Exhibit 99.1 

HEBRON TECHNOLOGY CO., LTD

NO. 936, JINHAI 2ND ROAD, KONGGANG NEW AREA

LONGWAN DISTRICT

WENZHOU CITY, ZHEJIANG PROVINCE

PEOPLE’S REPUBLIC OF CHINA

PROXY STATEMENT AND NOTICE OF

SPECIAL MEETING OF SHAREHOLDERS

TO THE SHAREHOLDERS OF HEBRON TECHNOLOGY CO., LTD:

You are cordially invited to attend a special meeting of the shareholders of HEBRON TECHNOLOGY CO., LTD., a British Virgin Islands company (the “ Company ,” “ HEBT ”, “ we ,” “ us ” or “ our ”), which will be held on June 14, 2019 at 10:00 a.m., Beijing time, at our executive offices at No. 936, Jinhai 2nd Road, Konggang New Area, Longwan District, Wenzhou City, Zhejiang Province, China.

At the special meeting, our shareholders will be asked to consider and vote on five (5) proposals:

The Share Transfer Proposal, NiSun Proposal and Option Proposal are conditioned on and contingent on each other. Each of such proposals must be approved for any of such proposals to be approved. Each of the Reverse Split Proposal and Adjournment Proposal can be approved or rejected by shareholders independently of the Share Transfer Proposal, NiSun Proposal and Option Proposal.

If the Share Transfer Proposal, NiSun Proposal and Option Proposal are approved, then on the Closing Date of the Share Purchase Agreement, the Buyer will purchase (i) Wise’s 1,800,000 Class B common shares of the Company, par value $0.001 per share and (ii) Sun Zhang’s 5,978,400 Class B common shares of the Company, which will together constitute approximately 47.8% of all of the Company’s outstanding common shares at the time of the Closing on a fully diluted basis (Wise’s and Sun Zhang’s Class B common shares are referred to as the “Shares”). The Shares will automatically convert into Class A common shares upon transfer from the Sellers to the Buyer, and upon such transfer the Company will have no issued and outstanding Class B common shares. Upon such automatic conversion, the Shares will be entitled to one vote per share. By contrast, the Class B common shares are entitled to five (5) votes per share.

Simultaneously with the sale and transfer of the Shares, the Company will purchase all of the equity of NiSun BVI from NiSun BVI’s sole shareholder, Mr. Bodang Liu, for cash, cash equivalent or promissory note, the amount to be determined based on an assessment by an independent third party business valuation firm. At the same time, new members of the Board of Directors will be elected and new executive officers will be appointed.

Also as part of the transaction, the Company will grant to Sellers or their designee (the “Optionee”) the option (the “Option”) to purchase (a) the Company’s 100% equity interest in Zhejiang Xibolun Automation Project Technology Co., Ltd. (“Xibolun Automation”), (b) the Company’s 100% equity interest in Wenzhou Xibolun Fluid Equipment Co., Limited (“Xibolun Equipment”) and (c) the Company’s 49% equity interest in Xuzhou Weijia Bio-Tech Co., Ltd. (“Weijia Bio-Tech”), Chinese operating subsidiaries of the Company. The purchase price will be based on assessment by an independent third party business valuation firm at the time the Option is exercised. The Option will be granted on the Closing Date of the Share Purchase Agreement upon payment of $50,000 by the Sellers. The Option may be exercised beginning six (6) months following the Closing Date and will expire if not exercised prior to the second anniversary of the Closing Date. To the extent the Option is exercised, such $50,000 will be credited to the purchase price; if not exercised, such amount will be forfeited to the Company.

The Closing Date of the Share Purchase Agreement is expected to occur within five (5) days after the latest of (i) payment for the Shares, (ii) delivery of all closing deliverables and (iii) satisfaction or waiver of closing conditions, including the approval of both classes of common shares of the Company.

We are providing this proxy statement and accompanying proxy card to our shareholders in connection with the solicitation of proxies to be voted at the special meeting and at any adjournments or postponements of the special meeting. Whether or not you plan to attend the special meeting, we urge you to read this proxy statement carefully. Please pay particular attention to the section entitled “Risk Factors” commencing on page 17.  

Whether or not you plan to attend a special meeting, please take the time to vote by completing and mailing the enclosed proxy card in the enclosed envelope. YOUR VOTE IS VERY IMPORTANT.

NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE HEBT COMMON SHARES TO BE TRANSFERRED IN THE SHARE TRANSFER PROPOSAL OR DETERMINED IF THIS PROXY STATEMENT IS ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

Thank you for your participation. We look forward to your continued support.

HEBRON TECHNOLOGY CO., LTD

NO. 936, JINHAI 2ND ROAD, KONGGANG NEW AREA

LONGWAN DISTRICT

WENZHOU CITY, ZHEJIANG PROVINCE

PEOPLE’S REPUBLIC OF CHINA

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON JUNE 14, 2019

YOUR VOTE IS VERY IMPORTANT

PLEASE VOTE YOUR SHARES PROMPTLY

NOTICE IS HEREBY GIVEN, that you are cordially invited to attend a special meeting (the “ Special Meeting ”) of shareholders of HEBRON TECHNOLOGY CO., LTD, to be held at 10:00 a.m., Beijing time, on June 14, 2019, at our executive offices at No. 936, Jinhai 2nd Road, Konggang New Area, Longwan District, Wenzhou City, Zhejiang Province, China, in order to consider and vote upon the below proposals.

After careful consideration, the Company’s board of directors has determined the transactions are fair to and in the best interests of the Company and its shareholders and unanimously recommends that you vote or give instruction to vote:

(1) “ FOR ” the Reverse Split Proposal : a proposal to approve a reverse split of the Company’s common shares in a ratio to be determined by our Board of Directors of between two and ten currently outstanding common shares being converted into one common share, with the exact ratios to be determined by the Board of Directors in its sole discretion.

(2) “ FOR ” the Share Transfer Proposal : a proposal to approve the transfer by Wise Metro Development Co., Ltd., a British Virgin Islands company (“Wise”) and Mr. Zuoqiao Sun Zhang, a citizen of Guatemala (“Sun Zhang”; and together with Wise, “Sellers”) of all of such Sellers’ Class B common shares of the Company to NiSun International Enterprise Management Group Co., Ltd., a company organized under the laws of Cayman Islands (the “Buyer”).

(3) “ FOR ” the NiSun Proposal : a proposal for the Company to purchase for cash, cash equivalents or promissory note all of the equity of NiSun International Enterprise Management Group (British Virgin Islands) Co., Ltd., a British Virgin Islands company (“NiSun BVI”), focused on the provision of certain financial services.

(4) “ FOR ” the Option Proposal : a proposal for Sellers or their designee (the “Optionee”) to acquire an option to purchase (a) the Company’s 100% equity interest in Zhejiang Xibolun Automation Project Technology Co., Ltd. (“Xibolun Automation”), (b) the Company’s 100% equity interest in Wenzhou Xibolun Fluid Equipment Co., Limited (“Xibolun Equipment”) and (c) the Company’s 49% equity interest in Xuzhou Weijia Bio-Techn Co., Ltd. (“Weijia Bio-Tech”), Chinese operating subsidiaries of the Company.

(5) “ FOR ” the Adjournment Proposal : a proposal to adjourn the special meeting to a later meeting date if needed to permit the further solicitation of proxies if management determines that there are insufficient votes and proxies to approve one or more of the Reverse Split Proposal, Share Transfer Proposal, NiSun Proposal and Option Proposal.

These items of business are described in the attached proxy statement, which we encourage you to read in its entirety before voting. Only holders of record of the Company’s common shares at the close of business on May 14, 2019 are entitled to notice of the Special Meeting and to vote and have their votes counted at the Special Meeting and any adjournments or postponements of the Special Meeting.

The affirmative vote of the holders of a majority of votes cast by our common shares that are present in person or by proxy at our special meeting is required to approve the Reverse Split Proposal, provided we have quorum for the meeting. For the Reverse Split Proposal, Class A shares will have one vote per share, Class B shares will have five votes per share, and Class A and Class B shares will be counted as a single group, with a majority of the group required for approval.

The affirmative vote of the holders of a majority of votes cast by each class of our common shares that are present in person or by proxy at our special meeting is required to approve the Share Transfer Proposal, NiSun Proposal and Option Proposal. For the Share Transfer Proposal, NiSun Proposal and Option Proposal, Class A shares will have one vote per share, Class B shares will have five votes per share, and Class A and Class B shares will be counted separately, with a majority of each class required for approval.

