Control with&rdquo; have correlative meanings. Without limiting the foregoing a Person (the &ldquo;<B><I>Controlled
Person</I></B>&rdquo;) shall be deemed Controlled by (a) any other Person (the &ldquo;<B><I>10% Owner</I></B>&rdquo;) (i) owning
beneficially, as meant in Rule 13d-3 under the Exchange Act, securities entitling such Person to cast ten percent (10%) or more
of the votes for election of directors or equivalent governing authority of the Controlled Person or (ii) entitled to be allocated
or receive ten percent (10%) or more of the profits, losses, or distributions of the Controlled Person; (b) an officer, director,
general partner, partner (other than a limited partner), manager, or member (other than a member having no management authority
that is not a 10% Owner) of the Controlled Person; or (c) a spouse, parent, lineal descendant, sibling, aunt, uncle, niece, nephew,
mother-in-law, father-in-law, sister-in-law, or brother-in-law of an Affiliate of the Controlled Person or a trust for the benefit
of an Affiliate of the Controlled Person or of which an Affiliate of the Controlled Person is a trustee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#20154;</FONT>&rdquo;
<FONT STYLE="font-family: Times New Roman, Times, Serif">&#30340;</FONT> &ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#25511;&#21046;</FONT>&rdquo;
<FONT STYLE="font-family: Times New Roman, Times, Serif">&#26159;&#25351;&#30452;&#25509;&#25110;&#38388;&#25509;&#25317;&#26377;&#25351;&#23548;&#25110;&#24341;&#36215;&#35813;&#20154;&#30340;&#31649;&#29702;&#21644;&#25919;&#31574;&#26041;&#21521;&#30340;&#26435;&#21147;&#65292;&#26080;&#35770;&#26159;&#36890;&#36807;&#34920;&#20915;&#26435;&#35777;&#21048;&#30340;&#25152;&#26377;&#26435;&#65292;&#36890;&#36807;&#21512;&#21516;&#36824;&#26159;&#20854;&#20182;&#26041;&#24335;&#12290;</FONT>
&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#21463;&#25511;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65292;</FONT>&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#25511;&#21046;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#21644;</FONT>&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#19982;</FONT>...<FONT STYLE="font-family: Times New Roman, Times, Serif">&#20849;&#21516;&#25511;&#21046;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#20855;&#26377;&#30456;&#20851;&#30340;&#21547;&#20041;&#12290;&#22312;&#19981;&#38480;&#21046;&#19978;&#36848;&#35268;&#23450;&#30340;&#21069;&#25552;&#19979;&#65292;&#26681;&#25454;&#12298;&#20132;&#26131;&#27861;&#12299;&#31532;</FONT>13d-3<FONT STYLE="font-family: Times New Roman, Times, Serif">&#26465;&#30340;&#35268;&#23450;&#65292;&#26576;&#20154;&#65288;</FONT>&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#21463;&#25511;&#20154;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#24212;&#34987;&#35270;&#20026;&#30001;&#65288;</FONT>a<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#20219;&#20309;&#20854;&#20182;&#20154;&#65288;</FONT>&ldquo;
10<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65285;&#25152;&#26377;&#32773;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#65288;</FONT>i<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#23454;&#30410;&#25317;&#26377;&#65292;&#20351;&#35813;&#20154;&#26377;&#26435;&#25237;&#31080;&#36873;&#20986;&#21463;&#25511;&#20154;&#30340;&#33891;&#20107;&#25110;&#31561;&#25928;&#27835;&#29702;&#26426;&#26500;&#30340;&#31080;&#25968;&#30340;&#30334;&#20998;&#20043;&#21313;&#65288;</FONT>10<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65285;&#65289;&#25110;&#20197;&#19978;&#30340;&#35777;&#21048;&#65292;&#25110;&#65288;</FONT>ii<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#26377;&#26435;&#20998;&#37197;&#25110;&#33719;&#24471;&#30334;&#20998;&#20043;&#21313;&#65288;</FONT>10<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65285;&#65289;&#25110;&#20197;&#19978;&#30340;&#21033;&#28070;&#30340;&#35777;&#21048;&#65292;&#25511;&#21046;&#20154;&#30340;&#25439;&#22833;&#25110;&#20998;&#37197;&#65307;
&#65288;</FONT>b<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#21463;&#25511;&#20154;&#30340;&#39640;&#32423;&#32844;&#21592;&#65292;&#33891;&#20107;&#65292;&#26222;&#36890;&#21512;&#20249;&#20154;&#65292;&#21512;&#20249;&#20154;&#65288;&#26377;&#38480;&#21512;&#20249;&#20154;&#38500;&#22806;&#65289;&#65292;&#32463;&#29702;&#25110;&#25104;&#21592;&#65288;&#26080;&#31649;&#29702;&#26435;&#30340;&#25104;&#21592;&#65288;&#38750;</FONT>10<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65285;&#25152;&#26377;&#20154;&#65289;&#38500;&#22806;&#65289;&#65307;&#25110;&#65288;</FONT>c<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65289;&#19979;&#21015;&#20154;&#22763;&#30340;&#38468;&#23646;&#20844;&#21496;&#30340;&#37197;&#20598;&#65292;&#29238;&#27597;&#65292;&#30452;&#31995;&#21518;&#35028;&#65292;&#20804;&#24351;&#22992;&#22969;&#65292;&#23016;&#22920;&#65292;&#21460;&#21460;&#65292;&#20356;&#22899;&#65292;&#20356;&#23376;&#65292;&#23731;&#27597;&#65292;&#23731;&#29238;&#65292;&#23731;&#27597;&#25110;&#20804;&#24351;&#21463;&#25511;&#21046;&#20154;&#25110;&#20026;&#21463;&#25511;&#21046;&#20154;&#30340;&#20851;&#32852;&#20844;&#21496;&#30340;&#21033;&#30410;&#25110;&#21463;&#20854;&#25511;&#21046;&#30340;&#20154;&#30340;&#21463;&#25176;&#20154;&#30340;&#20449;&#25176;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<B><I>Governmental
Authority</I></B>&rdquo; means any federal, state, local, foreign or other governmental, quasi-governmental or administrative body,
instrumentality, department or agency or any court, tribunal, administrative hearing body, arbitration panel, commission, or other
similar dispute-resolving panel or body.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#25919;&#24220;&#26426;&#26500;</FONT>&rdquo;
<FONT STYLE="font-family: Times New Roman, Times, Serif">&#26159;&#25351;&#20219;&#20309;&#32852;&#37030;&#12289;&#24030;&#12289;&#22320;&#26041;&#12289;&#22806;&#22269;&#25110;&#20854;&#20182;&#25919;&#24220;&#12289;&#20934;&#25919;&#24220;&#25110;&#34892;&#25919;&#26426;&#26500;&#12289;&#26426;&#26500;&#12289;&#37096;&#38376;&#25110;&#26426;&#26500;&#12289;&#25110;&#20219;&#20309;&#27861;&#38498;&#12289;&#27861;&#24237;&#12289;&#34892;&#25919;&#21548;&#35777;&#26426;&#26500;&#12289;&#20210;&#35009;&#23567;&#32452;&#12289;&#22996;&#21592;&#20250;&#25110;&#20854;&#20182;&#31867;&#20284;&#30340;&#20105;&#31471;&#35299;&#20915;
&#38754;&#26495;&#25110;&#20027;&#20307;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<B><I>Law</I></B>&rdquo;
means any federal, state, local, municipal, foreign or other law, statute, legislation, principle of common law, ordinance, code,
edict, decree, proclamation, treaty, convention, rule, regulation, directive, requirement, writ, injunction, settlement, Order
or Consent that is or has been issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into
effect by or under the authority of any Governmental Authority.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#27861;&#24459;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#26159;&#25351;&#20219;&#20309;&#32852;&#37030;&#12289;&#24030;&#12289;&#22320;&#26041;&#12289;&#24066;&#32423;&#12289;&#22806;&#22269;&#25110;&#20854;&#20182;&#27861;&#24459;&#12289;&#27861;&#35268;&#12289;&#31435;&#27861;&#12289;&#26222;&#36890;&#27861;&#21407;&#21017;&#12289;&#27861;&#20196;&#12289;&#27861;&#35268;&#12289;&#27861;&#20196;&#12289;&#20844;&#21578;&#12289;&#26465;&#32422;&#12289;&#20844;&#32422;&#12289;&#35268;&#21017;&#12289;&#27861;&#35268;&#12289;&#25351;&#20196;&#12289;&#35201;&#27714;&#12289;&#21629;&#20196;
&#25110;&#22312;&#20219;&#20309;&#25919;&#24220;&#26426;&#26500;&#30340;&#25480;&#26435;&#19979;&#24050;&#32463;&#25110;&#24050;&#32463;&#39041;&#24067;&#36890;&#36807;&#12289;&#25209;&#20934;&#12289;&#39041;&#24067;&#12289;&#23454;&#26045;&#25110;&#20197;&#20854;&#20182;&#26041;&#24335;&#29983;&#25928;&#30340;&#31105;&#27490;&#20196;&#12289;&#35299;&#20915;&#26041;&#26696;&#12289;&#21629;&#20196;&#25110;&#21516;&#24847;&#20070;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<B><I>Liabilities</I></B>&rdquo;
means any and all liabilities, indebtedness, Actions or obligations of any nature (whether absolute, accrued, contingent or otherwise,
whether known or unknown, whether direct or indirect, whether matured or unmatured and whether due or to become due), including
tax liabilities due or to become due.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#36127;&#20538;</FONT>&rdquo;
<FONT STYLE="font-family: Times New Roman, Times, Serif">&#26159;&#25351;&#20219;&#20309;&#24615;&#36136;&#30340;&#20219;&#20309;&#21644;&#25152;&#26377;&#36127;&#20538;&#65292;&#20538;&#21153;&#65292;&#35785;&#35772;&#25110;&#20041;&#21153;&#65288;&#26080;&#35770;&#26159;&#32477;&#23545;&#30340;&#65292;&#24212;&#35745;&#30340;&#65292;&#25110;&#26377;&#30340;&#25110;&#20854;&#20182;&#30340;&#65292;&#26080;&#35770;&#26159;&#24050;&#30693;&#30340;&#36824;&#26159;&#26410;&#30693;&#30340;&#65292;&#26080;&#35770;&#26159;&#30452;&#25509;&#30340;&#36824;&#26159;&#38388;&#25509;&#30340;&#65292;&#26080;&#35770;&#26159;&#25104;&#29087;&#30340;&#36824;&#26159;&#26410;&#21040;&#26399;&#30340;&#65292;&#20197;&#21450;&#21040;&#26399;&#25110;&#21040;&#26399;&#30340;&#65289;&#65292;
&#21253;&#25324;&#21040;&#26399;&#25110;&#23558;&#35201;&#21040;&#26399;&#30340;&#31246;&#25910;&#36127;&#20538;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<B><I>Lien</I></B>&rdquo;
means any mortgage, pledge, security interest, attachment, right of first refusal, option, proxy, voting trust, encumbrance, lien
or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof), restriction
(whether on voting, sale, transfer, disposition or otherwise), any subordination arrangement in favor of another Person, any filing
or agreement to file a financing statement as debtor under the Uniform Commercial Code or any similar Law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#20538;&#21153;</FONT>&rdquo;
<FONT STYLE="font-family: Times New Roman, Times, Serif">&#26159;&#25351;&#20219;&#20309;&#24615;&#36136;&#30340;&#20219;&#20309;&#21644;&#25152;&#26377;&#20538;&#21153;&#12289;&#35785;&#35772;&#25110;&#20041;&#21153;&#65288;&#26080;&#35770;&#26159;&#32477;&#23545;&#30340;&#65292;&#24212;&#35745;&#30340;&#65292;&#25110;&#26377;&#30340;&#25110;&#20854;&#20182;&#30340;&#65292;&#26080;&#35770;&#26159;&#24050;&#30693;&#30340;&#36824;&#26159;&#26410;&#30693;&#30340;&#65292;&#26080;&#35770;&#26159;&#30452;&#25509;&#30340;&#36824;&#26159;&#38388;&#25509;&#30340;&#65292;&#26080;&#35770;&#26159;&#21040;&#26399;&#30340;&#36824;&#26159;&#26410;&#36807;&#26399;&#30340;&#65292;&#20197;&#21450;&#36807;&#26399;&#30340;&#65289;&#65292;&#21253;&#25324;&#32456;&#27490;&#25110;&#23558;&#35201;&#32456;&#27490;&#30340;&#34917;&#20607;&#20538;&#21153;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<B><I>Order</I></B>&rdquo;
means any order, decree, ruling, judgment, injunction, writ, determination, binding decision, verdict, judicial award or other
action that is or has been made, entered, rendered, or otherwise put into effect by or under the authority of any Governmental
Authority.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#21629;&#20196;</FONT>&rdquo;
<FONT STYLE="font-family: Times New Roman, Times, Serif">&#26159;&#25351;&#30001;&#26435;&#23041;&#26426;&#26500;&#25110;&#22312;&#20854;&#25480;&#26435;&#19979;&#24050;&#32463;&#25110;&#24050;&#32463;&#20316;&#20986;&#25110;&#20197;&#20854;&#20182;&#26041;&#24335;&#23454;&#26045;&#30340;&#20219;&#20309;&#21629;&#20196;&#12289;&#27861;&#20196;&#12289;&#35009;&#20915;&#12289;&#21028;&#20915;&#12289;&#31105;&#20196;&#12289;&#20196;&#29366;&#12289;&#35009;&#20915;&#12289;&#26377;&#32422;&#26463;&#21147;&#30340;&#20915;&#23450;&#12289;&#21028;&#20915;&#12289;&#21496;&#27861;&#35009;&#20915;&#25110;&#20854;&#20182;&#34892;&#21160;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<B><I>Organizational
Documents</I></B>&rdquo; means, with respect to the Purchaser, the Purchaser Charter, and with respect to any other Party, its
Certificate of Incorporation and Bylaws or similar organizational documents, in each case, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#23545;&#20110;&#20080;&#26041;&#32780;&#35328;&#65292;</FONT>&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#32452;&#32455;&#25991;&#20214;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#25351;&#30340;&#26159;&#20080;&#26041;&#31456;&#31243;&#65292;&#23545;&#20110;&#20219;&#20309;&#20854;&#20182;&#26041;&#32780;&#35328;&#65292;&#20998;&#21035;&#25351;&#32463;&#20462;&#35746;&#30340;&#20844;&#21496;&#27880;&#20876;&#35777;&#20070;&#21644;&#31456;&#31243;&#25110;&#31867;&#20284;&#30340;&#32452;&#32455;&#25991;&#20214;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<B><I>Person</I></B>&rdquo;
means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership),
limited liability company, association, trust or other entity or organization, including a government, domestic or foreign, or
political subdivision thereof, or an agency or instrumentality thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#20154;&#21592;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#26159;&#25351;&#20010;&#20154;&#65292;&#20844;&#21496;&#65292;&#21512;&#20249;&#20225;&#19994;&#65288;&#21253;&#25324;&#26222;&#36890;&#21512;&#20249;&#20225;&#19994;&#65292;&#26377;&#38480;&#21512;&#20249;&#20225;&#19994;&#25110;&#26377;&#38480;&#36131;&#20219;&#21512;&#20249;&#20225;&#19994;&#65289;&#65292;&#26377;&#38480;&#36131;&#20219;&#20844;&#21496;&#65292;&#21327;&#20250;&#65292;&#20449;&#25176;&#25110;&#20854;&#20182;&#23454;&#20307;&#25110;&#32452;&#32455;&#65292;&#21253;&#25324;&#20854;&#25919;&#24220;&#65292;&#22269;&#20869;&#25110;&#22269;&#22806;&#26426;&#26500;&#25110;&#20854;&#25919;&#27835;&#20998;&#25903;&#26426;&#26500;&#65292;
&#25110;&#20854;&#20195;&#29702;&#26426;&#26500;&#25110;&#24037;&#20855;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&ldquo;<B><I>Representative</I></B>&rdquo;
means, as to any Person, such Person&rsquo;s Affiliates and its and their managers, directors, officers, employees, agents and
advisors (including financial advisors, counsel and accountants).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#23545;&#20110;&#20219;&#20309;&#26041;&#65292;</FONT>&ldquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#20195;&#34920;</FONT>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif">&#26159;&#25351;&#35813;&#20154;&#30340;&#20851;&#32852;&#20844;&#21496;&#21450;&#20854;&#32463;&#29702;&#12289;&#33891;&#20107;&#12289;&#39640;&#32423;&#32844;&#21592;&#12289;&#38599;&#21592;&#12289;&#20195;&#29702;&#21830;&#21644;&#39038;&#38382;&#65288;&#21253;&#25324;&#36130;&#21153;&#39038;&#38382;&#65292;&#39038;&#38382;&#21644;&#20250;&#35745;&#24072;&#65289;&#12290;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK; SIGNATURE PAGE FOLLOWS]</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">[<FONT STYLE="font-family: Times New Roman, Times, Serif">&#39029;&#30340;&#20313;&#19979;&#37096;&#20998;&#20026;&#31354;&#30333;&#65307;
&#31614;&#21517;&#39029;&#38468;&#21518;</FONT>]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">IN WITNESS WHEREOF,
each Party hereto has caused this Agreement to be signed and delivered by its respective duly authorized officer as of the date
first written above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&#35880;&#20197;&#27492;&#20026;&#35777;&#65292;&#21508;&#24403;&#20107;&#26041;&#24050;&#20419;&#20351;&#26412;&#21327;&#35758;&#30001;&#20854;&#21508;&#33258;&#30340;&#27491;&#24335;&#25480;&#26435;&#23448;&#21592;&#22312;&#19978;&#36848;&#26085;&#26399;&#20043;&#26085;&#36215;&#31614;&#32626;&#24182;&#20132;&#20184;&#12290;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt"><I><U>The Purchaser: <FONT STYLE="font-family: Times New Roman, Times, Serif">&#20080;&#26041;</FONT></U></I></FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Beijing Fenjin Times Technology Development Co., Ltd.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#21271;&#20140;&#22859;&#36827;&#26102;&#20195;&#31185;&#25216;&#21457;&#23637;&#26377;&#38480;&#20844;&#21496;</P></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%"><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD STYLE="width: 30%; border-bottom: black 1.5pt solid">/s/ Yang Cao</TD>
    <TD STYLE="width: 66%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Name: Yang Cao</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Title: Legal Representative</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt"><I><U>The Seller:<FONT STYLE="font-family: Times New Roman, Times, Serif">&#21334;&#26041;</FONT></U></I></FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Lianluo Smart Limited </B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&#32852;&#32476;&#26234;&#33021;&#26377;&#38480;&#20844;&#21496;</B></P></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid">/s/ Bin Lin</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Name: Bin Lin</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Title: Chief Executive Officer</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt"><I><U>The Company:<FONT STYLE="font-family: Times New Roman, Times, Serif">&#20844;&#21496;</FONT></U></I></FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Lianluo Connection Medical Wearable Device Technology (Beijing)
        Co., Ltd.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&#32852;&#32476;&#21307;&#30103;&#21487;&#31359;&#25140;&#35774;&#22791;&#25216;&#26415;&#65288;&#21271;&#20140;&#65289;&#26377;&#38480;&#20844;&#21496;</B></P></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid">/s/ Ping Chen</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Name: Ping Chen</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Title: Legal Representative</FONT></TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><FONT STYLE="font-size: 10pt"><B><A NAME="annexf_001"></A>Annex F</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Sans-Serif; font-size: 9pt; color: Red"><IMG SRC="image-exf.jpg" ALT=""></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">October 23, 2020</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><U>STRICTLY CONFIDENTIAL</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">The Board of Directors</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Lianluo Smart Limited</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Room 611, 6th Floor, BeiKong Technology
Building, No. 10 Baifuquan Road,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Changping District, Beijing, 102200</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">People&rsquo;s Republic of China</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">To the Board of Directors:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">We understand that
Lianluo Smart Limited (the &ldquo;Company&rdquo;) is considering a transaction pursuant to which the Company, subject to the terms
and conditions of the Equity Transfer Agreement (the &ldquo;Agreement&rdquo;) entered into by and among Lianluo Connection Medical
Wearable Device Technology (Beijing) Co., Ltd. (&ldquo;Connection Medical&rdquo;), Beijing Fenjin Times Technology Development
Co., Ltd. (the &ldquo;Purchaser&rdquo;), and Lianluo Smart Limited, a BVI business company (&ldquo;LLIT&rdquo; or the &ldquo;Company&rdquo;),
the Company desires to transfer to the Purchaser, and the Purchaser desires to purchase from the Seller, 100% of the equity ownership
and all relevant rights and interests of Connection Medical (the &ldquo;Equity Interests&rdquo;) from the Company (the &ldquo;Transaction&rdquo;)
to the Purchaser for a transfer price of RMB 0 (the &ldquo;Transaction&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The board of directors
of the Company (the &ldquo;Board&rdquo;) has requested that The Benchmark Company, LLC (&ldquo;Benchmark&rdquo;) provide a written
opinion (the &ldquo;Opinion&rdquo;) to the Board as to whether the consideration to be received by the Company in the Transaction
is fair to the Company&rsquo;s shareholders from a financial point of view.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">In exchange for our
services in rendering this Opinion, the Company has agreed to pay a fee to Benchmark, which is not contingent upon either the conclusion
expressed herein or the consummation of the Transaction. The Company has also agreed to indemnify us against certain potential
liabilities in connection with our services in rendering this Opinion and to reimburse us for certain of our expenses incurred
in connection with our engagement with the Company. We may seek to provide other financial advisory or investment banking services
to the Company and/or its affiliates and other participants in the Transaction in the future for which we may receive compensation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">This Opinion is addressed
to, and is intended for the use, information and benefit of the Board (solely in its capacity as such) and may not be used for
any other purpose without our prior written consent. This Opinion is not intended to be, and does not constitute, a recommendation
to the Board, any security holder or any other party as to how to act or vote with respect to any matter relating to the Transaction
or otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>The Benchmark Company, LLC - Member FINRA,
SIPC</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>150 East 58<SUP>th</SUP> Street, 17<SUP>th</SUP>
Floor, New York, NY 10155 - Tel: 212-312-6700</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">We have not been requested
to opine as to, and this Opinion does not express an opinion as to or otherwise address, among other things: (1) the underlying
business decision of the Board, the Company, its security holders or any other party to proceed with or effect the Transaction,
(ii) the terms of any arrangements, understandings, agreements or documents related to, or the form, structure or any other portion
or aspect of, the Transaction or otherwise (other than the consideration to the extent expressly specified herein), (iii) the fairness
of any portion or aspect of the Transaction to the holders of any class of securities, creditors or other constituencies of the
Company, or to any other party, except if and only to the extent expressly set forth in the last sentence of this Opinion, (iv)
the relative merits of the Transaction as compared to any alternative business strategies or transactions that might be available
for the Company, Connection Medical or any other party, (v) the fairness of any portion or aspect of the Transaction to any one
class or group of the Company&rsquo;s or any other party&rsquo;s security holders or other constituents vis-&agrave;-vis any other
class or group of the Company&rsquo;s or such other party&rsquo;s security holders or other constituents (including, without limitation,
the allocation of any consideration amongst or within such classes or groups of security holders or other constituents), (vi) the
solvency, creditworthiness or fair value of Connection Medical, the Company or any other participant in the Transaction, or any
of their respective assets, under any applicable laws relating to bankruptcy, insolvency, fraudulent conveyance or similar matters,
or (vii) the fairness, financial or otherwise, of the amount, nature or any other aspect of any compensation to or consideration
payable to or received by any officers, directors or employees of any party to the Transaction, any class of such persons or any
other party, relative to the consideration or otherwise. Furthermore, no opinion, counsel or interpretation is intended in matters
that require legal, regulatory, accounting, insurance, tax or other similar professional advice. It is assumed that such opinions,
counsel or interpretations have been or will be obtained from the appropriate professional sources. Furthermore, we have relied,
with the consent of the Board, on the assessments by the Board, the Company and its advisors, as to all legal, regulatory, accounting,
insurance and tax matters with respect to Connection Medical, the Company, the Transaction or otherwise. The issuance of this Opinion
was approved by a committee authorized to approve opinions of this nature.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">In arriving at this
Opinion, we reviewed and considered such financial and other matters as we deemed relevant, including, among other things:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9632;</FONT></TD><TD STYLE="text-align: left">the latest draft of the Agreement provided to us on October 16, 2020;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9632;</FONT></TD><TD STYLE="text-align: left">certain information relating to the historical, current and future operations, financial condition
and prospects of Connection Medical, made available to us by the Company, including financial statements that included the actual
income statements for the year ending 12/31/2019 and the 9 months ending 9/30/2020, a balance sheet as of 9/30/2020, and a financial
model with projected income statements and balance sheets for the calendar years 2020-2023;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9632;</FONT></TD><TD STYLE="text-align: left">discussions with certain members of the management of the Company and certain of its advisors and
representatives regarding the business, operations, financial condition and prospects of the Company, the Transaction and related
matters;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9632;</FONT></TD><TD STYLE="text-align: left">a certificate addressed to us from senior management of the Company which contains, among other