Approval of the Adjournment Proposal whether or not a quorum is present, requires the affirmative vote of a majority of the votes cast by our shareholders entitled to vote.

Abstentions and broker non-votes will count for purposes of determining quorum but will have no effect on the outcome of the vote because abstentions and broker non-votes do not count as votes cast.

After careful consideration, the Company’s board of directors has determined that the Share Transfer Proposal, NiSun Proposal, Option Proposal, Reverse Split Proposal and Adjournment Proposal are fair to and in the best interests of the Company and its stockholders and unanimously recommends that you vote or give instruction to vote:

YOUR VOTE IS IMPORTANT

WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING IN PERSON, WE ENCOURAGE YOU TO SUBMIT YOUR PROXY AS PROMPTLY AS POSSIBLE (1) BY TELEPHONE, (2) THROUGH THE INTERNET OR (3) BY MARKING, SIGNING AND DATING THE ENCLOSED PROXY CARD AND RETURNING IT IN THE POSTAGE-PAID ENVELOPE PROVIDED. You may revoke your proxy or change your vote at any time before the Special Meeting. If your shares are held in the name of a bank, broker or other nominee, please follow the instructions on the voting instruction card furnished to you by such bank, broker or other nominee, which is considered the shareholder of record, in order to vote. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account. Your broker or other agent cannot vote on these proposals.

If you fail to return your proxy card, grant your proxy electronically over the Internet, or by telephone, or vote by ballot in person at the Special Meeting, your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting. If you are a shareholder of record, voting in person by ballot at the Special Meeting will revoke any proxy that you previously submitted. If you hold your shares through a bank, broker or other nominee, you must obtain from the record holder a valid “legal” proxy issued in your name in order to vote in person at the Special Meeting.

Thank you for your participation. We look forward to your continued support.

Annex A: Share Purchase Agreement

Annex B: Appraisal of NiSun BVI

Annex C: Form of Call Option Agreement

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS  

The following are answers to some questions that you, as a shareholder of Hebron Technology Co., Ltd (“HEBT” or the “Company”), may have regarding the Agreement and related matters being considered at HEBT’s Special Meeting, which is referred to herein as the “ Special Meeting”.

Positive Factors

Negative Factors

Accordingly, if the NiSun BVI acquisition is not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of your HEBT common shares. If the NiSun BVI acquisition is not completed, HEBT’s Board of Directors will continue to evaluate and review the Company’s business operations, properties, dividend policy and capitalization, among other things, make such changes as are deemed appropriate and continue to seek to identify strategic alternatives to enhance stockholder value.

Please read with particular care the detailed description of the risks described in “Risk Factors” beginning on page 17 of this proxy statement.

To complete the acquisition of NiSun BVI, the following conditions must be satisfied:

To complete the issuance of the Option, the following conditions must be satisfied:

Finally, the representations and warranties of all of the parties to the Share Purchase Agreement must be true and accurate as of the time of closing under such agreement.

To complete a Reverse Split, the following conditions must be satisfied:

If you are a registered shareholder, meaning that you hold your shares in certificate form, you have four voting options:

If you hold your shares through an account with a bank or broker, your ability to vote by the Internet depends on their voting procedures. Please follow the directions that your bank or broker provides.

For a discussion of the rules regarding the voting of shares held by beneficial owners, please see the question below entitled “If I am a beneficial owner of HEBT common shares, what happens if I don’t provide voting instructions? What is discretionary voting? What is a broker non-vote?”

FORWARD-LOOKING STATEMENTS  

This proxy statement, including information incorporated by reference into this proxy statement, contains forward-looking statements regarding, among other things, HEBT’s plans, strategies and prospects, both business and financial. Although HEBT believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, HEBT cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions including, without limitation, the factors described under “ Risk Factors ” from time to time in HEBT’s filings with the SEC. Many of the forward-looking statements contained in this presentation may be identified by the use of forward-looking words such as “believe”, “expect”, “anticipate”, “should”, “planned”, “will”, “may”, “intend”, “estimated”, “aim”, “on track”, “target”, “opportunity”, “tentative”, “positioning”, “designed”, “create”, “predict”, “project”, “seek”, “would”, “could”, “continue”, “ongoing”, “upside”, “increases” and “potential”, among others. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this presentation are set forth in other reports or documents that we file from time to time with the SEC, and include, but are not limited to: 

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this proxy statement. All forward-looking statements included herein attributable to any of HEBT, NiSun BVI or any person acting on either party’s behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable laws and regulations, HEBT and NiSun BVI have no obligation to update these forward-looking statements to reflect events or circumstances after the date of this proxy statement or to reflect the occurrence of unanticipated events.

Before a stockholder grants its proxy or instructs how its vote should be cast regarding the Reverse Split Proposal, Share Transfer Proposal, NiSun Proposal, Option Proposal or Adjournment Proposal, they should be aware that the occurrence of the events described in the “ Risk Factors ” section and elsewhere in this proxy statement may adversely affect HEBT and NiSun BVI.

SUMMARY  

This summary highlights selected information from this proxy statement and does not contain all of the information that is important to you. To better understand the proposals to be submitted for a vote at the Special Meeting, including the Share Transfer Proposal, NiSun Proposal and Option Proposal, you should read this entire document carefully, including the Share Purchase Agreement attached as Annex A to this proxy statement. It is also described in detail in this proxy statement in the section entitled “The Share Purchase Agreement.”

The Parties to the Share Purchase Agreement

The Sellers are the only Class B shareholders of the Company. Because the Class B common shares are entitled to five votes per share, compared with one vote per share of the Class A common shares and because Class B common shares constitute 7,778,400 out of 16,269,577 total outstanding HEBT common shares, the holders of Class B common shares have more than 80% of the total voting power of the Company’s common shares. In addition, Mr. Anyuan Sun, Chief Executive Officer of HEBT, is the beneficial owner of the shares held by the Sellers because he is the sole member of Wise and the son of Sun Zhang, who holds shares on behalf of Mr. Sun.

The Buyer is a Cayman Islands company, of which Mr. Bodang Liu is the sole shareholder. Mr. Liu is also the sole shareholder of NiSun International Enterprise Management Group (British Virgin Islands) Co., Ltd., a British Virgin Islands company (“NiSun BVI”), focused on the provision of certain financial services. If the Share Purchase Proposal and NiSun Proposal are both approved, then the Sellers will sell their Class B common shares to an entity wholly owned by Mr. Liu while HEBT purchases all of the equity of a separate entity also wholly owned by Mr. Liu.

Background of the Transaction

In January 2019, representatives from the Buyer approached Mr. Anyuan Sun to explore the opportunity to purchase the Sellers’ common shares in the Company because he is the beneficial owner of such shares. Based on informal and preliminary communications between these parties, it was determined that the Company would need to be involved in any discussions.

On or about February 12, 2019, the Company met with advisors to begin evaluating a proposal by which the Buyer would purchase the Sellers’ common shares in the Company, elect several members to the Company’s Board of Directors and senior management, cause the Company to acquire NiSun BVI and grant an option to the designee of the Sellers to acquire the equity interest in certain operating subsidiaries of the Company in the future.

Subsequent discussions were held with the Company’s advisors between February 20, 2019 and February 22, 2019. Following extensive negotiations among Sellers, Buyer and the Company, the parties reached key deal terms for a proposed agreement in mid-March 2019. Given the interest of Sellers and Mr. Sun in the transaction, Mr. Sun and Sun Zhang recused themselves from participation in the Board’s discussions and voting on these matters.

On April 15, 2019, the independent members of the Company’s Board of Directors met to discuss the Securities Purchase Agreement and terms of the share transfer, acquisition of NiSun BVI and grant of the option to the designee of the Sellers. The Board was advised and considered the facts that entry into the Securities Purchase Agreement would involve related party transactions, as Mr. Sun is the Chief Executive Officer and largest beneficial shareholder of the Company and would have the ability to designate the recipient of the option. The Board further understood that the Sellers’ shares would be transferred to the Buyer, an entity controlled by Mr. Liu, who also owns NiSun BVI, the entity the Company would acquire in connection with the entry into the Securities Purchase Agreement.

Following this meeting and subsequent discussions with advisors and internally over the next day, the Board of Directors unanimously approved entry into the Securities Purchase Agreement on April 16, 2019.