things, representations regarding the accuracy of the information, data and other materials (financial or otherwise) provided to,
or discussed with, us by or on behalf of the Company;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9632;</FONT></TD><TD STYLE="text-align: left">the current and historical market prices for certain of the Company&rsquo;s publicly traded securities,
and the current and historical market prices, trading characteristics and financial performance of the publicly traded securities
of certain other companies that we deemed to be relevant;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9632;</FONT></TD><TD STYLE="text-align: left">the publicly available financial terms of certain transactions that we deemed to be relevant; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#9632;</FONT></TD><TD STYLE="text-align: left">such other information, economic and market criteria and data, financial studies, analyses and
investigations and such other factors as Benchmark deemed relevant.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">We have relied upon
and assumed, without independent verification, the accuracy and completeness of all data, material and other information furnished,
or otherwise made available, to us, discussed with or reviewed by us, or publicly available, and do not assume any responsibility
with respect to such data, material and other information. In addition, management of the Company has advised us, and we have assumed,
that the financial projections reviewed by us have been reasonably prepared in good faith on bases reflecting the best currently
available estimates and judgments of such management as to the future financial results and condition of the Company or Connection
Medical and we express no opinion with respect to such projections or the assumptions on which they are based. We have relied upon
and assumed, without independent verification, that there has been no change in the business, assets, liabilities, financial condition,
results of operations, cash flows or prospects of the Company or Connection Medical since the respective dates of the most recent
financial statements and other information, financial or otherwise, provided to us that would be material to our analyses or this
Opinion, and that there is no information or any facts that would make any of the information reviewed by us incomplete or misleading.
Benchmark has further relied upon the assurance of the management of the Company that they are unaware of any facts that would
make the information provided to Benchmark incomplete or misleading in any material respect. In connection with its review and
arriving at this Opinion, Benchmark did not assume any responsibility for the independent verification of any of the foregoing
information and relied on the completeness and accuracy as represented by the Company. In addition, we have relied upon and assumed,
without independent verification, that the final form of the Agreement will not differ in any material respect from the latest
draft of the Agreement provided to us as identified above. In addition, Benchmark did not make any independent evaluation or appraisal
of the assets or liabilities of the Company or Connection Medical nor was Benchmark furnished with any such independent evaluations
or appraisals. This Opinion is necessarily based upon financial, economic, market and other conditions as they existed on, and
should be evaluated as of, the date hereof. Although subsequent developments might affect this Opinion, Benchmark does not have
any obligation to update, revise or reaffirm this Opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Benchmark has assumed
that the Transaction will be consummated on terms substantially similar to those set forth in the Agreement identified above. Furthermore,
the Company represented to Benchmark that the Transaction was negotiated by the parties on an arm&rsquo;s length basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">We have not been requested
to, and did not, (a) initiate or participate in any discussions or negotiations with, or solicit any indications of interest from,
third parties with respect to the Transaction, the securities, assets, businesses or operations of the Company or Connection Medical
or any other party, or any alternatives to the Transaction, (b) negotiate the terms of the Transaction, or (c) advise the Board
or any other party with respect to alternatives to the Transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">In the ordinary course
of our business, Benchmark may have actively traded the equity or debt securities of the Company and may continue to actively trade
such equity or debt securities. In addition, certain individuals who are employees of, or are affiliated with, Benchmark may have
in the past and may currently be stockholders of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Based upon and subject
to the foregoing, and in reliance thereon, it is our opinion that, as of the date hereof, the consideration to be received by
the Company in the Transaction pursuant to the Agreement is fair to the Company&rsquo;s shareholders from a financial point of
view.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Very truly yours,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">THE BENCHMARK COMPANY, LLC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 6%; text-align: left"><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 34%; text-align: left">/<FONT STYLE="font-size: 10pt">s/ John J. Borer III</FONT></TD>
    <TD STYLE="width: 60%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Name:</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">John J. Borer III</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Title:</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Senior Managing Director &amp; Co-Head of Investment Banking</FONT></TD>
    <TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="text-align: right; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><A NAME="annexg_001"></A>Annex G</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>BVI
COMPANY NUMBER: 553525 </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>TERRITORY
OF THE BRITISH VIRGIN ISLANDS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>THE
BVI BUSINESS COMPANIES ACT, 2004</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>AMENDED
AND RESTATED</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>MEMORANDUM
AND ARTICLES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>OF
ASSOCIATION</B></FONT></P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>OF
</B></FONT></P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Newegg
Commerce, Inc. </B></FONT></P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>A
COMPANY LIMITED BY SHARES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Incorporated
on the 22nd day of July, 2003</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(Re-registered
under the BVI Business Companies Act, 2004 on 1st January, 2007)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>INCORPORATED
IN THE BRITISH VIRGIN ISLANDS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(As
adopted by Director&rsquo;s resolutions dated 16 June, 2017 and filed on 26 June, 2017)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(As
further amended by Director&rsquo;s resolutions dated 24 December, 2019 and filed on 31 December, 2019)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(As
further amended by Director&rsquo;s resolutions dated 20 February, 2020 and filed on 21 February, 2020)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(As
further amended by Shareholder&rsquo;s resolutions dated 8 April, 2020 and filed on 15 April 2020)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(As
further amended by Director&rsquo;s resolutions dated 15 October 2020 and filed on 21 October 2020)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(As
further amended by Shareholders&rsquo; resolutions dated [&nbsp;&nbsp;] 2020 and filed on [&nbsp;&nbsp;] 2020)<BR STYLE="clear: both"></FONT></P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">TERRITORY
OF THE BRITISH VIRGIN ISLANDS</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">THE
BVI BUSINESS COMPANIES ACT, 2004</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>AMENDED
AND RESTATED</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>MEMORANDUM
OF ASSOCIATION</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>OF</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Newegg
Commerce, Inc.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 2.45pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
COMPANY LIMITED BY SHARES</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>1.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>DEFINITIONS
                                         AND INTERPRETATION</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
                                         this Memorandum of Association and the attached Articles of Association, if not inconsistent
                                         with the subject or context:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Act</B>&rdquo;
means the BVI Business Companies Act, 2004 (No. 16 of 2004) and includes the regulations made under the Act;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Affiliate</B>&rdquo;
means, with respect to any specified Person, any other Person that, at the time of determination, directly or indirectly through
one or more intermediaries, Controls, is Controlled by, or is under common Control with, such specified Person; provided that
no Shareholder shall be deemed an Affiliate of any other Shareholder solely by reason of their investment in the Company;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Affiliate
Transactions</B>&rdquo; means any transaction or a series of related transactions on behalf of the Company or its Subsidiaries,
on the one hand, and any Principal Shareholder, director or officer of the Company or its Subsidiaries, any spouse, parent, brother,
sister, first cousin, first aunt, first uncle, first niece, first nephew or child (in each case whether by law or blood relation)
of any of the foregoing, or any Affiliate of any of the foregoing, on the other hand, other than with respect to customary arrangements
relating to the employment by the Company and/or its Subsidiaries on arm&rsquo;s-length terms of any such Person who possesses
market standard qualifications;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Articles</B>&rdquo;
means the attached Articles of Association of the Company;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Board</B>&rdquo;
means the board of Directors of the Company or the Directors present at a duly convened meeting of the Directors at which a Board
Quorum is present;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Board
Quorum</B>&rdquo; has the meaning given to that term in Article 10.5;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>business
day</B>&rdquo; means a weekday on which banks are generally open for business in the British Virgin Islands;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>clear
days</B>&rdquo; in relation to the period of a notice means that period excluding the day when the notice is given or deemed to
be given and the day for which it is given or on which it is to take effect;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Common
Shares</B>&rdquo; or &ldquo;<B>Shares</B>&rdquo; means common shares of a nominal or par value of US$[&nbsp;&nbsp;] each issued or to be
issued by the Company;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Company
Sale</B>&rdquo; means a bona fide negotiated transaction, to (i) Transfer, exclusively lease or license, or otherwise dispose
of all or substantially all of the assets of the Company and its Subsidiaries on a consolidated basis to any Person, in a single
transaction or series of related transactions; (ii)&nbsp;Transfer Shares or other Equity Interests of the Company to any Person
constituting 100% of the then issued and outstanding voting Shares or other Equity Interests of the Company, in a single transaction
or series of related transactions; or (iii) merge, consolidate, recapitalize or reorganize the Company with or into any Person
whereby the Shareholders immediately prior to such transaction no longer constitute holders of a majority of the economic interests
of the common (or equivalent) equity immediately after such transaction;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Control</B>&rdquo;
or &ldquo;<B>Controlled</B>&rdquo; means, as for any Person, the possession, directly or indirectly of the power to direct or
cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract
or otherwise;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Directors</B>&rdquo;
mean those persons holding office as directors of the Company from time to time;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Distribution</B>&rdquo;
in relation to a distribution by the Company to a Shareholder means the direct or indirect transfer of an asset, other than Shares,
to or for the benefit of the Shareholder, or the incurring of a debt to or for the benefit of a Shareholder, in relation to Shares
held by a Shareholder, and whether by means of the purchase of an asset, the purchase, redemption or other acquisition of Shares,
a transfer of indebtedness or otherwise, and includes a dividend;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>electronic</B>&rdquo;
means actuated by electric, magnetic, electro-magnetic, electro-chemical or electro-mechanical energy and &ldquo;<B>by electronic
means</B>&rdquo; means by any manner capable of being so actuated and shall include e-mail and/or other data transmission service;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Equity
Interests</B>&rdquo; means any shares or capital stock of or other type of equity interest in a Person, including any restricted
shares, warrants, options or other securities to purchase shares or capital stock or other types of equity interests;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Exchange
Act</B>&rdquo; means the U.S. Securities Exchange Act of 1934, as amended;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Excluded
Issuance</B>&rdquo; means (i) any Equity Interests issued as share dividends, or pursuant to share splits, recapitalization or
other similar events that do not adversely affect the proportionate amount of the Shares held by the Principal Shareholders, and
(ii) Shares issuable to officers, employees, Directors, managers or independent contractors of the Company or any of its Subsidiaries
pursuant to warrants, options, notes or other rights to acquire Shares of the Company issued pursuant to any stock option or any
similar equity incentive plan of the Company approved by the Board;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>executed</B>&rdquo;
includes any mode of execution;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>held</B>&rdquo;
means, in relation to Shares, the Shares entered in the Register of Members as being held by a member and term &ldquo;<B>holds</B>&rdquo;
and &ldquo;<B>holder</B>&rdquo; shall be construed accordingly;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Legacy
Shareholders</B>&rdquo; means any Persons set forth in <U>Exhibit A</U> attached hereto who receive Shares issued by the Company
as consideration for the acquisition of Newegg Inc., a Delaware company, together with any Affiliates of such Person who are Transferred
such Shares;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Liaison</B>&rdquo;
means Digital Grid (Hong Kong) Technology Co., Limited, a company incorporated under the laws of Hong Kong;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Memorandum</B>&rdquo;
means this Memorandum of Association of the Company;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Minority
Representative</B>&rdquo; means the Person selected by the Legacy Shareholders from time to time in accordance with Article 10.9;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>month</B>&rdquo;
means a calendar month;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>paid
up</B>&rdquo; means paid up or credited as paid up and includes any sum paid by way of premium;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Person</B>&rdquo;
means individuals, corporations, trusts, the estates of deceased individuals, partnerships, limited liability companies, unincorporated
associations of persons and other legal entities;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>present
in person</B>&rdquo; means, in the case of an individual, that individual or his lawfully appointed attorney being present in
person and, in the case of a corporation, being present by duly authorized representative or lawfully appointed attorney and,
in relation to meetings, &ldquo;<B>in person</B>&rdquo; shall be construed accordingly;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Primary
Minority Board Appointee&rdquo;</B> has the meaning given to that term in Article 8.1(iv).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Principal
Shareholders</B>&rdquo; means Liaison and the Legacy Shareholders;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>public
disclosure</B>&rdquo; means any disclosure in a press release issued or disseminated in a manner designated to provide broad,
non-exclusionary distribution of the information to the public or in a document publicly filed or furnished by the Company with
the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act or in a registration statement
under the Securities Act;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Register
of Members</B>&rdquo; has the meaning given to that term in Article 2.6;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Registrar</B>&rdquo;
means the Registrar of Corporate Affairs appointed under section 229 of the Act;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Reorganization</B>&rdquo;
means any recapitalization, corporate reorganization, &ldquo;corporate inversion&rdquo; involving the creation of one or more
holding companies and/or holding company subsidiaries, or similar transaction;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Reserved
Matters&rdquo;</B> has the meaning given to that term in Article 9.10;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Resolution
of Directors</B>&rdquo; means either:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -26.9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                         resolution approved at a duly convened and constituted meeting of Directors or of a committee
                                         of Directors by the affirmative vote of a majority of the Directors present at the meeting
                                         who voted except that where a Director is given more than one vote, he shall be counted
                                         by the number of votes he casts for the purpose of establishing a majority; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -26.9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                         resolution consented to in writing by all Directors or by all members of a committee
                                         of Directors of the Company, as the case may be;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Resolution
of Shareholders</B>&rdquo; means either:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -26.9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                         resolution approved at a duly convened and constituted meeting of the Shareholders of
                                         the Company by the affirmative vote of a majority of the votes of the Shares entitled
                                         to vote thereon in respect of which the Shareholders holding the Shares were present
                                         at the meeting in person or by proxy and being Shares in respect of which the votes were
                                         voted; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -26.9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                         resolution consented to in writing by Shareholders representing a majority of the votes
                                         of the Shares entitled to vote thereon;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Seal</B>&rdquo;
means any seal which has been duly adopted as the common seal of the Company;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Securities</B>&rdquo;
means Shares and debt obligations of every kind of the Company, and including without limitation options, warrants and rights
to acquire Shares or debt obligations;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Securities
Act</B>&rdquo; means the U.S. Securities Act of 1933, as amended from time to time;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Securities
and Exchange Commission</B>&rdquo; means the United States Securities and Exchange Commission;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Shareholder</B>&rdquo;
means a Person whose name is entered in the Register of Members as the holder of one or more Shares or fractional Shares;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Subsidiary</B>&rdquo;
means any of which the Company (either alone or through or together with any other Subsidiary), owns, directly or indirectly,
(i) 50% or more of the stock or other Equity Interests the holders of which are generally entitled to elect the board of directors
or other governing body of such or (ii) if there are no such voting interests, 50% or more of the Equity Interests in such corporation,
partnership, limited liability company, joint venture, trust, association or other entity.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>Transfer</B>&rdquo;
means any direct or indirect sale, bequest, exchange, assignment, gift, transfer, pledge, creation of any security interest or
other encumbrance, and any other disposition of any kind (whether with or without consideration and whether voluntary or involuntary
or by operation of Law) affecting title to or possession of any Shares;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&ldquo;Treasury
Share&rdquo;</B> means a Share that was previously issued but was repurchased, redeemed or otherwise acquired by the Company and
not cancelled;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>written</B>&rdquo;
or any term of like import includes information generated, sent, received or stored by electronic, electrical, digital, magnetic,
optical, electromagnetic, biometric or photonic means, including electronic data interchange, electronic mail, telegram, telex
or telecopy, and</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;<B>in
writing</B>&rdquo; shall be construed accordingly.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
                                         the Memorandum and the Articles, unless the context otherwise requires a reference to:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">an
                                         &ldquo;<B>Article</B>&rdquo; is a reference to an article of the Articles;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                         &ldquo;<B>Clause</B>&rdquo; is a reference to a clause of the Memorandum;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">voting
                                         by Shareholders is a reference to the casting of the votes attached to the Shares held
                                         by the Shareholder voting;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         Act, the Memorandum or the Articles is a reference to the Act or those documents as amended
                                         or, in the case of the Act any re-enactment thereof; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(e)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         singular includes the plural and vice versa.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
                                         words or expressions defined in the Act unless the context otherwise requires bear the
                                         same meaning in the Memorandum and the Articles unless otherwise defined herein.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.4</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Headings
                                         are inserted for convenience only and shall be disregarded in interpreting the Memorandum
                                         and the Articles.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NAME
                                         </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
name of the Company is Newegg Commerce, Inc. The Company was incorporated on the 22nd day of July, 2003 pursuant to the International
Business Companies Act (Cap. 291) and immediately prior to its automatic re-registration under the BVI Business Companies Act,
it was governed by the International Business Companies Act.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>3.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>STATUS</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is a company limited by shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>4.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>REGISTERED
                                         OFFICE AND REGISTERED AGENT</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
                                         the date of filing of the notice disapplying Part IV of Schedule 2 of the Act, the registered
                                         office of the Company is at the offices of Offshore Incorporations Limited, of P. O.
                                         Box 957, Offshore Incorporations Center, Road Town, Tortola, British Virgin Islands,
                                         the office of the first registered agent.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
                                         the date of filing of the notice disapplying Part IV of Schedule 2 of the Act, the registered
                                         agent of the Company is Offshore Incorporations Limited, of P. O. Box 957, Offshore Incorporations
                                         Center, Road Town, Tortola, British Virgin Islands.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company may by Resolution of Shareholders or by Resolution of Directors change the location
                                         of its registered office or change its registered agent.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.4</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
                                         change of registered office or registered agent will take effect on the registration
                                         by the Registrar of a notice of the change filed by the existing registered agent or
                                         a legal practitioner in the British Virgin Islands acting on behalf of the Company.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>5.</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>CAPACITY
AND POWERS</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
                                         to the Act and any other British Virgin Islands legislation, the Company has, irrespective
                                         of corporate benefit:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">full
                                         capacity to carry on or undertake any business or activity, do any act or enter into
                                         any transaction; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">for
                                         the purposes of paragraph (a), full rights, powers and privileges.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
                                         the purposes of section 9(4) of the Act, there are no limitations on the business that
                                         the Company may carry on.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>6.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NUMBER
                                         AND CLASSES OF SHARES </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">6.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company is authorized to issue an unlimited number of Common Shares of a nominal or par
                                         value of US$[&nbsp;&nbsp;] each.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">6.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company may issue fractional Shares and a fractional Share shall have the corresponding
                                         fractional rights, obligations and liabilities of a whole Share of the same class or
                                         series of Shares.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">6.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shares
                                         may be issued in one or more series of Shares as the Directors may by Resolution of Directors
                                         determine from time to time.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">6.4</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company has the power to redeem or purchase any of its Shares and to increase or reduce
                                         the number of Shares it is authorized to issue subject to the provisions of the BVI Business
                                         Companies Act, 2004, as amended, and the Articles of Association and to issue any of
                                         its Shares, whether original, redeemed or increased with or without any preference, priority
                                         or special privilege or subject to any postponement of rights or to any conditions or
                                         restrictions and so that unless the conditions of issue shall otherwise expressly declare
                                         every issue of Shares whether declared to be preference or otherwise shall be subject
                                         to the powers hereinbefore contained.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>7.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>RIGHTS
                                         CONFERRED BY COMMON SHARES </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
                                         to the Articles, the terms of the issue of any share, or any Resolution of Members to
                                         the contrary (and, for greater clarity, without prejudice to any special rights conferred
                                         thereby on the holders of any other shares), each Common Share confers on its holder:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.1.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         right to one vote at a meeting of the Members or on any Resolution of Members;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.1.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         right to an equal share in any Distribution paid by the Company in accordance with the
                                         Act; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.1.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         right to an equal share in the distribution of the surplus assets of the Company on a
                                         winding-up.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>8.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>VARIATION
                                         OF RIGHTS</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
at any time the Shares are divided into different classes, the rights attached to any class may only be varied, whether or not
the Company is in liquidation, by a resolution passed at a meeting by a majority of the votes cast by those entitled to vote at
a meeting of the holders of the issued Shares in that class.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>9.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>RIGHTS
                                         NOT VARIED BY THE ISSUE OF SHARES PARI PASSU</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10pt; text-align: left; text-indent: -10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
rights conferred upon the holders of the Shares of any class shall not, unless otherwise expressly provided by the terms of issue
of the Shares of that class, be deemed to be varied by the creation or issue of further Shares ranking <I>pari passu</I> therewith.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>10.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>REGISTERED
                                         SHARES</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company shall issue registered Shares only.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company is not authorized to issue bearer Shares, convert registered Shares to bearer
                                         Shares or exchange registered Shares for bearer Shares.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>11.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>TRANSFER
                                         OF SHARES</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">11.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
                                         to the provisions of Articles 6.2 and 6.3 of the Articles, the Company shall, on receipt
                                         of an instrument of transfer complying with Article 6 of the Articles, enter the name
                                         of the transferee of a Share in the Register of Members unless the Directors resolve
                                         to refuse or delay the registration of the transfer for reasons that shall be specified
                                         in a Resolution of Directors.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">11.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Directors may not resolve to refuse or delay the transfer of a Share unless: (a) the
                                         Shareholder has failed to pay an amount due in respect of the Share; or (b) such refusal
                                         or delay is deemed necessary or advisable in the view of the Company or its legal counsel
                                         in order to avoid violation of, or in order to ensure compliance with, any applicable
                                         corporate, securities and other laws and regulation.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>12.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>AMENDMENT
                                         OF THE MEMORANDUM AND THE ARTICLES</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
                                         to Clause 8, and the provisions of Article 9.10, the Company may amend the Memorandum
                                         or the Articles by Resolution of Shareholders or by Resolution of Directors, save that
                                         no amendment may be made by Resolution of Directors:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         restrict the rights or powers of the Shareholders to amend the Memorandum or the Articles;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         change the percentage of Shareholders required to pass a Resolution of Shareholders to
                                         amend the Memorandum or the Articles;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">in
                                         circumstances where the Memorandum or the Articles cannot be amended by the Shareholders;
                                         or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         Clauses 7, 8, 9 or this Clause 12.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
                                         amendment of the Memorandum or the Articles will take effect on the registration by the
                                         Registrar of a notice of amendment, or restated Memorandum and Articles, filed by the
                                         registered agent.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We,
OFFSHORE INCORPORATIONS LIMITED of P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands for
the purpose of disapplying Part IV of Schedule 2 of the Act hereby sign this Memorandum of Association the 20th day of November,
2009.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Registered
Agent</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; border-bottom: Black 1.5pt solid; width: 40%; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; width: 60%; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sgd: Rexella D. Hodge</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Authorised Signatory</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">OFFSHORE INCORPORATIONS LIMITED</FONT></TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">TERRITORY
OF THE BRITISH VIRGIN ISLANDS</FONT></P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">THE
BVI BUSINESS COMPANIES ACT, 2004</FONT></P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>AMENDED
AND RESTATED</B></FONT></P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ARTICLES
OF ASSOCIATION</B></FONT></P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>OF</B></FONT></P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Newegg
Commerce, Inc.</B></FONT></P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
COMPANY LIMITED BY SHARES</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>1.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>REGISTERED
                                         SHARES</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Every
                                         Shareholder is entitled to a certificate signed by a Director or officer of the Company,
                                         or any other person authorized by Resolution of Directors, specifying the number of Shares
                                         held by him and the signature of the Director, officer or authorized person and the Seal
                                         may be facsimiles. A certificate may be issued in electronic form in accordance with
                                         the Electronic Transactions Act, 2001 as from time to time amended or re-enacted.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
                                         Shareholder receiving a certificate shall indemnify and hold the Company and its Directors
                                         and officers harmless from any loss or liability which it or they may incur by reason
                                         of any wrongful or fraudulent use or representation made by any person by virtue of the
                                         possession thereof. If a certificate for Shares is worn out or lost it may be renewed
                                         on production of the worn out certificate or on satisfactory proof of its loss together
                                         with such indemnity as may be required and determined under the Company&rsquo;s policy
                                         as set by Resolution of Directors.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
                                         several Persons are registered as joint holders of any Shares, any one of such Persons
                                         may give an effectual receipt for any Distribution.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>SHARES</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
                                         to the provisions of Article 9.10, Shares and other Securities may be issued at such
                                         times, to such Persons, for such consideration and on such terms as the Directors may
                                         by Resolution of Directors determine.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Section
                                         46 of the Act (<I>Pre-emptive Rights</I>) does not apply to the Company.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: left; text-indent: -40pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
                                         Share may be issued for consideration in any form, including money, a promissory note,
                                         or other written obligation to contribute money or property, real property, personal
                                         property (including goodwill and know-how), services rendered or a contract for future
                                         services.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.4</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         consideration for a Share with par value shall not be less than the par value of the
                                         Share. If a Share with par value is issued for consideration less than the par value,
                                         the person to whom the Share is issued is liable to pay to the Company an amount equal
                                         to the difference between the issue price and the par value.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: left; text-indent: -40pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.5</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">No
                                         Shares may be issued for a consideration other than money, unless a Resolution of Directors
                                         has been passed stating:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         amount to be credited for the issue of the Shares;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         determination of the Directors of the reasonable present cash value of the non-money
                                         consideration for the issue; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">that,
                                         in the opinion of the Directors, the present cash value of the non-money consideration
                                         for the issue is not less than the amount to be credited for the issue of the Shares.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.6</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company shall keep a register (the &ldquo;<B>Register of Members</B>&rdquo;) containing:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         names and addresses of the Persons who hold Shares;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         number of each class and series of Shares held by each Shareholder;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         date on which the name of each Shareholder was entered in the Register of Members;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         date on which any Person ceased to be a Shareholder; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36.5pt; text-indent: 20pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(e)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">such
                                         other information as may be prescribed by the Act.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.7</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Register of Members may be in any such form as the Directors may approve, but if it is
                                         in magnetic, electronic or other data storage form, the Company must be able to produce
                                         legible evidence of its contents. Until the Directors otherwise determine, the magnetic,
                                         electronic or other data storage form shall be the original Register of Members.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.8</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
                                         Share is deemed to be issued when the name of the Shareholder is entered in the Register
                                         of Members.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.9</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         entry of the name of a Person in the Register of Members as a holder of a Share is prima
                                         facie evidence that legal title in the Share vests in that Person.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.10</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">No
                                         share may be issued by the Company that:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">increases
                                         the liability of a person to the Company; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">imposes
                                         a new liability on a person to the Company,</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">unless
that person, or an authorized agent of that person, agrees in writing to becoming the holder of the share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.11</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Board may settle as it considers expedient any difficulty which arises in relation to
                                         any consolidation, combination and division of Shares and in particular but without prejudice
                                         to the generality of the foregoing may issue certificates in respect of fractions of
                                         Shares or arrange for the sale of the Shares representing fractions and the distribution
                                         of the net proceeds of sale (after deduction of the expenses of such sale) in due proportion
                                         amongst the Shareholders who would have been entitled to the fractions, and for this
                                         purpose the Board may authorize some persons to transfer the Shares representing fractions
                                         to their purchaser or resolve that such net proceeds be paid to the Company for the Company&rsquo;s
                                         benefit. Such purchaser will not be bound to see to the application of the purchase money
                                         nor will his title to the Shares be affected by any irregularity or invalidity in the
                                         proceedings relating to the sale.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>3.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>REDEMPTION
                                         OF SHARES AND TREASURY SHARES</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company may purchase, redeem or otherwise acquire and hold its own Shares save that the
                                         Company may not, except pursuant to Article 3.7, purchase, redeem or otherwise acquire
                                         its own Shares without the consent of Shareholders whose Shares are to be purchased,
                                         redeemed or otherwise acquired unless the Company is permitted by the Act or any other
                                         provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the
                                         Shares without their consent.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company may only offer to purchase, redeem or otherwise acquire Shares if the Resolution
                                         of Directors authorizing the purchase, redemption or other acquisition contains a statement
                                         that the Directors are satisfied, on reasonable grounds, that immediately after the acquisition
                                         the value of the Company&rsquo;s assets will exceed its liabilities and the Company will
                                         be able to pay its debts as they fall due.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sections
                                         60 (<I>Process for acquisition of own shares</I>), 61 (<I>Offer to one or more shareholders</I>)
                                         and 62 (<I>Shares redeemed otherwise than at the option of company</I>) of the Act shall
                                         not apply to the Company.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.4</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shares
                                         that the Company purchases, redeems or otherwise acquires pursuant to this Article may
                                         be cancelled or held as Treasury Shares except to the extent that such Shares are in
                                         excess of 50% of the issued Shares in which case they shall be cancelled to the extent
                                         of such excess but they shall be available for reissue.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.5</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
                                         rights and obligations attaching to a Treasury Share are suspended and shall not be exercised
                                         by the Company while it holds the Share as a Treasury Share.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.6</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Treasury
                                         Shares may be transferred by the Company on such terms and conditions (not otherwise
                                         inconsistent with the Memorandum and the Articles) as the Company may by Resolution of
                                         Directors determine.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.7</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Where:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         Company undertakes any division or combination of the issued Shares pursuant to section
                                         40A of the Act, and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">pursuant
                                         to such division or combination a Shareholder holds a total number of Shares which includes
                                         a fractional Share, the Company may compulsorily redeem such fractional Share so that
                                         (subsequent to such redemption) the Shareholder holds a whole number of Shares.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>4.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>MORTGAGES
                                         AND CHARGES OF SHARES</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shareholders
                                         may mortgage or charge their Shares.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
                                         shall be entered in the Register of Members at the written request of the Shareholder:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                         statement that the Shares held by him are mortgaged or charged;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         name of the mortgagee or chargee; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         date on which the particulars specified in subparagraphs (a) and (b) are entered in the
                                         Register of Members.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Where
                                         particulars of a mortgage or charge are entered in the Register of Members, such particulars
                                         may be cancelled:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">with
                                         the written consent of the named mortgagee or chargee or anyone authorized to act on
                                         his behalf; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">upon
                                         evidence satisfactory to the Directors of the discharge of the liability secured by the
                                         mortgage or charge and the issue of such indemnities as the Directors shall consider
                                         necessary or desirable.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.4</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Whilst
                                         particulars of a mortgage or charge over Shares are entered in the Register of Members
                                         pursuant to this Article:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">no
                                         transfer of any Share the subject of those particulars shall be effected;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         Company may not purchase, redeem or otherwise acquire any such Share; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">no
                                         replacement certificate shall be issued in respect of such Shares, without the written
                                         consent of the named mortgagee or chargee.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>5.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>FORFEITURE</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shares
                                         that are not fully paid on issue are subject to the forfeiture provisions set forth in
                                         this Article and for this purpose Shares issued for a promissory note, other written
                                         obligation to contribute money or property or a contract for future services are deemed
                                         to be not fully paid.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
                                         written notice of call specifying the date for payment to be made shall be served on
                                         the Shareholder who defaults in making payment in respect of the Shares.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         written notice of call referred to in Article 5.2 shall name a further date not earlier
                                         than the expiration of 14 days from the date of service of the notice on or before which
                                         the payment required by the notice is to be made and shall contain a statement that in
                                         the event of non-payment at or before the time named in the notice the Shares, or any
                                         of them, in respect of which payment is not made will be liable to be forfeited.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.4</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Where
                                         a written notice of call has been issued pursuant to Article 5.3 and the requirements
                                         of the notice have not been complied with, the Directors may, at any time before tender
                                         of payment, forfeit and cancel the Shares to which the notice relates.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.5</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company is under no obligation to refund any moneys to the Shareholder whose Shares have
                                         been cancelled pursuant to Article 5.4 and that Shareholder shall be discharged from
                                         any further obligation to the Company with respect to such cancelled Shares.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>6.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>TRANSFER
                                         AND TRANSMISSION OF SHARES</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">6.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shares
                                         may be transferred by a written instrument of transfer signed by the transferor and containing
                                         the name and address of the transferee, which shall be sent to the Company for registration.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">6.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         transfer of a Share is effective when the name of the transferee is entered on the Register
                                         of Members.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">6.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
                                         the Directors or a duly authorized committee of Directors of the Company are satisfied
                                         that an instrument of transfer relating to Shares has been signed but that the instrument
                                         has been lost or destroyed, they may resolve by Resolution of Directors:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         accept such evidence of the transfer of Shares as they consider appropriate; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">that
                                         the transferee&rsquo;s name should be entered in the Register of Members notwithstanding
                                         the absence of the instrument of transfer.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">6.4</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
                                         to the Memorandum, the personal representative of a deceased Shareholder may transfer
                                         a Share even though the personal representative is not a Shareholder at the time of the
                                         transfer.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>7.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>MEETINGS
                                         AND CONSENTS OF SHAREHOLDERS</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
                                         action that may be taken by the Shareholders at a meeting (other than the election of
                                         Directors) may also be taken by a Resolution of Shareholders consented to in writing,
                                         without the need for any notice, but if any Resolution of Shareholders is adopted otherwise
                                         than by the unanimous written consent of all Shareholders, a copy of such resolution
                                         shall forthwith be sent to all Shareholders not consenting to such resolution. The consent
                                         may be in the form of counterparts, each counterpart being signed by one or more Shareholders.