Of key importance to the Company’s Board of Directors was that prior to becoming effective and binding on the Company, the Securities Purchase Agreement would be submitted to the Company’s shareholders for approval. In addition, due to the significant voting power of the Class B shareholders and the fact that the beneficial owner of the Class B shares would obtain an option to purchase certain assets of the Company, the Board determined that it was in the best interest of the Company and its shareholders to require that shareholder approval of the Share Transfer Proposal, NiSun Proposal and Option Proposal be obtained for each class of common shares and that a failure of the Class A shareholders to approve such proposals would result in such proposals failing, notwithstanding the fact that the Class B shareholders hold more than 80% of the total voting power of the Company.

Pre-Proposal Structure – HEBT

As of the date of this proxy, HEBT consists of the following entities:

Pre-Proposal Structure – NiSun BVI

As of the date of this proxy, NiSun BVI consists of the following entities:

NiSun BVI Reorganization

NiSun BVI, through a series of transactions which is accounted for as a reorganization of entities under common control (the “Reorganization”), became the ultimate parent entity of its subsidiaries and its variable interest entity (“VIE”), Fintech. Accordingly, NiSun BVI consolidates Fintech’s operations, assets and liabilities. Since the Reorganization is considered under common control, it is accounted for as a recapitalization. Accordingly NiSun BVI’s consolidated financial statements reflect the historical operations as if the current organization structure had been in existence throughout the periods presented.

NiSun BVI, through its subsidiaries and VIE, is engaging in providing online recommendation services of institutional financial products through its online marketplace in PRC.

The following transactions were undertaken to reorganize the legal structure of NiSun BVI.

Effective on May 17, 2019, shareholders of Fintech and WFOE entered into a series of contractual agreements (“VIE Agreements” which are described below). As a result, NiSun BVI, through its wholly owned subsidiaries, NiSun HK and WFOE, has been determined to be the primary beneficiary of Fintech and NiSun BVI treats Fintech as a VIE.

Since NiSun BVI and its subsidiaries and VIE are effectively controlled by the same group of the shareholders before and after the reorganization, they are considered under common control. The above mentioned transactions were accounted for as a

recapitalization. The consolidation of NiSun BVI and its subsidiaries and VIE has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the consolidated financial statements.

The VIE arrangements regarding Fintech

Foreign ownership of internet-based businesses, including distribution of online information is subject to restrictions under current PRC laws and regulations. NiSun BVI is a British Virgin Islands company and WFOE (its PRC subsidiary) is considered foreign invested enterprise. To comply with these regulations, NiSun BVI conducts the majority of its activities in PRC through its VIE, Fintech.

WFOE has entered into the following contractual arrangements with shareholders of Fintech, that enable NiSun BVI to (1) have power to direct the activities that most significantly affects the economic performance of Fintech, and (2) receive the economic benefits of Fintech that could be significant to Fintech. NiSun BVI is fully and exclusively responsible for the management of Fintech, assumes all of risk of losses of Fintech and has the exclusive right to exercise all voting rights of Fintech’s shareholder. Therefore, in accordance with ASC 810 “Consolidation”, NiSun BVI is considered the primary beneficiary of Fintech and has consolidated Fintech’s assets, liabilities, results of operations, and cash flows in the accompanying consolidated financial statements.

Consulting Service Agreement.

Under the Consulting Services Agreement dated May 17, 2019, WFOE has the exclusive right to provide management and consulting and other services to Fintech for a consulting service fee from Fintech and agrees to authorize Fintech to use the trademarks, technologies and related intellectual property rights held by WFOE. Fintech agrees to pay WFOE or the designated agent of WFOE for the management and consulting service in the amount equivalent to all Fintech’s net profits after tax. The agreement shall be effective as of the date of agreement and shall remain effective until the date when WFOE terminates such agreement or Fintech ceases to exist.

Equity Pledge Agreements

Pursuant to the Equity Pledge Agreements dated May 17, 2019, each shareholder of Fintech agreed to pledge his equity interest in Fintech to WFOE to secure nominal loans provided to the shareholders of Fintech for a loan term of 100 years. Each shareholder of Fintech agrees that the repayment of loan can only happen on loan maturity date or WFOE agrees to collect the loan repayment. If Fintech or its shareholders breach their contractual obligations under these agreements, WFOE, as pledgee, will have the right to dispose of the pledged equity interests and will have priority in receiving the proceeds from the auction or sale of the pledged equity interests. WFOE is entitled to any dividends declared or paid in connection with the pledged equity interests during the term of this agreement. Fintech and its shareholders have further agreed that they will not transfer or encumber the pledged equity interests without the prior written consent from WFOE during the term of this agreement. The Equity Pledge Agreement remains effective and no provision of this agreement may be amended, modified, supplemented discharged or terminated unless all parties consent thereto in writing.

Voting Rights Proxy Agreement.

Under the Voting Rights Proxy Agreement, each shareholder of Fintech irrevocably authorizes WFOE to exercise rights and powers as the shareholder of Fintech, including but not limited to, convening and attending shareholders’ meetings, voting on all matters of Fintech requiring shareholder approval and appointing directors and senior management members. The Voting Rights Proxy Agreement will remain in force unless otherwise terminated in writing by WFOE or with the written consent of all parties.

Exclusive Call Option Agreement.

Under the Exclusive Call Option Agreement dated May 17, 2019, Fintech and its shareholders have irrevocably granted WFOE an exclusive option to purchase, or authorize its designated persons to purchase all or part of each shareholder’s equity interests in Fintech. The purchase price shall be equal to the minimum price required by the relevant PRC laws. Without prior written consent of WFOE, Fintech shall not to, among other things, amend its articles of association, sell or otherwise dispose of its assets or beneficial interests, enter into transactions which may adversely affect its assets, liabilities, business operations, equity interests and other legal interests, or merge with any other entities or make any investments, or distribute dividends. WFOE has right to transfer the rights and obligations pursuant to the Exclusive Call Option Agreement to any third party, which does not require any prior consent of Fintech and its shareholders. The Exclusive Call Option Agreement will remain effective until WFOE terminates this agreement in 30 days advance notice.

Post-Proposal Structure

If HEBT’s shareholders approve the NiSun Proposal and Share Transfer Proposal, then following the closing of such transaction, Hebron Technology will acquire all of the equity of NiSun BVI from Mr. Bodang Liu, the sole shareholder of NiSun BVI. At the same time, Buyer, which is also wholly owned by Mr. Liu, will become the largest shareholder of HEBT by virtue of acquiring approximately 47.8% of all outstanding common shares of HEBT from the Sellers. Upon closing, the corporate structure of HEBT would be as follows:

The Share Transfer

Assuming the Share Transfer Proposal is approved, Buyer will purchase the Sellers’ Class B common common shares. The purchase price will be an aggregate of $9 million, or approximately $1.16 per share. Wise holds 1,800,000 Class B common shares and Sun Zhang holds 5,978,400 Class B common shares, which together constitute approximately 47.8% of all of the Company’s outstanding common shares at the time of the Closing on a fully diluted basis. Mr. Anyuan Sun beneficially owns all of these shares, because he is the sole shareholder of Wise and because Sun Zhang holds his shares on behalf of Mr. Sun as a nominee.

Immediately upon transfer, the Class B common shares will become Class A common shares, and all issued and outstanding common shares will be a single class of shares, with identical voting and economic interests.

The NiSun BVI Acquisition

Assuming the NiSun Proposal is approved, HEBT and the shareholder of NiSun BVI, Mr. Bodang Liu, have agreed that they will cooperate to obtain an independent third party valuation of NiSun BVI. The parties have agreed that Asia (Beijing) Asset Appraisal Co., Ltd. (“Asia Appraisal”), a member firm of Valuelink Group, will provide an appraisal of NiSun BVI in connection with a determination of its fair market value. Asia Appraisal was founded in 1993 and holds China Asset Appraisal Qualification (issued by Minister of Finance) and Asset Appraisal Qualification for Business related to Securities and Futures (jointly issued by Minister of Finance and China Securities Regulatory Commission).

The appraisal of NiSun BVI prepared by Asia Appraisal has been presented to both parties, and a copy of the appraisal is attached as Annex B. Upon HEBT shareholder approval, HEBT will negotiate final pricing to be paid to the shareholder of NiSun BVI to purchase all of the equity of NiSun BVI. By acquiring NiSun BVI’s equity, HEBT will acquire NiSun HK, WFOE and contractual control over Fintech.

The Option to Purchase Xibolun Automation, Xibolun Equipment and Weijia Bio-Tech Interests

Assuming shareholder approval of the Option Proposal, HEBT will grant an option (“Option”) to a designee of the Sellers (the “Optionee”) to purchase (a) the Company’s 100% equity interest in Zhejiang Xibolun Automation Project Technology Co., Ltd. (“Xibolun Automation”), (b) the Company’s 100% equity interest in Wenzhou Xibolun Fluid Equipment Co., Limited (“Xibolun Equipment”) and (c) the Company’s 49% equity interest in Xuzhou Weijia Bio-Tech Co., Ltd. (“Weijia Bio-Tech”). Upon execution of the Call Option Agreement, the Optionee will pay a non-refundable fee of $50,000 to the Company to purchase the Option. To the extent the Optionee exercises the Option, such fee will be applied as a credit to the purchase price of Xibolun Automation, Xibolun Equipment and Weijia Bio-Tech. If the Optionee does not exercise the Option, this fee will be forfeited to the Company when the Option expires.

The Option may be exercised beginning six (6) months following the effective date of the Call Option Agreement, and the Option expires if not exercised within two (2) years after becoming exercisable (or two years, six months after the effective date of the Call Option Agreement).

The purchase price to exercise the Option shall be equal to the fair market value of the equity of the subsidiary being acquired. Where the parties are unable to agree to such fair market value, either party has the right to submit the matter to appraisal. The Parties have agreed that a mutually agreed reputable third party appraisal company with sufficient U.S. capital and Chinese market expertise and qualification shall be engaged to conduct the appraisal of Xibolun. A determination of fair market value made by such appraisers shall be binding and conclusive as to the subject matter thereof. Both Parties shall share the expenses of the appraisals of Xibolun.

Conditions to Closing of the Share Purchase Agreement

To complete the share transfer, the following conditions must be satisfied:

To complete the acquisition of NiSun BVI, the following conditions must be satisfied:

To complete the issuance of the Option, the following conditions must be satisfied:

Finally, the representations and warranties of all of the parties to the Share Purchase Agreement must be true and accurate as of the time of closing under such agreement.

To complete a Reverse Split, the following conditions must be satisfied:

Termination

The transaction may be terminated prior to the closing without prejudice in the event it fails to close on or before December 31, 2019 unless otherwise extended by the parties.

Break Fee

Because a termination without cause or breach of the terms of the Share Purchase Agreement by Buyer or Sellers would cause substantial damage to HEBT, the Sellers (a group and not individually) and Buyer each agreed to pay the Company a sum of $200,000 (the “Break Fee”), in addition to any other rights at law or in equity the parties may have in the event of termination or breach of the Share Purchase Agreement. If the Share Purchase Agreement is terminated by Sellers or Buyer without cause, the terminating Party shall pay the Break Fee to the Company within five (5) days’ demand for payment by the Company. If the Share Purchase Agreement is terminated by Sellers or Buyer due to the breach of the Share Purchase Agreement by the other party, such breaching Party shall pay the Break Fee to the Company within five (5) days’ demand for payment by the Company. If the Share Purchase Agreement is terminated by the Company due to the Sellers’ or Buyer’s breach of this Agreement, such breaching Party shall pay the Break Fee to the Company within five (5) days’ demand for payment by the Company. The phrase “without cause” means the termination of the Share Purchase Agreement in the absence of a breach of the Share Purchase Agreement, and termination due to breach shall refer to a material breach of the Share Purchase Agreement that is impossible to cure or that is not cured within ten (10) days after delivery of written demand for such cure.

Fees and Expenses

HEBT is bearing the costs of preparing this proxy statement and mailing to shareholders. Each of the Buyer and Sellers bear their respective expenses.

Regulatory Approvals Required for the Proposal

The Acquisition and the transactions contemplated by the Share Purchase Agreement are not subject to any additional federal or state regulatory requirements or approval, except for the filings with the British Virgin Islands necessary to effectuate the transactions contemplated by the Share Purchase Agreement.

The Reverse Split

Our board of directors has adopted resolutions (i) declaring that filing an amendment to the Company’s Memorandum and Articles of Association to effect the Reverse Split of our issued and outstanding common shares was advisable, and (ii) directing that a proposal to approve the Reverse Split be submitted to the holders of our common shares for their approval. The Reverse Split of our issued and outstanding common stock will be effected by a ratio of not less than one-for-two and not more than one-for-ten at any time prior to December 31, 2019, 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.

Our board of directors is submitting the Reverse Split Proposal to our shareholders for approval with the intent of increasing the market price of our common shares to enhance our ability to meet the continued listing requirements of the Nasdaq Capital Market, to make our common shares sufficiently attractive for the Buyer to consummate the NiSun BVI transaction and to ensure that HEBT will continue to meet the listing requirements of Nasdaq Capital Market after consummation of the NiSun BVI transaction. Please see the section entitled “ The Reverse Split ” for more information.

Risk Factors

In evaluating the proposals to be presented at the Special Meeting, a shareholder should carefully read this proxy statement and especially consider the factors discussed in the section entitled “ Risk Factors .”

The Special Meeting

The Special Meeting will be held at 10:00 a.m., local time, on June 14, 2019, at the headquarters of HEBT, No. 936, Jinhai 2nd Road, Konggang New Area Longwan District, Wenzhou City, Zhejiang Province, China F4 00000, to consider and vote upon the Reverse Split Proposal, Share Transfer Proposal, NiSun Proposal, Option Proposal and/or, if necessary, the Adjournment Proposal to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Special Meeting, HEBT is not authorized to consummate the other proposals.

Recommendation to Shareholders

After careful consideration, the Company’s board of directors has determined that the Reverse Split Proposal, Share Transfer Proposal, NiSun Proposal, Option Proposal and the Adjournment Proposal are fair to and in the best interests of the Company and its stockholders and unanimously recommends that you vote or give instruction to vote “FOR” the Share Transfer Proposal; “FOR” the NiSun Proposal; “FOR” the Option Proposal; “FOR” the Reverse Split Proposal; and “FOR” the Adjournment Proposal, if presented.

RISK FACTORS  

Risks Related to HEBT’s Business and Industry  

We may incur liability for unpaid taxes, including penalties.

In the normal course of its business, our Company, including in particular Xibolun Automation and Xibolun Equipment, may be subject to challenges from various PRC taxing authorities regarding the amounts of taxes due. Although the Company’s management believes the Company has paid all or accrued for all taxes owed by the Company, PRC taxing authorities may take the position that the Company owes more taxes than it has paid based on transactions conducted by HK Xibolun, which may be deemed a resident enterprise, thereby resulting in taxable liability for us. HK Xibolun’s purchases and sales of fluid equipment control systems offshore in 2013 could, if so challenged, result in a tax liability for our company. (See “Risk Factors — Under the Enterprise Income Tax Law, we may be classified as a ‘Resident Enterprise’ of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC stockholders.”)

The Company recorded a tax liability of $9,085,746 and $7,067,593 as of December 31, 2018 and 2017, respectively, for the possible underpayment of income and business taxes. It is possible that the tax liability of the Company for past taxes may be higher than those amounts, if the PRC authorities determine that we are subject to penalties. Although we have had unofficial discussions with the local tax authority and believe that it is possible that the Company will reach an agreement with the local tax authority resulting in a settlement of tax liability lower than the amount currently accrued before the end of fiscal 2019, we have no guarantee that we will be able to negotiate such a reduction on the tax liability and we cannot be certain as to how much penalties would be assessed, if any. To the extent our Company is able to negotiate such amounts, national-level taxing authorities may take the position that localities are without power to reduce such liabilities, and such PRC taxing authorities may attempt to collect unpaid taxes and penalties in amounts greatly exceeding management’s estimates.

Our industry is competitive in China.

The market for installation service in the pharmaceutical industry is fragmented and relatively competitive. Many of our clients require bidding process before choosing installation service providers. We compete on the basis of price and service quality.

The domestic market for valve products is fragmented and highly competitive. We estimate that there are three relatively large companies with which we compete and more than one hundred smaller companies with regional presences. The number of these companies varies from time to time. Some of our valve products compete on the basis of price and are sold in fragmented markets with low barriers to entry, allowing less expensive domestic producers to gain market share and reduce our margins. To the extent these competitors are able to grow and consolidate, they may be able to take advantage of economies of scale, which could put further pressure on our margins.

Our revenue will decrease if the industries in which our customers operate experience a protracted slowdown.