                                         If the consent is in one or more counterparts, and the counterparts bear different dates,
                                         then the resolution shall take effect on the earliest date upon which Shareholders holding
                                         a sufficient number of votes of Shares to constitute a Resolution of Shareholders have
                                         consented to the resolution by signed counterparts.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
                                         meetings of Shareholders (whether annual or special) shall be held on such dates and
                                         at such places as may be fixed from time to time by the Directors.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company shall not be required to hold an annual general meeting in any calendar year.
                                         Where so determined by the Directors, an annual general meeting of Shareholders shall
                                         be held once in each calendar year, for the purpose of conducting such business as may
                                         come before the meeting (the &ldquo;<B>annual meeting of Shareholders</B>&rdquo;) in
                                         accordance with the provisions of these Articles. Such annual general meeting (if any)
                                         shall be held at such date and time as may be determined by the Directors.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.4</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
                                         meeting of Shareholders other than an annual meeting of Shareholders which shall be held
                                         for the consideration of any business, including the election of Directors, shall hereinafter
                                         be referred to as a &ldquo;special meeting of Shareholders.&rdquo; A special meeting
                                         of Shareholders may be called by the Directors pursuant to a Resolution of Directors
                                         at such date, time and for the consideration of any business as may be determined by
                                         the Directors, save that upon the written request of Shareholders holding at least 30
                                         percent of the votes of the outstanding voting Shares in the Company, the Directors shall
                                         convene a special meeting of Shareholders in respect of the matter for which the meeting
                                         is requested. If a special meeting of Shareholders is called upon by the written request
                                         of Shareholders pursuant to the previous sentence, then such written request must specify
                                         the nature of the business proposed to be transacted and such business must be a proper
                                         matter for Shareholder action, and, as to any proposed business or Director nominations
                                         that such Shareholders propose to bring before the meeting, such Shareholder must provide
                                         with such request the information set forth in subclauses (i) through (viii) of Article
                                         7.17(a). Furthermore, any such business must comply with, and shall be subject to, the
                                         requirements and provisions of Articles 7.16(b) and 7.17(b).</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.5</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Written
                                         notice of all meetings of Shareholders, stating the time, place and, in the case of a
                                         special meeting of Shareholders, the purpose or purposes thereof, shall be given by the
                                         Company pursuant to a Resolution of Directors not fewer than ten days before the date
                                         of the proposed meeting to those persons whose names appear as Shareholders in the Register
                                         of Members on the date of the notice and are entitled to vote at the meeting.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.6</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Directors may fix the date notice is given of a meeting of Shareholders, or such other
                                         date as may be specified in the notice, as the record date for determining those Shares
                                         that are entitled to vote at the meeting.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.7</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
                                         meeting of Shareholders may be called on short notice:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">if
                                         Shareholders holding not less than 90 percent of the total number of Shares entitled
                                         to vote on all matters to be considered at the meeting, or 90 percent of the votes of
                                         each class or series of Shares where Shareholders are entitled to vote thereon as a class
                                         or series together with not less than a 90 percent majority of the remaining votes, have
                                         agreed to short notice of the meeting, or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">if
                                         all Shareholders holding Shares entitled to vote on all or any matters to be considered
                                         at the meeting have waived notice of the meeting and for this purpose presence at the
                                         meeting shall be deemed to constitute waiver.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.8</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         inadvertent failure of the Directors to give notice of a meeting to a Shareholder, or
                                         the fact that a Shareholder has not received notice, does not invalidate the meeting.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.9</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
                                         Shareholder may be represented at a meeting of Shareholders by a proxy who may speak
                                         and vote on behalf of the Shareholder.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.10</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting
at which the person named in such instrument proposes to vote.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.11</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
instrument appointing a proxy shall be in such form as the Directors may from time to time determine or such other form as the
chairman of the meeting shall accept as properly evidencing the wishes of the Shareholder appointing the proxy. Execution of the
instrument appointing a proxy may be accomplished by the Shareholder or such Shareholder&rsquo;s authorized officer, director,
employee or agent signing such instrument by any reasonable means, including, but not limited to, by facsimile signature. A Shareholder
may authorize another person or persons to act for such Shareholder as proxy by transmitting or authorizing the transmission of
such communication evidencing the Shareholder&rsquo;s intention to appoint a person or persons as his proxy by means of a telegram,
cablegram, or other means of electronic transmission (including but not limited to, via internet or telephone) to the person who
will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized
by the person who will be the holder of the proxy to receive such transmission, provided that any such telegram, cablegram or
the other means of electronic transmission (which must be supported by printed evidence thereof) must be either set forth or be
submitted with written information from which it can be determined that the telegram, cablegram or printed evidence of the other
electronic transmission was authorized by the Shareholder. Any copy, facsimile telecommunication or other reliable reproduction
of the writing or transmission created pursuant to this Article 7.11 may be substituted or used in lieu of the original writing
or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy,
facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.12</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following applies where Shares are jointly owned:</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">if
                                         two or more persons hold Shares jointly each of them may be present in person or by proxy
                                         at a meeting of Shareholders and may speak as a Shareholder;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">if
                                         only one of the joint owners is present in person or by proxy, he may vote on behalf
                                         of all joint owners; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">if
                                         two or more of the joint owners are present in person or by proxy, they must vote as
                                         one.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.13</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
                                         to such limitations, restrictions, guidelines and procedures as may be established by
                                         the Directors by Resolution of Directors from time to time, a Shareholder shall be deemed
                                         to be present at a meeting of Shareholders if he participates by telephone or other electronic
                                         means and all Shareholders participating in the meeting are able to hear each other.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36px; font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.14</FONT> </TD>
    <TD STYLE="font-size: 10pt"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A meeting of
    Shareholders is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less
    than one-third (33.33%) of the votes of the Shares entitled to vote on the Resolutions of Shareholders to be considered at
    the meeting. If a quorum be present, notwithstanding the fact that such quorum may be represented by only a single
    Shareholder or proxy, then such person may pass a Resolution of Shareholders and a certificate signed by such person
    accompanied where such person be a proxy by a copy of the proxy instrument shall constitute a valid Resolution of
    Shareholders. The Shareholders present at a duly called or held meeting of Shareholders at which a quorum is present may
    continue to transact business until adjournment notwithstanding the withdrawal of enough Shareholders to leave less than a
    quorum, if any action (other than adjournment) is approved by at least a majority of the Shares required to constitute a
    quorum.</FONT> </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.15</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition
of Shareholders, shall be dissolved; in any other case it shall stand adjourned to the next business day in the jurisdiction in
which the meeting was to have been held at the same time and place or to such other time and place as the chairman of the meeting
may determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person
or by proxy not less than one third of the votes of the Shares or each class or series of Shares entitled to vote on the matters
to be considered by the meeting, those present shall constitute a quorum but otherwise the meeting shall be dissolved.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.16</FONT></TD><TD STYLE="text-align: left; width: 27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a) &#9;</FONT></TD>
                                                                                                                                                                <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At any annual meeting of Shareholders, only proposals
of business which have been made in accordance with this Article shall be eligible to be brought before such meeting:</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 54pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">by
                                         or at the direction of the Chairman of the Board or by Resolution of Directors;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 81pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 81pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 81pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 54pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(ii)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">by
                                         any Shareholder who is a holder of record as of the record date established pursuant
                                         to Article 7.6 who is entitled to vote at the meeting and who complies with the requirements
                                         and procedures set out in Article 7.17.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 26.95pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
                                         any special meeting of Shareholders, only such business shall be conducted as shall have
                                         been brought before the meeting pursuant to the notice of meeting made pursuant to Article
                                         7.5.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.17</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)
                                         &#9;For business to be properly brought to an annual meeting of Shareholders by a Shareholder,
                                         such business must be a proper matter for Shareholder action and the Shareholder must
                                         have given timely written notice thereof, either by personal delivery or by prepaid registered
                                         post to the Secretary of the Company (the &ldquo;<B>Secretary</B>&rdquo;) at the principal
                                         executive offices of the Company. To be considered timely in connection with an annual
                                         meeting of Shareholders, a Shareholder&rsquo;s notice must be delivered not less than
                                         60 days nor more than 90 days prior to the anniversary date of the prior year&rsquo;s
                                         annual meeting of Shareholders; provided, however, that in the event that the date of
                                         the annual meeting of Shareholders changed by more than 30 days from such anniversary
                                         date, notice from a Shareholder shall also be considered timely if it is delivered not
                                         earlier than 90 days prior to such annual meeting nor later than the later of (i) 60
                                         days prior to such annual meeting or (ii) the close of business on the tenth day following
                                         the day on which public disclosure is first made of the date of such annual meeting of
                                         Shareholders. For the purposes of this Article 7.17, any adjournment(s) or postponement(s)
                                         of the original annual meeting of Shareholders whereby such meeting will reconvene within
                                         30 days from original date shall be deemed, for purposes of notice, to be a continuation
                                         of such original annual meeting of Shareholders and no business may be brought before
                                         any reconvened meeting unless such timely notice of such business was properly given
                                         to the Secretary for the meeting as originally scheduled. A Shareholder&rsquo;s notice
                                         to the Secretary shall set out:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 54pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                         brief description of the proposal or the business desired to be brought before the meeting;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 81pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 54pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(ii)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         full text of the proposal or business (including the full text of any resolutions proposed
                                         for consideration, and, in the event that such business includes a proposal to amend
                                         either the Memorandum or the Articles of the Company, the full text of the proposed amendment)
                                         and such other information regarding such proposal as would be required in a proxy statement
                                         filed pursuant to the proxy rules of the Securities and Exchange Commission had such
                                         proposal been made by the Company;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 81pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 54pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(iii)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         reasons for making the proposal or conducting such business at the meeting;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 81pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 54pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(iv)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                         representation that the Shareholder is a holder of record of Shares in the Company entitled
                                         to vote at such meeting and that such Shareholder intends to appear in person or by a
                                         proxy at the meeting to conduct the business being proposed as specified in the notice;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 81pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 54pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(v)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         name and address of record of the Shareholder proposing such business and the beneficial
                                         owner, if any, on whose behalf the proposal is made;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 81pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 81pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 54pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(vi)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         class and number of Shares of the Company which are owned beneficially or of record by
                                         such Shareholder and the beneficial owner, if any, on whose behalf the proposal is made;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 81pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 54pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(vii)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">any
                                         material interest of such Shareholder, and the beneficial owner, if any, on whose behalf
                                         the proposal is made, in such proposal or business and a description of all relationships,
                                         arrangements or understandings between the Shareholder and the beneficial owner, if any,
                                         on whose behalf the proposal is made; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 81pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 54pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(viii)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">if
                                         the Shareholder or the beneficial owner, if any, on whose behalf the proposal is made
                                         intends to solicit proxies in support of such Shareholder&rsquo;s or beneficial owner&rsquo;s
                                         proposal, a representation to that effect.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notwithstanding
                                         the foregoing or any other Article contained in the Articles, nothing in Articles 7.4,
                                         7.16(a)(ii), 7.16(b) or 7.17 shall be interpreted or construed to require the inclusion
                                         of information about any such proposal in any proxy statement distributed by, at the
                                         direction of, or on behalf of, the Directors. The chairman of a meeting of Shareholders
                                         shall have the power and the duty, if the facts so warrant, to determine and declare
                                         to the meeting that business was not properly brought before the meeting in accordance
                                         with the provisions of Articles 7.4, 7.16 or 7.17 and, if he should so determine, he
                                         shall so declare to the meeting and any such business not properly brought before the
                                         meeting shall not be transacted. Notwithstanding anything contained elsewhere in these
                                         Articles, if a Shareholder has notified the Company of his intention to present a proposal
                                         at a meeting of Shareholders and such Shareholder does not appear or send a qualified
                                         representative, as determined by the chairman of the meeting, to present such proposal
                                         at such meeting, the Company need not present such proposal for a vote at such meeting
                                         notwithstanding that proxies in respect of such vote may have been received by the Company.
                                         Notwithstanding anything contained elsewhere in these Articles, a Shareholder shall also
                                         comply with all applicable requirements of the Exchange Act and the rules and regulations
                                         promulgated thereunder with respect to the matters set forth in Articles 7.4, 7.16(a)(ii),
                                         7.16(b) and 7.17. Nothing in these Articles shall be deemed to affect any rights of Shareholders
                                         to request inclusion of proposals in the Company&rsquo;s proxy statement pursuant to
                                         Regulation 14A under the Exchange Act.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.18</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
                                         every meeting of Shareholders, the Chairman of the Board shall preside as chairman of
                                         the meeting. If there is no Chairman of the Board or if the Chairman of the Board is
                                         not present at the meeting, the vice-Chairman of the Board shall be the chairman of the
                                         meeting. If there is no vice-Chairman of the Board or if the vice-Chairman of the Board
                                         is not present at the meeting, the chief executive officer shall be the chairman of the
                                         meeting. In the absence of the chief executive officer, such other person as shall be
                                         selected by the Board shall act as chairman of the meeting. Subject to the Memorandum
                                         and these Articles, the Board may adopt by Resolution of Directors, rules and regulations
                                         for the conduct of meetings of Shareholders as it shall deem appropriate relating to:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         establishment of an agenda or order of business for the meeting and other matters pertaining
                                         to the conduct of the meeting;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">maintaining
                                         order at the meeting and the safety of those present;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">limitations
                                         on attendance at or participation in the meeting of shareholders of record, their duly
                                         authorized and constituted proxies or such other persons as the Directors or chairman
                                         of the meeting shall determine;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">restrictions
                                         on entry to the meeting after the time fixed for commencement thereof; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(e)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">limitations
                                         on the time allotted to questions or comments by participants,</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.19</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
                                         to the Memorandum, these Articles and any Resolution of Directors, the chairman of the
                                         meeting of Shareholders shall have the right and authority to prescribe rules and regulations
                                         for the conduct of meetings of Shareholders as he shall deem appropriate, including but
                                         not limited to the matters described in Articles 7.18 (a) through (e) above.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.20</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         chairman of the meeting may adjourn any meeting from time to time, and from place to
                                         place, but no business shall be transacted at any adjourned meeting other than the business
                                         left unfinished at the meeting from which the adjournment took place.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.21</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
                                         any meeting of the Shareholders, the chairman of the meeting is responsible for deciding
                                         in such manner as he considers appropriate whether any resolution proposed has been carried
                                         or not, and the result of his decision shall be announced to the meeting (including any
                                         adjournment thereof) and recorded in the minutes of the meeting. If the chairman has
                                         any doubt as to the outcome of the vote on a proposed resolution, he shall cause a poll
                                         to be taken of all votes cast upon such resolution. If the chairman fails to take a poll,
                                         then any Shareholder present in person or by proxy who disputes the announcement by the
                                         chairman of the result of any vote may immediately following such announcement demand
                                         that a poll be taken and the chairman shall cause a poll to be taken. If a poll is taken
                                         at any meeting, the result shall be announced to the meeting (including any adjournment
                                         thereof) and recorded in the minutes of the meeting.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.22</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
                                         person other than an individual shall be regarded as one Shareholder and subject to the
                                         specific provisions hereinafter contained for the appointment of representatives of such
                                         persons the right of any individual to speak for or represent such Shareholder shall
                                         be determined by the law of the jurisdiction where, and by the documents by which, the
                                         person is constituted or derives its existence. In case of doubt, the Directors may in
                                         good faith seek legal advice and unless and until a court of competent jurisdiction shall
                                         otherwise rule, the Directors may rely and act upon such advice without incurring any
                                         liability to any Shareholder.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.23</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
                                         person other than an individual which is a Shareholder of the Company may by resolution
                                         of its directors or other governing body of such person authorize such person as it thinks
                                         fit to act as its representative at any meeting of the Shareholders or meeting of any
                                         class of Shareholders of the Company, and the person so authorized shall be entitled
                                         to exercise the same powers on behalf of the person which he represents as that person
                                         could exercise if it were an individual Shareholder.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.24</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         chairman of any meeting at which a vote is cast by proxy or on behalf of any person other
                                         than an individual may call for a notarially certified copy of such proxy or authority
                                         which shall be produced within 7 days of being so requested or the votes cast by such
                                         proxy or on behalf of such person shall be disregarded.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.25</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Directors
                                         of the Company may attend and speak at any meeting of Shareholders and at any separate
                                         meeting of the holders of any class or series of Shares.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.26</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">No
                                         business of the Company shall be conducted at a meeting of shareholders except in accordance
                                         with the provisions of this Article 7.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>8.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>DIRECTORS</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Board shall consist of up to seven Directors. Initially, Liaison may, by notice in writing
                                         signed by or on behalf of Liaison and delivered to the principal executive offices of
                                         the Company, appoint and replace up to four of the Directors, and the Minority Representative
                                         may, by notice in writing signed by or on behalf of the Minority Representative and delivered
                                         to the principal executive offices of the Company, appoint and replace up to three of
                                         the Directors. All such notices must be addressed to the Chief Executive Officer and
                                         the General Counsel of the Company.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 26.95pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
                                         the number of Shares or other Equity Interests held by the Legacy Shareholders from time
                                         to time represents (i) more than two sevenths (2/7) of the total voting power of all
                                         outstanding Shares or other Equity Interests of the Company, then the Minority Representative
                                         shall be entitled to appoint and replace three Directors, (ii) less than or equal to
                                         two sevenths (2/7) and more than one seventh (1/7) of the total voting power of all outstanding
                                         Shares or other Equity Interests of the Company, then the Minority Representative shall
                                         be entitled to appoint and replace two Directors, (iii) less than or equal to one seventh
                                         (1/7) and more than five percent (5%) of the total voting power of all outstanding Shares
                                         or other Equity Interests of the Company, then the Minority Representative shall be entitled
                                         to appoint and replace one Director, and (iv) less than or equal to five percent (5%)
                                         of the total voting power of all outstanding Shares or other Equity Interests of the
                                         Company, then the Minority Representative shall no longer be entitled to appoint or replace
                                         any Directors under this Article 8.1(i).</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 26.95pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(ii)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
                                         the number of Shares or other Equity Interests held by Liaison or its Affiliates from
                                         time to time represents (i) more than fifty percent (50%) of the total voting power of
                                         all outstanding Shares or other Equity Interests of the Company, then Liaison shall be
                                         entitled to appoint and replace four Directors, (ii) less than or equal to fifty percent
                                         (50%) and more than two sevenths (2/7) of the total voting power of all outstanding Shares
                                         or other Equity Interests of the Company, then Liaison shall be entitled to appoint and
                                         replace three Directors, (iii) less than or equal to two sevenths (2/7) and more than
                                         one seventh (1/7) of the total voting power of all outstanding Shares or other Equity
                                         Interests of the Company, then Liaison shall be entitled to appoint and replace two Directors,
                                         (iv) less than or equal to one seventh (1/7) and more than five percent (5%) of the total
                                         voting power of all outstanding Shares or other Equity Interests of the Company, then
                                         Liaison shall be entitled to appoint and replace one Director, and (v) less than or equal
                                         to five percent (5%) of the total voting power of all outstanding Shares or other Equity
                                         Interests of the Company, then Liaison shall no longer be entitled to appoint or replace
                                         any Directors under this Article 8.1(ii).</FONT></TD></TR></TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 26.95pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(iii)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
                                         to the Articles and the Law, any Director positions which neither Liaison nor the Minority
                                         Representative are entitled to appoint under this Article 8.1 (the &ldquo;<B>Remaining
                                         Directors</B>&rdquo;) shall be elected or appointed in accordance with this Article 8.1(iii).
                                         The Directors shall have the right to nominate the Remaining Directors. Such Remaining
                                         Directors, shall be elected by Resolution of Shareholders. Pending any such election
                                         by members, the Directors shall have the power from time to time and at any time to appoint
                                         any person as a Director to fill a casual vacancy on the Board. Any Director appointed
                                         by the Board to fill a casual vacancy shall hold office until the first general meeting
                                         of Members after his appointment and shall resign and be subject to re-election at such
                                         meeting.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 26.95pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(iv)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Of
                                         the Directors appointed by the Minority Representative pursuant to Article 8.1(i), one
                                         shall be designated by the Minority Representative to be the &ldquo;<B>Primary Minority
                                         Board Appointee&rdquo;</B> from time to time by delivering written notice thereof to
                                         the Board. The initial Primary Minority Board Appointee shall be Fred Chang.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         composition of the board of directors (or equivalent governing body) of each of the Company&rsquo;s
                                         Subsidiaries (each, a &ldquo;<B>Subsidiary Board</B>&rdquo;) shall be determined by the
                                         Board; provided that, the Minority Representative and Liaison shall each be entitled
                                         (but not be obligated) to cause any Subsidiary Board to consist of the same number of
                                         members as that of the Board, with the Minority Representative and Liaison each entitled
                                         to appoint and replace (or nominate for appointment, to the extent they are not allowed
                                         to appoint), the same number of members as they are then entitled to appoint to the Board
                                         itself pursuant to Article 8.1.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Minority Representative and Liaison shall each have the right (but not the obligation)
                                         to appoint and replace a corresponding number of members to any committee of the Board
                                         (or Subsidiary Board) in the same proportion as the Minority Representative or Liaison,
                                         as the case may be, is entitled, at the time of such appointment or replacement, to appoint
                                         to the Board itself pursuant to Article 8.1, rounding to the nearest whole number.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.4</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
                                         Principal Shareholder shall vote all of its Shares and any other voting Equity Interests
                                         and securities of the Company over which such Principal Shareholder has voting control
                                         and shall take (and cause its nominees on the Board or any Subsidiary Board to take (including
                                         replacing such nominee if they do not follow such direction)) all other necessary or
                                         desirable actions within its control (whether in its capacity as a shareholder, stockholder,
                                         director, member of a board committee, or officer or otherwise, and including attendance
                                         at meetings in person or by proxy for purposes of obtaining a Board Quorum and execution
                                         of written consents in lieu of meetings), and the Company shall take all necessary or
                                         desirable actions within its control (including calling special board and shareholder
                                         meetings) to ensure that:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 26.95pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         Directors shall be appointed and replaced in accordance with the terms of Article 8.1,
                                         and such individuals shall be duly elected and appointed to such positions upon (a) in
                                         the case of any appointment or replacement under Articles 8.1(i) or 8.1(ii), the delivery
                                         to the principal executive offices of the Company of the relevant notice of appointment
                                         or replacement from Liaison or the Minority Representative, as the case may be, (b) in
                                         the case of any appointment or replacement under Article 8.1(iii), the passing of, and
                                         in accordance with the terms of, the relevant Resolution of Directors and (c)&nbsp;in
                                         the case of any election under Article 8.1(iii), the passing of, and in accordance with
                                         the terms of, the relevant Resolution of Shareholders; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 26.95pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(ii)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         members of the Subsidiary Boards and committees of the Board shall be appointed and replaced
                                         in accordance with the terms of Article 8.2 and Article 8.3, respectively, and such individuals
                                         shall be duly elected and appointed to such positions.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.5</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
                                         Director or member of a committee of the Board or Subsidiary Board may be removed from
                                         office, with cause, by a Resolution of Shareholders or by Resolution of Directors passed
                                         at a meeting of Directors called for the purpose of removing the Director or for purposes
                                         including the removal of the Director; provided that:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -0.75in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 26.95pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">any
                                         Director or member of a committee of the Board or Subsidiary Board that is appointed
                                         or nominated by the Minority Representative shall be removed from the Board, any Subsidiary
                                         Board, or any committee thereof upon and only upon, the written request of the Minority
                                         Representative; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 26.95pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(ii)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">any
                                         Director or member of a committee of the Board or Subsidiary Board that is appointed
                                         or nominated by Liaison shall be removed from the Board, any Subsidiary Board, or any
                                         committee thereof upon, and only upon, the written request of Liaison.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.6</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
                                         the event that any Director ceases to serve as a member of the Board or any committee
                                         thereof for any reason, in each case, during such member&rsquo;s term of office, the
                                         resulting vacancy on the Board or committee, as applicable, shall be filled in the manner
                                         provided in Article 8.1. In the event that any Person for any reason ceases to serve
                                         as a member of a Subsidiary Board or any committee of the Board or of a Subsidiary Board
                                         during such member&rsquo;s term of office, the resulting vacancy shall be filled by the
                                         Company or the relevant Subsidiary (acting at the direction of the Board) in the manner
                                         provided in Article 8.2 and Article 8.3.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.7</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company shall keep a register of Directors containing:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 26.95pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         names and addresses of the persons who are Directors of the Company;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 26.95pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         date on which each person whose name is entered in the register was appointed as a Director
                                         of the Company;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 26.95pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         date on which each person named as a Director ceased to be a Director of the Company;
                                         and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 26.95pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">such
                                         other information as may be prescribed by the Act.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.8</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         register of Directors may be kept in any such form as the Directors may approve, but
                                         if it is in magnetic, electronic or other data storage form, the Company must be able
                                         to produce legible evidence of its contents. Until a Resolution of Directors determining
                                         otherwise is passed, the magnetic, electronic or other data storage shall be the original
                                         register of Directors. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.9</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
                                         Director is not required to hold a Share as a qualification to office.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.10</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
office of a Director shall be vacated in any of the events following, namely:</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 26.95pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">if
                                         he resigns his office by notice in writing delivered to the registered office or tendered
                                         at a meeting of the Board; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 26.95pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">if
                                         the Board resolves that he is through physical or mental incapacity or mental disorder
                                         no longer able to perform the functions of a Director; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 26.95pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">if
                                         he fails, without leave, to attend (whether or not an alternate Director appointed by
                                         him attends) three successive Board meetings or four Board meetings in any consecutive
                                         period of 12 months despite a notice being given to him prior to such third or fourth
                                         meeting (as the case may be) that the provisions of this paragraph might apply and not
                                         less than two-thirds of all the other Directors (excluding the Director concerned and,
                                         in his capacity as such, any alternate Director appointed by the Director concerned)
                                         resolving that his office should be vacated; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 26.95pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">if
                                         he becomes bankrupt or insolvent or makes an arrangement or composition with his creditors
                                         or applies to the Court in connection with a voluntary arrangement; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 26.95pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(e)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">any
                                         event analogous to those listed in Article 8.11 under the laws of any other jurisdiction
                                         occurs in relation to a Director; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 26.95pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(f)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">if
                                         he is prohibited by law from being a Director; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 26.95pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(g)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">if
                                         he ceases to be a Director by virtue of the Act; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.95pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 26.95pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(h)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">if
                                         he is removed from office either (a) pursuant to Article 8.5, or (b) at the written request
                                         of (i) in the case of any Director that is appointed by the Minority Representative,
                                         the Minority Representative, or (ii) in the case of any Director that is appointed by
                                         Liaison, Liaison.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the case of Articles 8.10 (b) to (h) inclusive above, the Director shall be removed from office. In the event of a vacation of
any Director appointed by the Minority Representative or Liaison only the Minority Representative and Liaison (as the case may
be) shall be entitled to replace that Director appointed by it in the manner provided for in accordance with Article 8.1.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.11</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
                                         Resolution of Directors declaring that a Director has vacated office under Article 8.10
                                         shall be conclusive as to that fact and as to the ground of vacation as stated in the
                                         resolution.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.12</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
                                         Director shall have the power to appoint any person to be his alternate Director and
                                         may at his discretion remove such alternate Director, provided that this does not prejudice
                                         the rights of the Minority Representative or Liaison under Article 8.1. If such alternate
                                         Director is not another Director, such appointment, unless previously approved by the
                                         Board, shall have effect only upon and subject to it being so approved. Any appointment
                                         or removal of an alternate Director shall be effected by notice in writing signed by
                                         the appointer and delivered to the registered office or tendered at a meeting of the
                                         Board. An alternate Director shall, if his appointer so requests, be entitled to receive
                                         notices of meetings of the Board or of committees of the Board to the same extent as,
                                         but in lieu of, the Director appointing him and shall be entitled to such extent to attend
                                         at and vote as a Director at any such meeting at which the Director appointing him is
                                         not personally present and to exercise and discharge all the functions, powers and duties
                                         of his appointer as a Director and for the purposes of the proceedings at such meeting
                                         the provisions of these Articles shall apply as if he were a Director.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.13</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Every
                                         person acting as an alternate Director shall (except as regards power to appoint an alternate
                                         Director and remuneration) be subject in all respects to the provisions of these Articles
                                         relating to Directors and shall alone be responsible to the Company for his acts and
                                         defaults and shall not be deemed to be the agent of or for the Director appointing him.
                                         An alternate Director may be paid expenses and shall be entitled to be indemnified by
                                         the Company to the same extent mutatis mutandis as if he were a Director but shall not
                                         be entitled to receive from the Company any fee in his capacity as an alternate Director
                                         except only such part (if any) of the remuneration otherwise payable to the Director
                                         appointing him as such Director may by notice in writing to the Company from time to
                                         time direct.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.14</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Every
                                         person acting as an alternate Director shall have one vote for each Director for whom
                                         he acts as alternate (in addition to his own vote if he is also a Director). The signature
                                         of an alternate Director to any resolution in writing of the Board or a committee of
                                         the Board shall, unless the notice of his appointment provides to the contrary, be as
                                         effective as the signature of his appointer.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.15</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
                                         alternate Director shall ipso facto cease to be an alternate Director if his appointer
                                         ceases for any reason to be a Director provided that, if at any meeting any Director
                                         retires but is re-elected at the same meeting, any appointment made by him pursuant to
                                         this Article which was in force immediately before his retirement shall remain in force
                                         as though he had not retired.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.16</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
                                         of the Directors shall be paid a fee at such rate as may from time to time be determined
                                         by the Board provided that the aggregate of all such fees so paid to Directors (excluding
                                         amounts payable under any other Article and any amount payable under any service contract)
                                         shall not exceed US$100,000 per annum, or such higher amount as may from time to time
                                         be determined by Resolution of Shareholders.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.17</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
                                         the Board determines each Director may be paid his reasonable travelling, hotel and incidental
                                         expenses of attending and returning from meetings of the Board or committees of the Board
                                         or meetings of Shareholders or separate meetings of the holders of any class or series
                                         of Shares or of debentures of the Company and shall be paid all expenses properly and
                                         reasonably incurred by him in the conduct of the Company&rsquo;s business or in the discharge
                                         of his duties as a Director. Any Director who, by request, goes or resides abroad for
                                         any purposes of the Company or who performs services which in the opinion of the Board
                                         go beyond the ordinary duties of a Director may be paid such extra remuneration (whether
                                         by way of salary, commission, participation in profits or otherwise) as the Board may
                                         determine and such extra remuneration shall be in addition to any remuneration provided
                                         for by or pursuant to any other Article.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>9.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>POWERS
                                         OF DIRECTORS</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">9.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
                                         to the provisions of Article 9.10, the business and affairs of the Company shall be managed
                                         by, or under the direction or supervision of, the Directors. The Directors have all the
                                         powers necessary for managing, and for directing and supervising, the business and affairs
                                         of the Company. The Directors may pay all expenses incurred preliminary to and in connection
                                         with the incorporation of the Company and may exercise all such powers of the Company
                                         as are not by the Act or by the Memorandum or the Articles required to be exercised by
                                         the Shareholders.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">9.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
                                         Director shall exercise his powers for a proper purpose and shall not act or agree to
                                         the Company acting in a manner that contravenes the Memorandum, the Articles or the Act.
                                         Each Director, in exercising his powers or performing his duties, shall act honestly
                                         and in good faith in what the Director believes to be the best interests of the Company.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">9.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
                                         the Company is the wholly owned subsidiary of a holding company, a Director may, when
                                         exercising powers or performing duties as a Director, act in a manner which he believes
                                         is in the best interests of the holding company even though it may not be in the best
                                         interests of the Company.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">9.4</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
                                         Director which is a body corporate may appoint any individual as its duly authorized
                                         representative for the purpose of representing it at meetings of the Directors, with
                                         respect to the signing of consents or otherwise.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">9.5</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         continuing Directors may act notwithstanding any vacancy in their body.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">9.6</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
                                         to the provisions of Article 9.10, the Directors may by Resolution of Directors exercise
                                         all the powers of the Company to incur indebtedness, liabilities or obligations and to
                                         secure indebtedness, liabilities or obligations whether of the Company or of any third
                                         party. The Directors shall have unlimited power to borrow money on behalf of the Company.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">9.7</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
                                         cheques, promissory notes, drafts, bills of exchange and other negotiable instruments
                                         and all receipts for moneys paid to the Company shall be signed, drawn, accepted, endorsed
                                         or otherwise executed, as the case may be, in such manner as shall from time to time
                                         be determined by Resolution of Directors.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">9.8</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
                                         the purposes of Section 175 (<I>Disposition of assets</I>) of the Act, subject to the
                                         provisions of Article 9.10, the Directors may by Resolution of Directors determine that
                                         any sale, transfer, lease, exchange or other disposition is in the usual or regular course
                                         of the business carried on by the Company and such determination is, in the absence of
                                         fraud, conclusive.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">9.9</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company has no power to grant loans to the Directors.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

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<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">9.10</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notwithstanding
                                         anything to the contrary in these Articles, if the number of Shares or other Equity Interests
                                         held by the Legacy Shareholders from time to time represents more than ten per cent.