Our services mainly serve as key components in projects and machines operated by our customers which are mostly in the pharmaceutical industry. Therefore, we are subject to the general changes in economic conditions affecting this industry segment of the economy. If the pharmaceutical industry in which our customers operate do not grow or if there is a contraction in those industries, demand for our services will decrease. Demand for our services is typically affected by a number of overarching economic factors, including, but not limited to, interest rates, the availability and magnitude of private and governmental investment in infrastructure projects and the health of the overall global economy. Although pharmaceutical industry is more resilient in the wake of general economic slowdown, if there is a decline in economic activity in China and the other markets in which we operate or a protracted slowdown in industries on which we rely for our sales, demand for our services and our revenue will likewise decrease.

Any decline in the availability, or increase in the cost of raw materials could materially affect our earnings.

Our valve manufacturing operations depend heavily on the availability of various raw materials and energy resources. The mix of raw materials used in the production of valves is mainly composed of casting steel blank parts, forging steel blank parts and steel. Steel costs account for approximately 30% of our total manufacturing costs. The fuel costs in our manufacturing operations, particularly heavy oil and electricity, account for approximately 2% of total manufacturing costs. The availability of raw materials and energy resources may decline and their prices may fluctuate greatly. If our suppliers are unable or unwilling to provide us with raw materials on terms favorable to us, we may be unable to produce certain products. While valve production is only a very small part of our business, inability to produce certain products could result in a decrease in profit and damage to our reputation in our industry. In the event our raw material and energy costs increase, we may not be able to pass these higher costs on to our customers in full or at all. Any increase in the prices for raw materials or energy resources could materially increase our costs and therefore lower our earnings.

China’s appreciating currency may make our products more expensive to export to other countries.

While we sell most of our products in China, we may also export our products to a variety of other countries from time to time. Historically, we have relied on favorable exchange rates between China and other countries to drive revenues from products sold abroad. Over the last several years, China’s currency has appreciated against most foreign currencies, causing our products have become more expensive in other countries. To the extent the Chinese RMB continues to appreciate, our products could become more expensive and, as a result, less attractive to potential customers in other countries. The RMB depreciated from 2014 through the end of 2016, appreciated against the U.S. dollar in 2017, and has depreciated since the beginning of 2018. See “Exchange Rate Information.”

Outstanding bank loans may reduce our available funds.

We have approximately $1.7 million and $0.9 million in bank loans outstanding as of December 31, 2018 and December 31, 2017, respectively. The loans are held at multiple banks, and all of the debt is guaranteed by members of our management, their immediate family members and unrelated third parties. In particular, our Chief Executive Officer and his brother have guaranteed this debt with recourse to their respective residences, and unrelated third parties have extended guarantees of our company’s debt in order to assist us in obtaining such loans. There can be no guarantee that we will be able to pay all amounts when due or refinance the amounts on terms that are acceptable to us or at all. If we are unable to make our payments when due or to refinance such amounts, our property could be foreclosed and our business could be negatively affected.

Reciprocal debt guarantees may reduce our assets if we are required to honor a guarantee made in favor of a third party.

In the past, we have occasionally entered into reciprocal debt guarantees with other local businesses in order to meet funding requirements of lenders, who sometimes require greater assets or income than we have individually, but that could be satisfied if similarly situated businesses agreed to guarantee each other’s debts. These guarantees are typically time-limited and tend to be two years in length. Although we do not currently have a guarantee obligation, we could be subject to loss in the future if we undertake to guarantee another party’s debt and such third party subsequently defaults in payment.

We may have liability under our contract with Zhejiang University.

We signed a Research and Collaboration Agreement with Zhejiang University on January 20, 2011. Pursuant to the agreement, Zhejiang University was responsible for conducting the research and development work of intelligent process control valve on behalf of us, and we were obligated to pay Zhejiang University a total of RMB 1 million (approximately $0.15 million) in several installments. We made payments to Zhejiang University in accordance with the specific milestones stipulated in the agreement and a total of RMB 0.65 million (approximately $0.10 million) as required by the agreement was paid as of December 31, 2018.

In addition, the agreement requires us to pay a total amount of RMB 0.35 million to Zhejiang University depending on the sales of the products, which consists of RMB 0.07 million per year for 5 years starting from May 31, 2012. As of December 31, 2018, RMB 0.15 million remains outstanding because we have not put any such products from the research into market for sales, and Zhejiang University has never required us to pay for any balance by sending us any invoice. Based  on the terms of the agreement, we consider that this payment is not due. However, we plan to pay the required amount according to the terms in the Research and Collaboration Agreement in the future once we start selling the products. We do not intend to make payment until the conditions in the agreement are met. Zhejiang University could file a lawsuit against us claiming the balance and damages if we refuse to pay on its demand. Such a lawsuit, whether or not successful, may cost us considerable time and expense.

The loss of any of our key customers could reduce our revenues and our profitability.

For the year ended December 31, 2018, four customers accounted for approximately 13%, 12%, 11% and 10% of the Company’s total revenue, respectively. As of December 31, 2018, two general contractors who provided the Company’s installation projects accounted for approximately 58% and 42% of the Company’s total contracts receivable balance, respectively.

For the year ended December 31, 2017, four major customers accounted for approximately 22%, 21%, 13% and 10% of the Company’s total revenue. As of December 31, 2017, two general contractors for the Company’s installation projects accounted for approximately 58% and 42% of the Company’s total contracts receivable balance, respectively.

For the year ended December 31, 2016, two major customers each accounted for approximately 10% of the Company’s total revenue. As of December 31, 2016, two general contractors for the Company’s installation projects accounted for approximately 51% and 45% of the Company’s total contracts receivable balance, respectively.

We have not entered into long-term contracts with any of these major customers and instead rely on individual orders from such customers. Therefore, there can be no assurance that we will maintain or improve the relationships with these customers, or that we will be able to continue to serve these customers at current levels or at all. As the majority of our revenues are driven by individual orders for installation services, our major customers often change each period based on when a given order is placed. Although long-term contracts do not exist in our industry and our customers often make orders repeatedly, if we cannot maintain long-term relationships with major customers or replace major customers from period to period with equivalent customers, the loss of such sales could have an adverse effect on our business, financial condition and results of operations.

We rely on a relatively limited number of vendors.

We consider our major vendors in each period to be those vendors that accounted for more than 10% of overall purchases in such period.

For the year ended December 31, 2018, six major sub-contractors accounted for approximately 21%, 19%, 18%, 16%, 15% and 11% of subcontract costs, respectively. For the year ended December 31, 2018, three supplier accounted for 34%, 21% and 15% of the Company’s accounts payable balance, and no individual supplier accounted for more than 10% of the Company’s advance to suppliers balance. 

For the year ended December 31, 2017, three major sub-contractors accounted for approximately 44%, 18% and 16% of subcontract costs, respectively. For the year ended December 31, 2017, only one supplier accounted for 18% of the Company’s accounts payable balance, and only one supplier accounted for 17% of the Company’s total advance to suppliers balance.

For the year ended December 31, 2016, three major sub-contractors accounted for approximately 44%, 22% and 15% of subcontract costs, respectively. For the year ended December 31, 2016, only one supplier accounted for 10% of the Company’s accounts payable balance.

We have not entered into long-term contracts with any of these major vendors and instead rely on individual projects with such vendors. Although we believe that we can locate replacement vendors readily on the market for prevailing prices and that we would not have significant difficulty replacing a given vendor, any difficulty in replacing such a vendor could negatively affect our company’s performance to the extent it results in higher prices or a slower supply chain.

Any disruption in the supply chain of raw materials and our products could adversely impact our ability to produce and deliver products.

As to the products we manufacture, we must manage our supply chain for raw materials and delivery of our products. Supply chain fragmentation and local protectionism within China further complicates supply chain disruption risks. Local administrative bodies and physical infrastructure built to protect local interests pose transportation challenges for raw material transportation as well as product delivery. In addition, profitability and volume could be negatively impacted by limitations inherent within the supply chain, including competitive, governmental, legal, natural disasters, and other events that could impact both supply and price. Any of these occurrences could cause significant disruptions to our supply chain, manufacturing capability and distribution system that could adversely impact our ability to produce and deliver products.

We do not maintain a reserve for warranty or defective products/installation claims. Our costs could increase if we experience a significant number of claims.

The Company generally obtains the customers’ acceptance when the Company delivers product or renders service to its customers. The Company will not recognize revenue until a Completion and Evaluation Report has been provided by the customer. The Completion and Evaluation Report proves the quality of the installation projects, and there is no additional service performed by the Company later. Therefore, revenue is recognized when a Completion and Evaluation Report has been provided by the customer.