                                         (10%) of the total voting power of all outstanding Equity Interests of the Company, then
                                         neither the Company nor any officer or agent of the Company or its Subsidiaries shall
                                         take, directly or indirectly, any of the actions described in this Article 9.10 (the
                                         &ldquo;<B>Reserved Matters</B>&rdquo;) without the approval of the affirmative vote of
                                         not less than a majority (more than 50%) of the number of votes represented by the Directors
                                         (excluding any vacancies), which majority must include the Primary Minority Board Appointee:</FONT></TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">initiate
                                         any liquidation, dissolution, bankruptcy filing or similar action, recapitalization,
                                         share combination or division, restructuring or reorganization of the Company or any
                                         of its Subsidiaries;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(ii)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">other
                                         than to the Company or a wholly-owned Subsidiary thereof, sell, license, Transfer or
                                         otherwise dispose of (including through merger or consolidation) all or substantially
                                         all of the assets or properties of the Company or any of its Subsidiaries in any transaction
                                         or series of related transactions;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(iii)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">agree
                                         to any merger, consolidation or combination of the Company or any of its Subsidiaries,
                                         or to a sale of all or substantially all of the assets of the Company in connection with
                                         a Company Sale;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(iv)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">commence
                                         or undertake any Reorganization;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(v)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">issue,
                                         directly or indirectly, any Equity Interest of the Company or permit any of the Subsidiaries
                                         to issue any Equity Interest other than, in each case, any Excluded Issuance;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(vi)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">materially
                                         alter or fundamentally change the nature of the business of the Company and its Subsidiaries;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(vii)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">amend,
                                         change, or waive any provision of, the memorandum and articles of association of the
                                         Company;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(viii)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">purchase
                                         or otherwise acquire all or any part of the assets or business of, or Equity Interests
                                         or other evidences of beneficial ownership of, invest in or participate in any joint
                                         venture, partnership or similar arrangement with, any Person (other than the Company
                                         or any of its Subsidiaries), in each case in any transaction or series of related transactions
                                         involving a commitment in excess of $10,000,000;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(ix)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">other
                                         than to the Company or a wholly-owned Subsidiary thereof, sell, license, Transfer or
                                         otherwise dispose of (including through merger or consolidation) any assets or properties
                                         of the Company or any of its Subsidiaries, in each case in any transaction or series
                                         of related transactions involving a commitment in excess of $10,000,000;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(x)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">other
                                         than loans to wholly-owned Subsidiaries, (A) extend any credit or make any loans to any
                                         Person, (B) incur, assume, guarantee, endorse or otherwise become responsible for indebtedness,
                                         or (C) amend, modify or supplement in any material respect the agreements governing (or
                                         otherwise extend or refinance) existing indebtedness;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(xi)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">appoint
                                         or remove the Chief Executive Officer of the Company;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(xii)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">enter
                                         into any Affiliate Transactions;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(xiii)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">amend,
                                         change or waive any of the actions of the Company described in this Article 9.10 or the
                                         required voting requirements specified in this Article 9.10; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(xiv)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">agree
                                         or commit to do any of the foregoing, or delegate any of the foregoing to the Company
                                         or any of its Subsidiaries or any officer or agent of the Company or Subsidiary thereof.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>10.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>PROCEEDINGS
                                         OF DIRECTORS</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
                                         one Director may call a meeting of the Directors by sending a written notice to each
                                         other Director.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Directors or any committee thereof may meet at such times and in such manner and places
                                         within or outside the British Virgin Islands as the Directors may determine to be necessary
                                         or desirable.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
                                         Director is deemed to be present at a meeting of Directors if he participates by telephone
                                         or other electronic means and all Directors participating in the meeting are able to
                                         hear each other.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.4</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
                                         Director shall be given not less than 3 days&rsquo; notice of meetings of Directors,
                                         but a meeting of Directors held without 3 days&rsquo; notice having been given to all
                                         Directors shall be valid if all the Directors entitled to vote at the meeting who do
                                         not attend waive notice of the meeting, and for this purpose the presence of a Director
                                         at a meeting shall constitute waiver by that Director. The inadvertent failure to give
                                         notice of a meeting to a Director, or the fact that a Director has not received the notice,
                                         does not invalidate the meeting.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.5</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
                                         quorum of the Board as to any action of the Board shall consist of (i) at least a majority
                                         of the Directors (excluding any vacancies), (ii) at least one Director appointed by the
                                         Minority Representative, and (iii) at least one Director appointed by Liaison (collectively,
                                         a &ldquo;<B>Board Quorum</B>&rdquo;); provided that if (x) notice for a board meeting
                                         is duly provided in accordance with these Articles, and (y) a Board Quorum for such noticed
                                         meeting is not obtained solely due to the absence of a Director appointed by the Minority
                                         Representative from the meeting or the absence of a Director appointed by Liaison from
                                         the meeting, then a Board Quorum shall be met for such subsequently noticed board meeting
                                         with the presence of at least a majority of the Directors and without the required presence
                                         pursuant to clauses (ii) or (iii), as applicable. A Board Quorum must be present at all
                                         Board meetings (whether in person or by proxy, by telephone, videoconference or otherwise)
                                         to conduct business and exist at all times during any such Board meeting, including the
                                         reconvening of a meeting adjourned, in order for any action taken at such meeting to
                                         be valid.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.6</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
                                         all matters requiring the vote or action of the Board, each Director shall be entitled
                                         to one vote.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.7</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
                                         meetings of Directors at which the Chairman of the Board is present, he shall preside
                                         as chairman of the meeting. If there is no Chairman of the Board or if the Chairman of
                                         the Board is not present, the Directors present shall choose one of their number to be
                                         chairman of the meeting.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.8</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
                                         action that may be taken by the Directors or a committee of Directors at a meeting may
                                         also be taken by a Resolution of Directors or a resolution of a committee of Directors
                                         consented to in writing by all Directors or by all members of the committee, as the case
                                         may be, without the need for any notice. The consent may be in the form of counterparts
                                         each counterpart being signed by one or more Directors. If the consent is in one or more
                                         counterparts, and the counterparts bear different dates, then the resolution shall take
                                         effect on the date upon which the last Director has consented to the resolution by signed
                                         counterparts.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.9</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Legacy Shareholders holding a majority (as measured at the time of selection of the Minority
                                         Representative) of the total voting interests represented by the Shares held by the Legacy
                                         Shareholders shall select the Minority Representative and have the power to remove and
                                         reselect a different Minority Representative from time to time. The initial Minority
                                         Representative shall be Fred Chang.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>11.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>COMMITTEES</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">11.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Directors may, by Resolution of Directors, designate one or more committees, each consisting
                                         of one or more Directors, and delegate one or more of their powers, including the power
                                         to affix the Seal, to the committee.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">11.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Directors have no power to delegate to a committee of Directors any of the following
                                         powers:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         amend the Memorandum or the Articles;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         designate committees of Directors;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         delegate powers to a committee of Directors;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         appoint or remove Directors;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(e)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         appoint or remove an agent;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(f)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         approve a plan of merger, consolidation or arrangement;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(g)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         make a declaration of solvency or to approve a liquidation plan;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(h)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         make a determination that immediately after a proposed Distribution the value of the
                                         Company&rsquo;s assets will exceed its liabilities and the Company will be able to pay
                                         its debts as they fall due; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36.5pt; text-indent: 20pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         make a determination in respect of a Reserved Matter.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">11.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Articles
                                         11.2(b) and (c) do not prevent a committee of Directors, where authorized by the Resolution
                                         of Directors appointing such committee or by a subsequent Resolution of Directors, from
                                         appointing a sub-committee and delegating powers exercisable by the committee to the
                                         sub-committee.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">11.4</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         meetings and proceedings of each committee of Directors consisting of 2 or more Directors
                                         shall be governed <I>mutatis mutandis </I>by the provisions of the Articles regulating
                                         the proceedings of Directors so far as the same are not superseded by any provisions
                                         in the Resolution of Directors establishing the committee.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">11.5</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Where
                                         the Directors delegate their powers to a committee of Directors they remain responsible
                                         for the exercise of that power by the committee, unless they believed on reasonable grounds
                                         at all times before the exercise of the power that the committee would exercise the power
                                         in conformity with the duties imposed on Directors under the Act.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>12.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>OFFICERS
                                         AND AGENTS</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company may by Resolution of Directors appoint officers of the Company at such times
                                         as may be considered necessary or expedient. Any number of offices may be held by the
                                         same person.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         officers shall perform such duties as are prescribed at the time of their appointment
                                         subject to any modification in such duties as may be prescribed thereafter by Resolution
                                         of Directors. In the absence of any specific prescription of duties it shall be the responsibility
                                         of the Chairman of the Board to preside at meetings of Directors and Shareholders, the
                                         Chief Executive Officer to manage the day to day affairs of the Company, the vice-presidents
                                         to act in order of seniority in the absence of the president but otherwise to perform
                                         such duties as may be delegated to them by the president, the secretaries to maintain
                                         the Register of Members, minute books and records (other than financial records) of the
                                         Company and to ensure compliance with all procedural requirements imposed on the Company
                                         by applicable law, and the Chief Financial Officer to be responsible for the financial
                                         affairs of the Company.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         emoluments of all officers shall be fixed by Resolution of Directors.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.4</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         officers of the Company shall hold office until their successors are duly appointed,
                                         but any officer elected or appointed by the Directors may be removed at any time, with
                                         or without cause, by Resolution of Directors. Any vacancy occurring in any office of
                                         the Company may be filled by Resolution of Directors.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.5</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Directors may, by Resolution of Directors, appoint any person, including a person who
                                         is a Director, to be an agent of the Company.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.6</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
                                         agent of the Company shall have such powers and authority of the Directors, including
                                         the power and authority to affix the Seal, as are set forth in the Articles or in the
                                         Resolution of Directors appointing the agent, except that no agent has any power or authority
                                         with respect to the following:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         amend the Memorandum or the Articles;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         change the registered office or agent;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         designate committees of Directors;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         delegate powers to a committee of Directors;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(e)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         appoint or remove Directors;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(f)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         appoint or remove an agent;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(g)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         fix emoluments of Directors;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(h)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         approve a plan of merger, consolidation or arrangement;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(i)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         make a declaration of solvency or to approve a liquidation plan;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(j)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         make a determination that immediately after a proposed Distribution the value of the
                                         Company&rsquo;s assets will exceed its liabilities and the Company will be able to pay
                                         its debts as they fall due; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(k)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">to
                                         authorize the Company to continue as a company incorporated under the laws of a jurisdiction
                                         outside the British Virgin Islands.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.7</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Resolution of Directors appointing an agent may authorize the agent to appoint one or
                                         more substitutes or delegates to exercise some or all of the powers conferred on the
                                         agent by the Company.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.8</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Directors may remove an agent appointed by the Company and may revoke or vary a power
                                         conferred on him.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>13.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>CONFLICT
                                         OF INTERESTS</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">13.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
                                         Director shall, forthwith after becoming aware of the fact that he is interested in a
                                         transaction entered into or to be entered into by the Company, disclose the interest
                                         to all other Directors.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">13.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
                                         the purposes of Article 13.1, a disclosure to all other Directors to the effect that
                                         a Director is a member, director or officer of another named entity or has a fiduciary
                                         relationship with respect to the entity or a named individual and is to be regarded as
                                         interested in any transaction which may, after the date of the entry into the transaction
                                         or disclosure of the interest, be entered into with that entity or individual, is a sufficient
                                         disclosure of interest in relation to that transaction.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">13.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
                                         Director who is interested in a transaction entered into or to be entered into by the
                                         Company may:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">vote
                                         on a matter relating to the transaction;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">attend
                                         a meeting of Directors at which a matter relating to the transaction arises and be included
                                         among the Directors present at the meeting for the purposes of a Board Quorum; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">sign
                                         a document on behalf of the Company, or do any other thing in his capacity as a Director,
                                         that relates to the transaction, and, subject to compliance with the Act shall not, by
                                         reason of his office be accountable to the Company for any benefit which he derives from
                                         such transaction and no such transaction shall be liable to be avoided on the grounds
                                         of any such interest or benefit.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>14.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>INDEMNIFICATION</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">14.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
                                         to the limitations hereinafter provided the Company shall indemnify against all expenses,
                                         including legal fees, and against all judgments, fines and amounts paid in settlement
                                         and reasonably incurred in connection with legal, administrative or investigative proceedings
                                         any person who:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">is
                                         or was a party or is threatened to be made a party to any threatened, pending or completed
                                         proceedings, whether civil, criminal, administrative or investigative, by reason of the
                                         fact that the person is or was a Director, an officer or a liquidator of the Company;
                                         or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">is
                                         or was, at the request of the Company, serving as a director, an officer or a liquidator
                                         of, or in any other capacity is or was acting for, another body corporate or a partnership,
                                         joint venture, trust or other enterprise.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.95pt; text-align: left; text-indent: -1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
indemnity in Article 14.1 only applies if the person acted honestly and in good faith with a view to the best interests of the
Company and, in the case of criminal proceedings, the person had no reasonable cause to believe that their conduct was unlawful.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">14.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         decision of the Directors as to whether the person acted honestly and in good faith and
                                         with a view to the best interests of the Company and as to whether the person had no
                                         reasonable cause to believe that his conduct was unlawful is, in the absence of fraud,
                                         sufficient for the purposes of the Articles, unless a question of law is involved.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">14.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         termination of any proceedings by any judgment, order, settlement, conviction or the
                                         entering of a <I>nolle prosequi </I>does not, by itself, create a presumption that the
                                         person did not act honestly and in good faith and with a view to the best interests of
                                         the Company or that the person had reasonable cause to believe that his conduct was unlawful.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">14.4</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Expenses,
                                         including legal fees, incurred by a Director in defending any legal, administrative or
                                         investigative proceedings may be paid by the Company in advance of the final disposition
                                         of such proceedings upon receipt of an undertaking by or on behalf of the Director to
                                         repay the amount if it shall ultimately be determined that the Director is not entitled
                                         to be indemnified by the Company in accordance with Article 14.1.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">14.5</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Expenses,
                                         including legal fees, incurred by a former Director in defending any legal, administrative
                                         or investigative proceedings may be paid by the Company in advance of the final disposition
                                         of such proceedings upon receipt of an undertaking by or on behalf of the former Director
                                         to repay the amount if it shall ultimately be determined that the former Director is
                                         not entitled to be indemnified by the Company in accordance with Article 14.1 and upon
                                         such terms and conditions, if any, as the Company deems appropriate.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">14.6</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         indemnification and advancement of expenses provided by, or granted pursuant to, this
                                         section is not exclusive of any other rights to which the person seeking indemnification
                                         or advancement of expenses may be entitled under any agreement, Resolution of Shareholders,
                                         resolution of disinterested Directors or otherwise, both as acting in the person&rsquo;s
                                         official capacity and as to acting in another capacity while serving as a Director.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">14.7</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
                                         a person referred to in Article 14.1 has been successful in defense of any proceedings
                                         referred to in Article 14.1, the person is entitled to be indemnified against all expenses,
                                         including legal fees, and against all judgments, fines and amounts paid in settlement
                                         and reasonably incurred by the person in connection with the proceedings.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">14.8</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company shall purchase and maintain insurance in relation to any person who is or was
                                         a Director, officer or liquidator of the Company or any of its Subsidiaries, or who at
                                         the request of the Company is or was serving as a director, officer or liquidator of,
                                         or in any other capacity is or was acting for, another body corporate or a partnership,
                                         joint venture, trust or other enterprise, against any liability asserted against the
                                         person and incurred by the person in that capacity, whether or not the Company has or
                                         would have had the power to indemnify the person against the liability as provided in
                                         these Articles.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>15.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>RECORDS</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">15.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company shall keep the following documents at the office of its registered agent:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         Memorandum and the Articles;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         Register of Members, or a copy of the Register of Members;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         register of Directors, or a copy of the register of Directors; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">copies
                                         of all notices and other documents filed by the Company with the Registrar of Corporate
                                         Affairs in the previous 10 years.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">15.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Until
                                         the Directors determine otherwise by Resolution of Directors the Company shall keep the
                                         original Register of Members and original register of Directors at the office of its
                                         registered agent.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">15.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
                                         the Company maintains only a copy of the Register of Members or a copy of the register
                                         of Directors at the office of its registered agent, it shall:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">within
                                         15 days of any change in either register, notify the registered agent in writing of the
                                         change; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">provide
                                         the registered agent with a written record of the physical address of the place or places
                                         at which the original Register of Members or the original register of Directors is kept.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 30pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">15.4</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company shall keep the following records at the office of its registered agent or at
                                         such other place or places, within or outside the British Virgin Islands, as the Directors
                                         may determine:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">minutes
                                         of meetings and Resolutions of Shareholders and classes of Shareholders; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">minutes
                                         of meetings and Resolutions of Directors and committees of Directors.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">15.5</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Where
                                         any original records referred to in this Article are maintained other than at the office
                                         of the registered agent of the Company, and the place at which the original records are
                                         maintained is changed, the Company shall provide the registered agent with the physical
                                         address of the new location of the records of the Company within 14 days of the change
                                         of location.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">15.6</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         records kept by the Company under this Article shall be in written form or either wholly
                                         or partly as electronic records complying with the requirements of the Electronic Transactions
                                         Act, 2001 (No. 5 of 2001) as from time to time amended or re-enacted.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>16.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>REGISTER
                                         OF CHARGES</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company shall maintain at the office of its registered agent, a register of charges in which there shall be entered the following
particulars regarding each mortgage, charge and other encumbrance created by the Company:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         date of creation of the charge;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                         short description of the liability secured by the charge;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                         short description of the property charged;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         name and address of the trustee for the security or, if there is no such trustee, the
                                         name and address of the chargee;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(e)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">unless
                                         the charge is a security to bearer, the name and address of the holder of the charge;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27.35pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(f)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">details
                                         of any prohibition or restriction contained in the instrument creating the charge on
                                         the power of the Company to create any future charge ranking in priority to or equally
                                         with the charge; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36.5pt; text-indent: 20pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(g)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">such
                                         other information as may be prescribed by the Act.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>17.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>SEAL</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">17.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company shall have a Seal an impression of which shall be kept at the office of the registered
                                         agent of the Company. The Company may have more than one Seal and references herein to
                                         the Seal shall be references to every Seal which shall have been duly adopted by Resolution
                                         of Directors. The Directors shall provide for the safe custody of the Seal and for an
                                         imprint thereof to be kept at the registered office.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">17.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Except
                                         as otherwise expressly provided herein the Seal when affixed to any written instrument
                                         shall be witnessed and attested to by the signature of any one Director or other person
                                         so authorized from time to time by Resolution of Directors. Such authorization may be
                                         before or after the Seal is affixed, may be general or specific and may refer to any
                                         number of sealings. The Directors may provide for the Seal and/or for the signature of
                                         any Director or authorized person to be affixed by electronic means on any instrument
                                         in accordance with the Electronic Transactions Act, 2001 and it shall have the same force
                                         and validity as if the Seal had been affixed to such instrument and the same had been
                                         attested to as hereinbefore described.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">17.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
                                         contract, agreement or other instrument executed by or on behalf of the Company by a
                                         Director or an authorized agent of the Company is not invalid by reason only of the fact
                                         that the Seal is not affixed to the contract, agreement or instrument.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">17.4</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
                                         instrument is validly executed by the Company as a deed or an instrument under seal if
                                         it is either:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">sealed
                                         with the Seal and witnessed by a Director or such other person who is authorized by the
                                         Memorandum and these Articles to witness the application of the Seal; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">it
                                         is expressed to be, or is expressed to be executed as, or otherwise makes clear on its
                                         face that it is intended to be, a deed and it is signed by a Director or by a person
                                         so authorized from time to time by Resolution of Directors.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>18.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>DISTRIBUTIONS
                                         BY WAY OF DIVIDEND</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">18.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
                                         to the provisions of Article 9.10, the Directors of the Company may, by Resolution of
                                         Directors, authorize a Distribution by way of dividend at a time and of an amount they
                                         think fit if they are satisfied, on reasonable grounds, that, immediately after the Distribution,
                                         the value of the Company&rsquo;s assets will exceed its liabilities and the Company will
                                         be able to pay its debts as they fall due.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">18.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dividends
                                         may be paid in money, Shares, or other property.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">18.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notice
                                         of any dividend that may have been declared shall be given to each Shareholder as specified
                                         in Article 20.1 and all dividends unclaimed for 3 years after having been declared may
                                         be forfeited by Resolution of Directors for the benefit of the Company.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">18.4</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">No
                                         dividend shall bear interest as against the Company and no dividend shall be paid on
                                         Treasury Shares.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">18.5</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Directors may, before authorizing any Distribution, set aside out of the profits of the
                                         Company such sum as they think proper as a reserve fund, any may invest the sum so set
                                         apart as a reserve fund upon such securities as they may select.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>19.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ACCOUNTS
                                         AND AUDIT</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">19.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company shall keep records that are sufficient to show and explain the Company&rsquo;s
                                         transactions and that will, at any time, enable the financial position of the Company
                                         to be determined with reasonable accuracy.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">19.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company may by Resolution of Shareholders call for the Directors to prepare periodically
                                         and make available a profit and loss account and a balance sheet. The profit and loss
                                         account and balance sheet shall be drawn up so as to give respectively a true and fair
                                         view of the profit and loss of the Company for a financial period and a true and fair
                                         view of the assets and liabilities of the Company as at the end of a financial period.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">19.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company may by Resolution of Shareholders call for the accounts to be examined by auditors.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">19.4</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         first auditors shall be appointed by Resolution of Directors; subsequent auditors shall
                                         be appointed by Resolution of Shareholders or by Resolution of Directors.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">19.5</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         auditors may be Shareholders, but no director or other officer shall be eligible to be
                                         an auditor of the Company during their continuance in office.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">19.6</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         remuneration of the auditors of the Company may be fixed by Resolution of Directors.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 30pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">19.7</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         auditors shall examine each profit and loss account and balance sheet required to be
                                         laid before a meeting of the Shareholders or otherwise given to Shareholders and shall
                                         state in a written report whether or not:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">in
                                         their opinion the profit and loss account and balance sheet give a true and fair view
                                         respectively of the profit and loss for the period covered by the accounts, and of the
                                         assets and liabilities of the Company at the end of that period; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">all
                                         the information and explanations required by the auditors have been obtained.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">19.8</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         report of the auditors shall be annexed to the accounts and shall be given to the Shareholders.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">19.9</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Every
                                         auditor of the Company shall have a right of access at all times to the books of account
                                         and vouchers of the Company, and shall be entitled to require from the Directors and
                                         officers of the Company such information and explanations as he thinks necessary for
                                         the performance of the duties of the auditors.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">19.10</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
auditors of the Company shall be entitled to receive notice of, and to attend any meetings of Shareholders at which the Company&rsquo;s
profit and loss account and balance sheet are to be presented</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>20.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NOTICES</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">20.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
                                         notice, information or written statement to be given by the Company to Shareholders may
                                         be given by personal service or by mail addressed to each Shareholder at the address
                                         shown in the Register of Members or by email or facsimile to an email address or facsimile
                                         number notified for that purpose by a Shareholder to the Company.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">20.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
                                         summons, notice, order, document, process, information or written statement to be served
                                         on the Company may be served by leaving it, or by sending it by registered mail addressed
                                         to the Company, at its registered office, or by leaving it with, or by sending it by
                                         registered mail to, the registered agent of the Company.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">20.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Service
                                         of any summons, notice, order, document, process, information or written statement to
                                         be served on the Company may be proved by showing that the summons, notice, order, document,
                                         process, information or written statement was delivered to the registered office or the
                                         registered agent of the Company or that it was mailed in such time as to admit to its
                                         being delivered to the registered office or the registered agent of the Company in the
                                         normal course of delivery within the period prescribed for service and was correctly
                                         addressed and the postage was prepaid.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>21.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>VOLUNTARY
                                         LIQUIDATION</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company may by a Resolution of Shareholders or, subject to the provisions of Article 9.10, by Resolution of Directors appoint
a voluntary liquidator.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>22.</B></FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>CONTINUATION</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company may by Resolution of Shareholders or by a resolution passed unanimously by all Directors of the Company continue as a
company incorporated under the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0"></TD><TD STYLE="width: 27pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>23.</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>UNTRACED
SHAREHOLDERS</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">23.1</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">When
                                         the registered address of any Shareholder appears to the Board to be incorrect or out
                                         of date such Shareholder may, if the Board so resolves, be treated as if he had no registered
                                         address and the Company will not thereafter be obliged to send to such Shareholder cheques,
                                         warrants, notices of meetings or copies of the documents referred to in these Articles;
                                         provided that no resolution as aforesaid shall be proposed by the Board until cheques
                                         or warrants sent to the registered address of such Shareholder have been returned by
                                         the Post Office or left uncashed on at least two consecutive occasions or, following
                                         one such occasion, reasonable enquiries have failed to establish any new address of such
                                         Shareholder.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">23.2</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                         Company shall be entitled to sell at the best price reasonably obtainable any Share of
                                         a Shareholder or any Share to which a person is entitled by transmission if and provided
                                         that:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">for
                                         a period of twelve years in the course of which at least three dividends have become
                                         payable in respect of the Share in question, no cheque or warrant sent by the Company
                                         through the post in a prepaid letter addressed to the Shareholder or to the person entitled
                                         by transmission to the Share at his address on the Register of Members or the other last
                                         known address given by the Shareholder or the person entitled by transmission to which
                                         cheques and warrants are to be sent has been cashed and no communication has been received
                                         by the Company from the Shareholder or the person entitled by transmission; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         Company has at the expiration of the said period of twelve years by advertisement in
                                         both a leading national newspaper and in a newspaper circulating in the area in which
                                         the address referred to in paragraph (a) above is located given notice of its intention
                                         to sell such Share; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 27pt; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                         Company has not during the further period of three months after the date of the advertisement
                                         and prior to the exercise of the power of sale received any communication from the Shareholder
                                         or person entitled by transmission.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="padding: 0; width: 0; text-indent: 0"></TD><TD STYLE="padding: 0; width: 27pt; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">23.3</FONT></TD><TD STYLE="padding: 0; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
                                         give effect to any such sale the Company may appoint any person to execute as transferor
                                         an instrument of transfer of such Share and such instrument of transfer shall be as effective
                                         as if it had been executed by the registered holder of such Share. The Company shall
                                         account to the Shareholder or other person entitled to such Share for the net proceeds
                                         of such sale and shall be deemed to be his debtor and not a trustee for him in respect
                                         of the same. Any money not accounted for to the Shareholder or other person entitled
                                         to such Share shall be carried to a separate account and shall be a permanent debt of
                                         the Company. Money carried to such separate account may either be employed in the business
                                         of the Company or invested in such investments (other than Shares or its holding company,
                                         if any) as the Directors may from time to time think fit.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We,
OFFSHORE INCORPORATIONS LIMITED of P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands for
the purpose of disapplying Part IV of Schedule 2 of the Act hereby sign these Articles of Association the 20th day of November,
2009.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="padding: 0; width: 40%; text-align: left; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Registered</FONT> Agent</TD><TD STYLE="padding: 0; text-align: left; width: 60%; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
</TR>               <TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="padding: 0; text-align: left; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0; text-align: left; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 0; padding-right: 0; padding-left: 0; text-align: left; text-indent: 0">&nbsp;</TD><TD STYLE="padding: 0 0 1.5pt; text-align: left; text-indent: 0">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sgd:
Rexella D. Hodge</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Authorised
Signatory</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">OFFSHORE
INCORPORATIONS LIMITED</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: center; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Exhibit
A</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: center; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Legacy
Shareholders<SUP>1</SUP></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Calvin
Hsu</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chang
Chung &ldquo;Ben&rdquo; Ru</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chang
Trust 2008</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chang
2009 Annuity Trust No. 1</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chang
2009 Annuity Trust No. 2</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chang
2009 Annuity Trust No. 3</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Crystal
Clarity Ltd.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Eagle
Creek Enterprises Limited</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fred
Chang Partners Trust</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jing
&ldquo;James&rdquo; Wu</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Kunal
Thakkar</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Michael
Bullen</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Nabal
Spring, LLC</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tally
Liu</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tekhill
USA LLC</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: left; text-indent: -27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Tzu-Wei
&ldquo;Danny&rdquo; Lee</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<!-- Field: Rule-Page --><DIV STYLE="width: 25%"><DIV STYLE="font-size: 1pt; border-top: Black 1.5pt solid">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: left">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>1</SUP></FONT></TD><TD STYLE="text-align: left">Note to Draft, any Legacy Shareholders who exercise dissenters
rights with respect to all of their Newegg shares in the Merger of Newegg and LLIT shall be excluded from Exhibit A.</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><B>Part
II</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><B>Information
Not Required in the Prospectus </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 45pt"><B>Item 20.</B></TD><TD><B>Indemnification of Directors and Officers </B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">British Virgin Islands
law does not limit the extent to which a company&rsquo;s memorandum and articles of association may provide for indemnification
of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary
to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our memorandum
and articles of association permit indemnification of officers and directors against all actions, proceedings, costs, charges,
expenses, losses, damages or liabilities incurred in connection with the execution of their duties, powers, authorities or discretions
as a director or officer of the Company, unless such losses or damages arise through the willful neglect or default of such directors
or officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the
foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed
in the Securities Act and is therefore unenforceable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 45pt"><B>Item 21.</B></TD><TD><B>Exhibits and Financial Statement Schedules </B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">(a) The following exhibits
are filed herewith or incorporated herein by reference:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="white-space: nowrap; border-bottom: Black 1.5pt solid; width: 9%"><FONT STYLE="font-size: 10pt"><B>Exhibit No</B></FONT></TD>
    <TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; width: 1%">&nbsp;</TD>
    <TD STYLE="text-align: left; white-space: nowrap; border-bottom: Black 1.5pt solid; width: 90%"><FONT STYLE="font-size: 10pt"><B>Description</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> <FONT STYLE="font-size: 10pt">2.1</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <A HREF="#annexa_001"><FONT STYLE="font-size: 10pt">Agreement and Plan of Merger, dated October
    23, 2020, among Lianluo Smart Limited, Newegg Inc. and Lightning Delaware Sub, Inc. (included as Annex A to the proxy statement/prospectus
    forming part of this registration statement) </FONT></A> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">3.1</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020032934/ea128747ex99-1_lianluosmart.htm"><FONT STYLE="font-size: 10pt">Amended
    and Restated Memorandum and Articles of Association of the Lianluo Smart Limited (incorporated by reference to Exhibit 99.1
    to the Report of Foreign Private Issuer on Form 6-K filed on October 23, 2020)</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">4.1</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020003678/f6k021320ex4-1_lianluosmart.htm"><FONT STYLE="font-size: 10pt">Form
    of Class A Common Share Purchase Warrant dated February 14, 2020 (incorporated by reference to Exhibit 4.1 of the Report of
    Foreign Private Issuer on Form 6-K filed on February 13, 2020)</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">4.2</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020005053/ea119108ex4-2_lianluosmart.htm"><FONT STYLE="font-size: 10pt">Form
    of Amended and Restated Class A Common Share Purchase Warrant dated February 25, 2020 (incorporated by reference to Exhibit
    4.2 of the Report of Foreign Private Issuer on Form 6-K filed on February 28, 2020)</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">4.3</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020005053/ea119108ex4-1_lianluosmart.htm"><FONT STYLE="font-size: 10pt">Form
    of Class A Common Share Purchase Warrant dated March 2, 2020 (incorporated by reference to Exhibit 4.1 of the Report of Foreign
    Private Issuer on Form 6-K filed on February 28, 2020)</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">4.4</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020003678/f6k021320ex10-1_lianluosmart.htm"><FONT STYLE="font-size: 10pt">Form
    of Securities Purchase Agreement dated February 12, 2020 (incorporated by reference to Exhibit 10.1 of the Report of Foreign
    Private Issuer on Form 6-K filed on February 13, 2020)</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">4.5</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020004647/f6k022420ex10-1_lianluo.htm"><FONT STYLE="font-size: 10pt">Form
    of Securities Purchase Agreement dated February 21, 2020 (incorporated by reference to Exhibit 10.1 of the Report of Foreign
    Private Issuer on Form 6-K filed on February 24, 2020)</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">4.6</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020005053/ea119108ex10-1_lianluosmart.htm"><FONT STYLE="font-size: 10pt">Form
    of Securities Purchase Agreement dated February 27, 2020 (incorporated by reference to Exhibit 10.1 of the Report of Foreign
    Private Issuer on Form 6-K filed on February 28, 2020)</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD>4.7</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020033122/ea127429ex4-3_lianluo.htm" STYLE="-sec-extract: exhibit">Form
    of Amended and Restated Shareholders Agreement (incorporated by reference to Exhibit 4.3 of the Registration Statement on
    Form F-1 filed on October 26, 2020)</A></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">5.1**</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Opinion of Conyers Dill &amp; Pearman regarding validity of the
    shares being registered hereunder</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> 8.1 </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <A HREF="ea132004ex8-1_lianluosmart.htm">Opinion of Potomac Law Group regarding certain U.S. tax matters</A> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD> <FONT STYLE="font-size: 10pt">10.1</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <A HREF="#annexe_001"><FONT STYLE="font-size: 10pt">Equity Transfer Agreement, dated October
    23, 2020, among Beijing Fenjin Times Technology Development Co., Ltd., Lianluo Connection Medical Wearable Device Technology