In practice, the Company allows customers to reserve approximately 5-10% of the agreed purchase or installation price as the quality security retention for a period of one year after the Company delivers and/or implement a solution for them.

The Company considers this one year term as a warranty period for the Company’s products sold or services provided as defined under ASC Subtopic 450-20. Historically, the Company has not experienced significant customer complaints about the products and none of customers have claimed damages for any loss incurred due to quality problems. Therefore, no separate warranty provisions were provided as at December 31, 2018, 2017 and 2016 based on historical experience.

We believe that our customer support teams, our quality assurance and manufacturing monitoring procedures will continue to keep claims at a level that does not support a need for a reserve. However, if we were to experience a significant increase in claims or failures to pay this final payment, our financial results could be adversely affected. Moreover, China’s Product Quality Law generally allows customers two years (and in some cases ten years) to seek compensation for damages caused by product quality deficiencies in cases in which the product lacks an expiration period.

Rapid expansion could significantly strain our resources, management and operational infrastructure, which could impair our ability to meet increased demand for our products and hurt our business results.

To accommodate our anticipated growth, we will need to expand capital resources and dedicate personnel to implement and upgrade our accounting, operational and internal management systems and enhance our record keeping and contract tracking system. Such measures will require us to dedicate additional financial resources and personnel to optimize our operational infrastructure and to recruit more personnel to train and manage our growing employee base. If we cannot successfully implement these measures efficiently and cost-effectively, we will be unable to satisfy the demand for our products, which will impair our revenue growth and hurt our overall financial performance.

We must manage growth in operations to maximize our potential growth and achieve our expected revenues and any failure to manage growth will cause a disruption of our operations and impair our ability to generate revenue.

 In order to maximize potential growth in our current and potential markets, we believe that we must expand the scope of our valve manufacturing and production facilities and capabilities and continue to develop new and improved valves. This expansion will place a significant strain on our management and our operational, accounting, and information systems. We expect that we will need to continue to improve our financial controls, operating procedures and management information systems. We will also need to effectively train, motivate and manage our employees. Our failure to manage our growth could disrupt our operations and ultimately prevent us from generating the revenues we expect.

We cannot assure you that our internal growth strategy will be successful, which may result in a negative impact on our growth, financial condition, results of operations and cash flow.

One of our strategies is to grow internally through establishing our services in additional markets by increasing the development of new products and improving the quality of existing products. However, many obstacles to this expansion exist, including, but not limited to, increased competition from similar businesses, our ability to improve our products and product mix to realize the benefits of our research and development efforts, unexpected costs, costs associated with marketing efforts. We cannot, therefore, assure you that we will be able to successfully overcome such obstacles and establish our services in any additional markets. Our inability to implement this internal growth strategy successfully may have a negative impact on our growth, future financial condition, results of operations or cash flows.

Failure to manage our growth could strain our management, operational and other resources, which could materially and adversely affect our business and prospects.

Our internal growth strategy includes building our brand, expanding our services, developing repair and maintenance business, increasing market penetration of our existing products, developing new products and increasing our targeting of the pharmaceutical market in China. Pursuing these strategies has resulted in, and will continue to result in substantial demands on management resources. In particular, the management of our growth will require, among other things:

If we are not able to manage our growth successfully, our business and prospects would be materially and adversely affected.

Our bank accounts are not insured or protected against loss.

We maintain our cash with various banks and trust companies located in the PRC. Our cash accounts are not insured or otherwise protected. While China is currently considering implementation of banking insurance policies, it has not yet done so. Should any bank or trust company holding our cash deposits become insolvent, or if we are otherwise unable to withdraw funds, we would lose the cash on deposit with that particular bank or trust company.

Our Chinese subsidiaries’ books and records are prepared in accordance with China GAAP, not U.S. GAAP.

Substantially all of the business operations of the Company are located in Mainland China. Although Hebron Technology’s reports are prepared in accordance with U.S. GAAP, our PRC subsidiaries’ books and records are prepared in accordance with China GAAP. Despite our efforts to improve the Company’s controls and procedures, our accounting personnel do not have sufficient knowledge, experience and training in maintaining our books and records in accordance with U.S. GAAP standards. If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, current and potential shareholders could lose confidence in our financial reporting, which would harm the value of our shares.

We are substantially dependent upon our senior management and key research and development personnel.

We are highly dependent on our senior management to manage our business and operations and our key research and development personnel for the development of new products and the enhancement of our existing products and technologies. In particular, we rely substantially on our Chief Executive Officer, Anyuan Sun and our Chief Financial Officer, Steven Fu, to manage our operations. We also depend on our Chief Technical Officer, Xiaoliang Xue, for the development of new technology and products.

While we provide the legally required personal insurance for the benefit of our employees, we do not maintain key man life insurance on any of our senior management or key personnel other than our Chief Executive Officer, Mr. Anyuan Sun. The loss of any one of them would have a material adverse effect on our business and operations. Competition for senior management and our other key personnel is intense and the pool of suitable candidates is limited. We may be unable to locate a suitable replacement for any senior management or key personnel that we lose. In addition, if any member of our senior management or key personnel joins a competitor or forms a competing company, they may compete with us for customers, business partners and other key professionals and staff members of our company. Although each of our senior management and key personnel has signed a confidentiality agreement in connection with his employment with us, we cannot assure you that we will be able to successfully enforce these provisions in the event of a dispute between us and any member of our senior management or key personnel.

We compete for qualified personnel with other technology companies and research institutions. Intense competition for these personnel could cause our compensation costs to increase, which could have a material adverse effect on our results of operations. Our future success and ability to grow our business will depend in part on the continued service of these individuals and our ability to identify, hire and retain additional qualified personnel. If we are unable to attract and retain qualified employees, we may be unable to meet our business and financial goals.

We are heavily dependent upon the services of experienced personnel who possess skills that are valuable in our industry, and we may have to actively compete for their services.

We are heavily dependent upon our ability to attract, retain and motivate skilled personnel to serve our customers. Many of our personnel possess skills that would be valuable to all companies engaged in our industry. Consequently, we expect that we will have to actively compete for these employees. Some of our competitors may be able to pay our employees more than we are able to pay to retain them. Our ability to profitably operate is substantially dependent upon our ability to locate, hire, train and retain our personnel. There can be no assurance that we will be able to retain our current personnel, or that we will be able to attract and assimilate other personnel in the future. If we are unable to effectively obtain and maintain skilled personnel, the development and quality of our services could be materially impaired. See “Our Employees.”

We depend on intellectual property licensed from third parties, and termination of any of these licenses could result in the loss of significant rights, which would harm our business.

Our Chief Executive Officer grants us the right to use two trademarks, three patents and one copyright without payment. As our Chief Executive Officer’s permission to use these two trademarks is provided at his discretion, he could choose to discontinue such permission in the future. While currently the only third party who grants us intellectual property license is our Chief Executive Officer, it is possible for us to obtain license from any other third parties. Any termination of these licenses could result in the loss of significant rights and could harm our ability to commercialize our products. We must therefore rely on those third parties to enforce their rights and obligations. If they do not successfully enforce such rights and obligations, our development and commercialization of such technology could be delayed or prevented.

When we license intellectual property from third parties, those parties generally retain most or all of the obligations to maintain and extend, as well as the rights to assert, prosecute and defend, that intellectual property. If we or our licensors fail to adequately protect this intellectual property or if we do not have exclusivity for the marketing of our products, our ability to commercialize products could suffer.

If we fail to protect our intellectual property rights, it could harm our business and competitive position.

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. We are currently in control of 34 patents in China covering our valve production technology, 31 of which are now owned by PRC entities, and 3 of which are now owned by Mr. Anyuan Sun.

In addition, for those 3 patents owned by Mr. Anyuan Sun, Mr. Sun currently has no intention to transfer them to the ownership of our PRC entities. Although we are using the patents for free, there are possibilities that Mr. Sun may require us to pay royalties in future. If so, it will certainly increase our operational costs and adversely affect our business profitability.

Likewise, two of four trademarks and one copyright as disclosed in the section of “Our Intellectual Property” we are currently using are under Mr. Anyuan Sun’s ownership but we’re currently using them for free. There is also a possibility that we will be required by Mr. Sun to pay royalties in future. If so, it will certainly increase our operation cost and adversely affect our business profitability. Fortunately, we successfully applied on our own name two trademarks in 2015, for both of which we have obtained the certificate issued by the authority (SAIC).