    (Beijing) Co., Ltd. and Lianluo Smart Limited (included as Annex E to the proxy statement/prospectus forming part of this
    registration statement)</FONT></A> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">10.2</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020033122/ea127429ex10-7_lianluo.htm" STYLE="-sec-extract: exhibit">Revolving
    Credit and Security Agreement, dated July 27, 2018, by and among East West Bank, PNC Bank, National Association, Newegg Inc.
    and Newegg Inc.&rsquo;s subsidiaries (incorporated by reference to Exhibit 10.7 of the Registration Statement on Form F-1
    filed on October 26, 2020)</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">10.3</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020033122/ea127429ex10-12_lianluo.htm" STYLE="-sec-extract: exhibit">First
    Amendment to Revolving Credit and Security Agreement, dated January 2019 (incorporated by reference to Exhibit 10.12 of the
    Registration Statement on Form F-1 filed on October 26, 2020)</A></FONT></TD></TR>
</TABLE>


<P STYLE="margin: 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; width: 9%"> <FONT STYLE="font-size: 10pt"><B>Exhibit No</B></FONT> </TD>
    <TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; width: 1%"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left; white-space: nowrap; width: 90%"> <FONT STYLE="font-size: 10pt"><B>Description</B></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> <FONT STYLE="font-size: 10pt">10.4</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020033122/ea127429ex10-13_lianluo.htm" STYLE="-sec-extract: exhibit">Second
    Amendment to Revolving Credit and Security Agreement and Consent, dated November 18, 2019 (incorporated by reference to Exhibit
    10.13 of the Registration Statement on Form F-1 filed on October 26, 2020)</A></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD> <FONT STYLE="font-size: 10pt">10.5</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020033122/ea127429ex10-8_lianluo.htm" STYLE="-sec-extract: exhibit">Pledge
    Agreement, dated July 27, 2018, by and among PNC Bank, National Association, Newegg Inc. and Newegg Inc.&rsquo;s subsidiaries
    (incorporated by reference to Exhibit 10.8 of the Registration Statement on Form F-1 filed on October 26, 2020)</A></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> <FONT STYLE="font-size: 10pt">10.6</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020033122/ea127429ex10-9_lianluo.htm" STYLE="-sec-extract: exhibit">Pledge
    and Security Agreement, dated July 27, 2018, by and among PNC Bank, National Association and Newegg Canada Inc. (incorporated
    by reference to Exhibit 10.9 of the Registration Statement on Form F-1 filed on October 26, 2020)</A></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD> <FONT STYLE="font-size: 10pt">10.7</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020033122/ea127429ex10-10_lianluo.htm" STYLE="-sec-extract: exhibit">Pledge
    and Security Agreement, dated July 27, 2018, by and among PNC Bank, National Association and Newegg Inc.&rsquo;s subsidiaries
    (incorporated by reference to Exhibit 10.10 of the Registration Statement on Form F-1 filed on October 26, 2020)</A></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> <FONT STYLE="font-size: 10pt">10.8</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020033122/ea127429ex10-11_lianluo.htm" STYLE="-sec-extract: exhibit">Guaranty
    and Suretyship Agreement, dated July 27, 2018, by and among East West Bank and Newegg Inc.&rsquo;s subsidiaries (incorporated
    by reference to Exhibit 10.11 of the Registration Statement on Form F-1 filed on October 26, 2020)</A></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD> <FONT STYLE="font-size: 10pt">10.9</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020033122/ea127429ex10-6_lianluo.htm" STYLE="-sec-extract: exhibit">Form
    of Employment Agreement (incorporated by reference to Exhibit 10.6 of the Registration Statement on Form F-1 filed on October
    26, 2020)</A></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> 10.10 </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000114420411071774/v244049_ex99-1.htm">Lianluo Smart Limited 2009 Share Incentive Plan (incorporated by reference to Exhibit 99.1 of the Registration Statement on Form S-8 filed on December 28, 2011)</A> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD> <FONT STYLE="font-size: 10pt">10.11</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000114420414057866/v388937_ex99-1.htm">Lianluo Smart Limited 2013 Share Incentive Plan (incorporated by reference to Exhibit 99.1 of the Registration Statement on Form S-8 filed on September 25, 2014)</A></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> <FONT STYLE="font-size: 10pt">10.12</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000114420414057866/v388937_ex99-2.htm">Lianluo Smart Limited 2014 Share Incentive Plan (incorporated by reference to Exhibit 99.2 of the Registration Statement on Form S-8 filed on September 25, 2014)</A></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD> <FONT STYLE="font-size: 10pt">10.13</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020033122/ea127429ex10-4_lianluo.htm" STYLE="-sec-extract: exhibit">Newegg
    Inc. Fourth Amended and Restated 2005 Incentive Award Plan (incorporated by reference to Exhibit 10.4 of the Registration
    Statement on Form F-1 filed on October 26, 2020)</A></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> <FONT STYLE="font-size: 10pt">10.14</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020033122/ea127429ex10-5_lianluo.htm" STYLE="-sec-extract: exhibit">Newegg
    Inc. Significant Shareholder Incentive Program (incorporated by reference to Exhibit 10.5 of the Registration Statement on
    Form F-1 filed on October 26, 2020)</A></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD> <FONT STYLE="font-size: 10pt">21.1</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020033126/ea127468ex21-1_lianluosmart.htm">Subsidiaries of Lianluo Smart Limited (incorporated by reference to Exhibit 21.1 of the Registration Statement on Form F-4 filed on October 26, 2020)</A></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> <FONT STYLE="font-size: 10pt">23.1</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 10pt"><A HREF="ea132004ex23-1_lianluosmart.htm">Consent of Centurion ZD CPA &amp; Co. (successor of Centurion ZD CPA Limited), Independent Registered Public Accounting Firm</A></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD> <FONT STYLE="font-size: 10pt">23.2</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 10pt"><A HREF="ea132004ex23-2_lianluosmart.htm">Consent of BDO China Shu Lun Pan Certified Public Accountants LLP, Independent Registered Public Accounting Firm</A></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> <FONT STYLE="font-size: 10pt">23.3</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <A HREF="ea132004ex23-3_lianluosmart.htm"><FONT STYLE="font-size: 10pt">Consent of BDO USA,
    LLP, Independent Registered Public Accounting Firm</FONT></A> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD> <FONT STYLE="font-size: 10pt">23.4</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 10pt"><A HREF="ea132004ex23-4_lianluosmart.htm">Consent of KPMG LLP, Independent Registered Public Accounting Firm</A></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> <FONT STYLE="font-size: 10pt">23.5**</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 10pt">Consent of Conyers Dill &amp; Pearman (included in Exhibit 5.1)</FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD> 23.6 </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <A HREF="ea132004ex8-1_lianluosmart.htm">Consent of Potomac Law Group (include in Exhibit 8.1)</A> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">24.1*</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020033126/ea127468-f4_lianluosmart.htm#POA">Power of Attorney</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD> <FONT STYLE="font-size: 10pt">99.1*</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020033126/ea127468ex99-1_lianluosmart.htm">Consent of The Benchmark Company, LLC Related to Merger</A></FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD> 99.2* </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> <A HREF="http://www.sec.gov/Archives/edgar/data/1474627/000121390020033126/ea127468ex99-2_lianluosmart.htm">Consent of The Benchmark Company, LLC Related to Disposition</A> </TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: left">&nbsp;</P>

<!-- Field: Rule-Page --><DIV STYLE="margin-top: 0; margin-bottom: 0; width: 25%"><DIV STYLE="font-size: 1pt; border-top: Black 1.5pt solid">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: left"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17.3pt"> * </TD><TD> Previously filed. </TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 17.3pt">**</TD><TD>To be filed by amendment.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">(b) Financial Statement
Schedules</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">All financial statement
schedules are omitted because the information called for is not required or is shown either in the consolidated financial statements
or in the notes thereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 45pt"><B>Item 22.</B></TD><TD><B>Undertakings </B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">The undersigned registrant
hereby undertakes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">(1) To file, during any
period in which offers or sales are being made, a post-effective amendment to this registration statement:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-indent: 0.5in">(i)
To include any prospectus required by section 10(a)(3) of the Act;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-indent: 0.5in">(ii)
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent&nbsp;post-effective
amendment&nbsp;thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth
in the &ldquo;Calculation of Registration Fee&rdquo; table in the effective registration statement; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-indent: 0.5in">(iii)
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">(2) That, for the purpose
of determining any liability under the Act, each such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">(3) To remove from registration
by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">(4) To file a post-effective
amendment to the registration statement to include any financial statements required by Item 8.A of Form&nbsp;20-F&nbsp;at the
start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by
Section&nbsp;10(a)(3) of the Act need not be furnished,&nbsp;<I>provided</I>&nbsp;that the registrant includes in the prospectus,
by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information
necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">(5) That, for the purpose
of determining liability under the Act to any purchaser:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-indent: 0.5in">(i)
Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included
in the registration statement as of the date it is first used after effectiveness.&nbsp;<I>Provided, however,</I>&nbsp;that no
statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated
or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will,
as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in
the registration statement or prospectus that was part of the registration statement or made in any such document immediately
prior to such date of first use.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">The undersigned registrant
hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant&rsquo;s
annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan&rsquo;s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated
by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">The undersigned registrant
hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus
which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of
Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration
form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other
Items of the applicable form.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">The registrant undertakes
that every prospectus (i)&nbsp;that is filed pursuant to the immediately preceding paragraph, or (ii)&nbsp;that purports to meet
the requirements of Section&nbsp;10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule
415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Insofar as indemnification
for liabilities arising under the Act may be permitted to directors, officers and controlling persons of the registrant pursuant
to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such
issue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">The undersigned registrant
hereby undertakes: (i)&nbsp;to respond to requests for information that is incorporated by reference into the prospectus pursuant
to Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents
by first class mail or other equally prompt means and (ii)&nbsp;to arrange or provide for a facility in the United States for
the purpose of responding to such requests. The undertaking in subparagraph (i)&nbsp;above includes information contained in documents
filed subsequent to the effective date of the registration statement through the date of responding to the request.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">The undersigned registrant
hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction and the company being
acquired involved therein, that was not the subject of and included in the registration statement when it became effective.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"> Pursuant to the requirements
of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Beijing, China, on December 23, 2020. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt"><B>LIANLUO SMART LIMITED</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 1.5pt; width: 60%">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; width: 4%"><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 36%"><FONT STYLE="font-size: 10pt">/s/ Bin Lin</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Bin Lin, Chief Executive Officer </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">Pursuant to the requirements
of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the
dates indicated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; width: 24%"> <FONT STYLE="font-size: 10pt"><B>Signature</B></FONT> </TD>
    <TD STYLE="padding-bottom: 1.5pt; width: 1%"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; width: 57%"> <FONT STYLE="font-size: 10pt"><B>Title</B></FONT> </TD>
    <TD STYLE="padding-bottom: 1.5pt; width: 1%"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; width: 17%"> <FONT STYLE="font-size: 10pt"><B>Date</B></FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> &nbsp; </TD></TR>
<TR>
    <TD STYLE="border-bottom: Black 1.5pt solid; vertical-align: bottom"><P STYLE="margin: 0pt 0"> * </P></TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-size: 10pt">Chairman and Chief Executive Officer (Principal Executive
    Officer)</FONT> </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-size: 10pt">December 23<FONT STYLE="font-family: Times New Roman, Times, Serif">,
    </FONT>2020</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"> <FONT STYLE="font-size: 10pt">Bin Lin</FONT> </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> &nbsp; </TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> &nbsp; </TD></TR>
<TR>
    <TD STYLE="border-bottom: Black 1.5pt solid; vertical-align: bottom"><P STYLE="margin: 0pt 0"> * </P></TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-size: 10pt">Director and Interim Chief Financial Officer (Principal Financial
    and Accounting Officer)</FONT> </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-size: 10pt">December 23<FONT STYLE="font-family: Times New Roman, Times, Serif">,
    </FONT>2020</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"> <FONT STYLE="font-size: 10pt">Yingmei Yang</FONT> </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> &nbsp; </TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> &nbsp; </TD></TR>
<TR>
    <TD STYLE="border-bottom: Black 1.5pt solid; vertical-align: bottom"><P STYLE="margin: 0pt 0"> * </P></TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-size: 10pt">Director</FONT> </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-size: 10pt">December 23<FONT STYLE="font-family: Times New Roman, Times, Serif">,
    </FONT>2020</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"> <FONT STYLE="font-size: 10pt">Richard Zhiqiang Chang</FONT> </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> &nbsp; </TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> &nbsp; </TD></TR>
<TR>
    <TD STYLE="border-bottom: Black 1.5pt solid; vertical-align: bottom"><P STYLE="margin: 0pt 0"> * </P></TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-size: 10pt">Director</FONT> </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-size: 10pt">December 23<FONT STYLE="font-family: Times New Roman, Times, Serif">,
    </FONT>2020</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"> <FONT STYLE="font-size: 10pt">Bin Pan</FONT> </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> &nbsp; </TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> &nbsp; </TD></TR>
<TR>
    <TD STYLE="border-bottom: Black 1.5pt solid; vertical-align: bottom"><P STYLE="margin: 0pt 0"> * </P></TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-size: 10pt">Director</FONT> </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> <FONT STYLE="font-size: 10pt">December 23<FONT STYLE="font-family: Times New Roman, Times, Serif">,
    </FONT>2020</FONT> </TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"> <FONT STYLE="font-size: 10pt">Fuya Zheng</FONT> </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> &nbsp; </TD>
    <TD STYLE="vertical-align: bottom"> &nbsp; </TD>
    <TD STYLE="vertical-align: top"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT> </TD>
    <TD STYLE="width: 4%"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</FONT> </TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; width: 33%"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
    Bin Lin</FONT> </TD>
    <TD STYLE="width: 60%"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="white-space: nowrap"> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Bin Lin</FONT> </TD>
    <TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Attorney-In-Fact</FONT> </TD>
    <TD> &nbsp; </TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><B>SIGNATURE
OF AUTHORIZED REPRESENTATIVE IN THE UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: left; text-indent: 0.5in"> Pursuant
to the requirements of the Securities Act of 1933, the Registrant&rsquo;s duly authorized representative has signed this registration
statement on Form F-4 in the City of New York, New York, on December 23, 2020. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 3in">&nbsp;</P>

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<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt"><B>COGENCY GLOBAL INC.</B></FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; width: 60%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 4%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 36%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1.5pt solid"><FONT STYLE="font-size: 10pt">/s/ Colleen A. De Vries</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Name: Colleen A. De Vries</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">Title: Senior Vice President</FONT></TD></TR>
</TABLE>
<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">II-6</P>

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<DOCUMENT>
<TYPE>EX-8.1
<SEQUENCE>2
<FILENAME>ea132004ex8-1_lianluosmart.htm
<DESCRIPTION>OPINION OF POTOMAC LAW GROUP REGARDING CERTAIN U.S. TAX MATTERS
<TEXT>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>Exhibit 8.1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><IMG SRC="ex8-1_001.jpg" ALT=""></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Potomac Law Group, PLLC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">1300 Pennsylvania Avenue, NW, Suite 700</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Washington, D.C. 20004</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Telephone: (202) 204-3005</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Fax: (202) 318-7707</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">December 23, 2020</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Lianluo Smart Limited</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Room 611, 6<SUP>th</SUP> Floor, BeiKong Technology Building,
No 10 Baifuquan Road</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Changping District, Beijing, 102200</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">People&rsquo;s Republic of China</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Re: Agreement and Plan of Merger, dated as of October 23, 2020</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Ladies and Gentlemen:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We have acted as tax counsel to Lianluo
Smart Limited, a British Virgin Islands corporation in connection with the preparation and filing with the Securities and Exchange
Commission (the &ldquo;Commission&rdquo;) of the Registration Statement on Form&nbsp;F-4, File No. 333-249660, initially filed
with the Commission on October 26, 2020 (as amended from time to time, the &ldquo;Registration Statement&rdquo;) under the Securities
Act of 1933, as amended (the &ldquo;Securities Act&rdquo;), relating to an Agreement and Plan of Merger, dated as of October 23,
2020 (as it may be amended from time to time, the &ldquo;Merger Agreement&rdquo;), by and among Newegg,&nbsp;Inc., a Delaware corporation,
Lianluo Smart Limited and Lightening Delaware Sub,&nbsp;Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Lianluo
Smart Limited. Any capitalized terms used but not defined herein have the meaning given to such terms in the Registration Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0">In so acting, we have examined originals or copies (certified
or otherwise identified to our satisfaction) of: (i)&nbsp;the Registration Statement; (ii)&nbsp;the proxy statement/prospectus
contained in the Registration Statement; and (iii)&nbsp;such other corporate records, agreements, documents and other instruments,
and such other certificates or comparable documents of public officials and of officers and representatives of Lianluo Smart Limited
as we have deemed relevant and necessary as a basis for the opinion hereinafter set forth. In addition, we have obtained such additional
information as we deemed relevant and necessary through consultation with various officers and representatives of Lianluo Smart
Limited.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0">Our opinion set forth below assumes, with your consent: (1)&nbsp;the
accuracy and completeness of the statements and facts concerning the Merger set forth in the Registration Statement, (2)&nbsp;the
consummation of the Merger in the manner contemplated by, and in accordance with the terms set forth in, the Merger Agreement and
Registration Statement, (3)&nbsp;that the representations and covenants are and will continue to be, including as of the Merger
and thereafter, relevant, true and correct without regard to any qualification as to knowledge or belief, (4)&nbsp;that there will
be no change in applicable U.S. federal income tax law from the date hereof through the effective time of the Merger, and (5)&nbsp;that
the Merger will be reported by Lianluo Smart Limited, Newegg, Inc. and their affiliates in a manner consistent with our opinion
set forth below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0">Based upon and subject to the foregoing, and subject to the
qualifications, exceptions, assumptions and limitations stated in the Registration Statement, we are of the opinion that the discussion
set forth in the Registration Statement under &ldquo;U.S. Federal Income Tax Consequences of the Merger&rdquo; and &ldquo;U.S.
Federal Income Tax Consequences for U.S. Holders&rdquo; sets forth the material U.S. federal income tax consequences of the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0">Our opinion is based on current provisions of the Internal Revenue
Code of 1986, as amended, the Treasury Regulations promulgated thereunder, published pronouncements of the Internal Revenue Service
and case law, in each case as in effect on the date hereof and any of which may be changed at any time with retroactive effect.&nbsp;
Any change in applicable laws or facts and circumstances surrounding the Merger, or any inaccuracy in the facts or assumptions
on which we have relied, may affect the continuing validity of the opinion set forth herein.&nbsp; We assume no responsibility
to inform you of any such change or inaccuracy that may occur or come to our attention.&nbsp; No opinion is expressed as to any
transactions other than the Merger or any matter other than those specifically covered by the foregoing opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0">We hereby consent to the filing of this opinion with the Commission
as an exhibit to the Registration Statement. &nbsp;In giving this consent, we do not thereby admit that we are in the category
of persons whose consent is required under Section&nbsp;7 of the Securities Act, or the rules&nbsp;and regulations of the Commission
thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt">Very truly yours,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt">/s/ Potomac Law Group, PLLC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>3
<FILENAME>ea132004ex23-1_lianluosmart.htm
<DESCRIPTION>CONSENT OF CENTURION ZD CPA & CO. (SUCCESSOR OF CENTURION ZD CPA LIMITED), INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
<TEXT>
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<P STYLE="text-align: right; margin: 0"><B>Exhibit 23.1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%; font-size: 10pt"><IMG SRC="ex23-1_001.jpg" ALT="">&nbsp;</TD>
    <TD STYLE="width: 88%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt"><B>&#20013;&#27491;&#36948;</B></FONT><B>&#26371;&#35336;&#24107;&#20107;&#21209;&#25152;</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Centurion ZD CPA &amp;Co.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Certified Public Accountants (Practising)</P></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Unit 1304, 13/F, Two Harbourfront, 22 Tak Fung Street, Hunghom,
Hong Kong.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#39321;&#28207;
&#32005;&#30945; &#24503;&#35920;&#34903;</FONT>22<FONT STYLE="font-family: Times New Roman, Times, Serif">&#34399; &#28023;&#28657;&#24291;&#22580;&#20108;&#26399;
</FONT>13<FONT STYLE="font-family: Times New Roman, Times, Serif">&#27155;</FONT>1304<FONT STYLE="font-family: Times New Roman, Times, Serif">&#23460;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Tel <FONT STYLE="font-family: Times New Roman, Times, Serif">&#38651;&#35441;</FONT>:
(852) 2126 2388 Fax <FONT STYLE="font-family: Times New Roman, Times, Serif">&#20659;&#30495;</FONT>: (852) 2122 9078</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Email <FONT STYLE="font-family: Times New Roman, Times, Serif">&#38651;&#37109;</FONT>:
info@czdcpa.com</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">We consent to the reference to our firm
under the caption &ldquo;Experts&rdquo; and to the inclusion of our report dated May 15, 2019 (except for share combination included
in Note 3, as to which the date is October 26, 2020) relating to the consolidated balance sheet of Lianluo Smart Limited (the &ldquo;Company&rdquo;)
as of December 31, 2018, and the related consolidated statements of operations and comprehensive loss, changes in equity and cash
flows for the two years ended December 31, 2018 and 2017 in the Amendment No. 2 to the Registration Statement (Form F-4 No. 333-249660)
and the related Prospectus of the Company dated December 23, 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">/s/ Centurion ZD CPA &amp; Co.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Centurion ZD CPA &amp; Co.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(successor to Centurion ZD CPA Limited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Hong Kong, China</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">December 23, 2020</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>4
<FILENAME>ea132004ex23-2_lianluosmart.htm
<DESCRIPTION>CONSENT OF BDO CHINA SHU LUN PAN CERTIFIED PUBLIC ACCOUNTANTS LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Exhibit
23.2</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><IMG SRC="ex23-2_001.jpg" ALT="">&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Lianluo
Smart Limited</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Beijing,
China</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
hereby consent to the inclusion in the Registration Statement on Form F-4 of our report dated May 15, 2020, except for share combination
included in Note 3 as to which the date is October 23, 2020, relating to the consolidated financial statements and schedules of
Lianluo Smart Limited (&ldquo;the Company&rdquo;) for the year ended December 31, 2019. Our report contains an explanatory paragraph
regarding the Company&rsquo;s ability to continue as a going concern.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
also consent to the reference to us under the caption &ldquo;Experts&rdquo; in the Registration Statement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
BDO China Shu Lun Pan Certified Public Accountants LLP</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">BDO
China Shu Lun Pan Certified Public Accountants LLP</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Beijing,
China</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">December
23, 2020</FONT></P>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.3
<SEQUENCE>5
<FILENAME>ea132004ex23-3_lianluosmart.htm
<DESCRIPTION>CONSENT OF BDO USA, LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0; text-align: right"><B>Exhibit 23.3</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><U>Consent of Independent
Registered Public Accounting Firm</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Newegg Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">City of Industry, California</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">We hereby consent to the use in the Registration
Statement of our report dated October 23, 2020, except for the retrospective adjustments to the classification of the Series A
and AA convertible preferred stock to temporary equity as to which the date is December 9, 2020, relating to the consolidated financial
statements of Newegg Inc., which is contained in the Registration Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We also consent to the reference to us
under the caption &ldquo;Experts&rdquo; in the Registration Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">/s/ BDO USA, LLP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Los Angeles, California</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">December 23, 2020</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.4
<SEQUENCE>6
<FILENAME>ea132004ex23-4_lianluosmart.htm
<DESCRIPTION>CONSENT OF KPMG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="text-align: right; margin: 0"><B>Exhibit 23.4</B></P>

<P STYLE="margin: 0; text-align: right"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 20pt; text-align: center">Consent of Independent Registered
Public Accounting Firm</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt">The Board of Directors<BR>
Newegg Inc.:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt">We consent to the use of our report dated April 18, 2019,
with respect to the consolidated balance sheet of Newegg Inc. as of December 31, 2018, the related consolidated statements of operations,
comprehensive loss, temporary equity and equity (deficit), and cash flows for each of the years in the two-year period ended December&nbsp;31,
2018, and the related notes, before the effects of the adjustment to retrospectively apply the change in the classification of
the Series A convertible Preferred Stock and Series AA convertible Preferred Stock to temporary equity as described in Note 2(y),
included herein and to the reference to our firm under the heading &ldquo;Experts&rdquo; in the prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: left">/s/ KPMG LLP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0"><FONT STYLE="font-weight: normal">Irvine, California<BR>
December 23, 2020</FONT></P>
<P STYLE="margin: 0; text-align: left"><B>&nbsp;</B></P>

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<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>7
<FILENAME>image_001.jpg
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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