As to the licenses on aforementioned three patents, two trademarks, and one copyright, the license agreements we signed with Mr. Anyuan Sun did not specify expiration dates but only stated that we are entitled to use them during the valid terms of the patents, trademarks, and copyrights, which indicated that if the terms expire and Mr. Sun does not want to extend them, the licenses will expire. Also, according to China’s Intellectual Property Laws, including Patent Law, Trademark Law, and Copyrights Law, the license agreement is valid once the agreement is signed and the registration with regulatory agencies is not a necessity for the agreement to be valid. However, if the agreement is not registered, then the general public may not be aware of the agreement and the licensees’ rights will not be protected when the licensor assigns the intellectual property rights to other parties. We filed with the regulatory agencies the registration application of the license agreements in March of 2016, and the whole process shall be completed in a couple of months. In addition, since the license agreements are non-exclusive, Mr. Sun is still entitled to sign license agreements with other parties. If Mr. Sun does so, the market shares for our products which are manufactured and sold with these licensed intellectual property rights will certainly be shrunk and our profits will be affected adversely.

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.

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.

Implementation of PRC intellectual property-related laws has historically been lacking, primarily because of ambiguities in the PRC laws and enforcement difficulties. Accordingly, 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.

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.

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’ 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. 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:

each of which 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.

Risks Related to Doing Business in China 

If we become directly subject to the recent scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expand significant resources to investigate and resolve the matter which could harm our business operations and our reputation and could result in a loss of your investment in our stock, especially if such matter cannot be addressed and resolved favorably.

Recently, U.S. public companies that have substantially all of their operations in China, 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, a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result of the scrutiny, criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese companies has sharply decreased in value and, in some cases, has 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 what effect this sector-wide scrutiny, criticism and negative publicity will have on our company and our business. 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 and/or defend the Company. This situation may be a major distraction to our management. If such allegations are not proven to be groundless, our company and business operations will be severely hampered and your investment in our stock could be rendered worthless.

Adverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China, which could reduce the demand for our products and materially and adversely affect our competitive position.

Substantially all of our business operations are conducted in China. Accordingly, our business, results of operations, financial condition and prospects are subject to economic, political and legal developments in China. Although the Chinese economy is no longer a planned economy, the PRC government continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host of other government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between RMB and foreign currencies, and regulate the growth of the general or specific market. These government involvements have been instrumental in China’s significant growth in the past 30 years. In response to the recent global and Chinese economic downturn, the PRC government has adopted policy measures aimed at stimulating the economic growth in China. If the PRC government’s current or future policies fail to help the Chinese economy achieve further growth or if any aspect of the PRC government’s policies limits the growth of our industry or otherwise negatively affects our business, our growth rate or strategy, our results of operations could be adversely affected as a result.

Labor laws in the PRC may adversely affect our results of operations.

On June 29, 2007, the PRC government promulgated a new labor law, namely, the Labor Contract Law of the PRC, which became effective on January 1, 2008, which was further amended on December 28, 2012 (effective July 1, 2013). The Labor Contract Law imposes greater liabilities on employers and significantly affects the cost of an employer’s decision to reduce its workforce. Further, it requires certain terminations be based upon seniority and not merit. In the event we decide to significantly change or decrease our workforce, the Labor Contract Law could adversely affect our ability to enact such changes in a manner that is most advantageous to our business or in a timely and cost-effective manner, thus materially and adversely affecting our financial condition and results of operations. The Labor Contract Law also mandates that employers provide social welfare packages to all employees, increasing our labor costs. To the extent competitors from outside China are not affected by such requirements, we could be at a comparative disadvantage.

Imposition of trade barriers and taxes may reduce our ability to do business internationally, and the resulting loss of revenue could harm our profitability.

We may experience barriers to conducting business and trade in our targeted emerging markets in the form of delayed customs clearances, customs duties and tariffs. In addition, we may be subject to repatriation taxes levied upon the exchange of income from local currency into foreign currency, substantial taxes on profits, revenues, assets and payroll, as well as value-added tax. The markets in which we plan to operate may impose onerous and unpredictable duties, tariffs and taxes on our business and products, and there can be no assurance that this will not reduce the level of sales that we achieve in such markets, which would reduce our revenues and profits.

Under the Enterprise Income Tax Law, we may be classified as a “Resident Enterprise” of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC stockholders.

China passed an Enterprise Income Tax Law (the “EIT Law”) and implementing rules, both of which became effective on January 1, 2008. Under the EIT Law, an enterprise established outside of China with “de facto management bodies” within China is considered a “resident enterprise,” 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 “substantial and overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise.

On April 22, 2009, the State Administration of Taxation of China issued the Notice Concerning Relevant Issues Regarding Cognizance of Chinese Investment Controlled Enterprises Incorporated Offshore as Resident Enterprises pursuant to Criteria of de facto Management Bodies, or the Notice, further interpreting the application of the EIT Law and its implementation to offshore entities controlled by a Chinese enterprise or group. Pursuant to the Notice, an enterprise incorporated in an offshore jurisdiction and controlled by a Chinese enterprise or group will be classified as a “non-domestically incorporated resident enterprise” 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 stamps, board and stockholder minutes are kept in China; and (iv) at least half of its directors with voting rights or senior management are often resident in China. 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 stockholders.

Hebron Technology does not have a PRC enterprise or enterprise group as our primary controlling shareholder and is therefore not a Chinese-controlled offshore incorporated enterprise within the meaning of the Notice, so we believe the Notice is not applicable to us. However, in the absence of guidance specifically applicable to us, we have applied the guidance set forth in the Notice to evaluate the tax residence status of Hebron Technology.

We do not believe that we meet some of the conditions outlined. As a holding company, the key assets and records of Hebron Technology including the resolutions and meeting minutes of our board of directors and the resolutions and meeting minutes of our shareholders, are located and maintained outside the PRC. In addition, we are not aware of any offshore holding companies with a corporate structure similar to ours that have been deemed a PRC “resident enterprise” by the PRC tax authorities. Accordingly, we believe that Hebron Technology should not be treated as a “resident enterprise” for PRC tax purposes if the criteria for “de facto management body” as set forth in the Notice were deemed applicable to us. However, as the tax residency status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body” as applicable to our offshore entities, we will continue to monitor our tax status.

If the PRC tax authorities determine that we are a “resident enterprise” for 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. In our case, this would mean that income such as non-China source income would be subject to PRC enterprise income tax at a rate of 25%. Currently, we do not have any non-China source income, so this would have minimal effect on us; however, if we develop non-China source income in the future, we could be adversely affected. Second, under the EIT Law and its implementing rules, dividends paid to us from our PRC subsidiaries would qualify as “tax-exempt income.” Finally, it is possible that future guidance issued with respect to the new “resident enterprise” classification could result in a situation in which a 10% withholding tax is imposed on dividends we pay to our non-PRC stockholders and with respect to gains derived by our non-PRC stockholders from transferring our shares.

If we were treated as a “resident enterprise” by PRC tax authorities, we would be subject to taxation in both the U.S. and China, but our PRC source income will not be taxed in the U.S. again because the U.S.-China tax treaty will avoid double taxation between these two nations.

Since our operations and assets are located in the PRC, shareholders may find it difficult to enforce a U.S. judgment against the assets of our company, our directors and executive officers.

Our operations and assets are located in the PRC. In addition, most of our executive officers and directors are non-residents of the U.S., and substantially all the assets of such persons are located outside the U.S. As a result, it could be difficult for investors to effect service of process in the U.S., or to enforce a judgment obtained in the U.S. against us or any of these persons.

We may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption law.

As a Nasdaq-listed public company, we are subject to the U.S. Foreign Corrupt Practices Act, or 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 are also subject to Chinese anti-corruption laws, which strictly prohibit the payment of bribes to government officials. We have operations, agreements with third parties, and make sales in China, which may experience corruption. Our activities in China create the risk of unauthorized payments or offers of payments by one of the employees, consultants or distributors of our company, because these parties are not always subject to our control. We are in process of implementing an anticorruption program, which prohibits the offering or giving of anything of value to foreign officials, directly or indirectly, for the purpose of obtaining or retaining business. The anticorruption program also requires that clauses mandating compliance with our policy be included in all contracts with foreign sales agents, sales consultants and distributors and that they certify their compliance with our policy annually. It further requires that all hospitality involving promotion of sales to foreign governments and government-owned or controlled entities are in accordance with specified guidelines. In the meantime, we believe to date we have complied in all material respects with the provisions of the FCPA and Chinese anti-corruption law.

However, our existing safeguards and any future improvements may prove to be less than effective, and the employees, consultants or distributors of our Company may engage in conduct for which we might be held responsible. Violations of the FCPA or Chinese anti-corruption law 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 government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.

Uncertainties with respect to the PRC legal system could adversely affect us.

We conduct all of our business through our subsidiaries in China. Our operations in China are governed by PRC laws and regulations. Our PRC subsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws and regulations applicable to wholly foreign-owned enterprises. The PRC legal system is based on statutes. Prior court decisions may be cited for reference but have limited precedential value.

Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China. However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions and their nonbinding nature, the interpretation and enforcement of these laws and regulations involve uncertainties. In addition, the PRC legal system is based in part on government policies and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive effect. As a result, we may not be aware of our violation of these policies and rules until sometime after the violation. In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention.

PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our recent initial public offering to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

From time to time we may make loans to our PRC subsidiaries, or we may make additional capital contributions to our PRC subsidiaries. Any loans to our PRC subsidiaries are subject to PRC regulations. For example, loans by us to our subsidiaries in China, which are FIEs, to finance their activities cannot exceed statutory limits and must be registered with the State Administration of Foreign Exchange, or SAFE. Currently, China is holding more open and tolerate attitude toward FIEs. More open rules and regulations are published in recent years to replace previous ones which are more restrictive. On March 30 ^th , 2015, SAFE promulgated Circular 19 which is about  Reforming the Management Approach regarding the Settlement of Foreign Exchange Capital of Foreign-invested Enterprises)  and effective since June 1, 2015. Circular 19 has made some important changes in rules regarding the conversion of foreign exchanges to RMB, which are as follows in particular:

On May 10, 2013, SAFE released Circular 21, which came into effect on May 13, 2013; also, on February 13, 2015 SAFE published Circular 13  (Circular of the State Administration of Foreign Exchange on Further Simplifying and Improving the Direct Investment-related Foreign Exchange Administration Policies ) to update some measures stipulated in Circular 21. According to Circular 21, SAFE has significantly simplified the foreign exchange administration procedures with respect to the registration, account openings and conversions, settlements of FDI-related foreign exchange, as well as fund remittances. Meanwhile, Circular 13 has further simplified foreign exchange administration procedures, most important among which is that SAFE delegated foreign exchange registration to the banks, meanwhile the related registration approval by SAFE has been annulled.

Even with more and more open policy toward FDI and FIEs, Circulars mentioned above may still have some limit our ability to convert, transfer and use the net proceeds from our initial public offering and any offering of additional equity securities in China, which may adversely affect our liquidity and our ability to fund and expand our business in the PRC.

We may also decide to finance our subsidiaries by means of capital contributions. These capital contributions must be approved by the Ministry of Commerce of China, or MOFCOM, or its local counterpart. We may not be able to obtain these government approvals on a timely basis, if at all, with respect to future capital contributions by us to our PRC subsidiaries. If we fail to receive such approvals, we will not be able to use the proceeds of our initial public offering and capitalize our PRC operations, which could adversely affect our liquidity and our ability to fund and expand our business.

Governmental control of currency conversion may affect the value of your investment.

The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China. We receive substantially all of our revenues in RMB. Under our current corporate structure, our income is primarily derived from dividend payments from our PRC subsidiaries. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiaries to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. However, approval from appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to our security-holders.

Fluctuations in exchange rates could adversely affect our business and the value of our securities.

Changes in the value of the RMB against the U.S. dollar, Euro and other foreign currencies are affected by, among other things, changes in China’s political and economic conditions. Any significant revaluation of the RMB may have a material adverse effect on our revenues and financial condition, and the value of, and any dividends payable on our shares in U.S. dollar terms. For example, to the extent that we need to convert U.S. dollars we receive from our initial public offering into RMB for our operations, appreciation of the RMB against the U.S. dollar would have an adverse effect on RMB amount we would receive from the conversion. Conversely, if we decide to convert our RMB into U.S. dollars for the purpose of paying dividends on our common shares or for other business purposes, appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us. In addition, fluctuations of the RMB against other currencies may increase or decrease the cost of imports and exports, and thus affect the price-competitiveness of our products against products of foreign manufacturers or products relying on foreign inputs.

Since July 2005, the RMB is no longer pegged to the U.S. dollar. Although the People’s Bank of China regularly intervenes in the foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the 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. The RMB depreciated from 2014 through the end of 2016, appreciated in 2017, and has depreciated since the beginning of 2018.

We reflect the impact of currency translation adjustments in our financial statements under the heading “accumulated other comprehensive income (loss).” For the years ended December 31, 2018, 2017 and 2016, we had foreign currency translation gain (loss) adjustments of -$1.8 million, $2.2 million and -$1.4 million, respectively. Very limited hedging transactions are available in China to reduce our exposure to 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, and 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.

PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to penalties and limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us, or otherwise adversely affect us.

The SAFE promulgated the Notice on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or Notice 37, in July 2014 that requires PRC residents or entities to register with SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing. In addition, such PRC residents or entities must update their SAFE registrations when the offshore special purpose vehicle undergoes material events relating to material change of capitalization or structure of the PRC resident itself (such as capital increase, capital reduction, share transfer or exchange, merger or spin off). On October 16, 2015, 9 of our shareholders who are Chinese residents completed  the registration with SAFE under this Notice.

Failure to comply with the Individual Foreign Exchange Rules relating to the overseas direct investment or the engagement in the issuance or trading of securities overseas by our PRC resident stockholders may subject such stockholders to fines or other liabilities.

Other than Notice 37, our ability to conduct foreign exchange activities in the PRC may be subject to the interpretation and enforcement of the Implementation Rules of the Administrative Measures for Individual Foreign Exchange promulgated by SAFE in January 2007 (as amended and supplemented, the “ Individual Foreign Exchange Rules ”). Under the Individual Foreign Exchange Rules, any PRC individual seeking to make a direct investment overseas or engage in the issuance or trading of negotiable securities or derivatives overseas must make the appropriate registrations in accordance with SAFE provisions. PRC individuals who fail to make such registrations may be subject to warnings, fines or other liabilities.

We may not be fully informed of the identities of all our beneficial owners who are PRC residents. For example, because the investment in or trading of our shares will happen in an overseas public or secondary market where shares are often held with brokers in brokerage accounts, it is unlikely that we will know the identity of all of our beneficial owners who are PRC residents. Furthermore, we have no control over any of our future beneficial owners and we cannot assure you that such PRC residents will be able to complete the necessary approval and registration procedures required by the Individual Foreign Exchange Rules.

It is uncertain how the Individual Foreign Exchange Rules will be interpreted or enforced and whether such interpretation or enforcement will affect our ability to conduct foreign exchange transactions. Because of this uncertainty, we cannot be sure whether the failure by any of our PRC resident stockholders to make the required registration will subject our PRC subsidiaries to fines or legal sanctions on their operations, delay or restriction on repatriation of proceeds of the initial public offering into the PRC, restriction on remittance of dividends or other punitive actions that would have a material adverse effect on our business, results of operations and financial condition.

Chinese economic growth slowdown may cause negative effect to our business.

Since 2014, Chinese economic growth has been slowing down from double-digit GDP speed. This situation has impacted many types of service industries, such as restaurant and tourism, and some manufacturing industry. Our business operations in China mainly rely on the pharmaceutical industry, which is less influenced by economic growth slowdown than service industries. However, if China’s economic growth continues to slow down, then our pharmaceutical engineering installation will be adversely affected due to the slow expansion or shrinkage of the pharmaceutical industry. Recession in the steel industry on the other hand may cause us to benefit from decreased material costs.

Risks Related to HEBT’s Corporate Structure and Operation

Our dual class structure concentrates a majority of voting power in our Chief Executive Officer, who is the only beneficial owner of our Class B common shares.

On March 7, 2018, we re-classified and re-designated our common shares into Class A common shares and Class B common shares by filing the Third Amended and Restated Memorandum of Association with the BVI Registrar of Corporate Affairs. Our Class B common shares have five votes per share, and our Class A common shares have one vote per share. Because of the five-to-one voting ratio between our Class B and Class A common shares, the holders of our Class B common shares collectively continue to control a majority of the combined voting power of our common shares and therefore are able to control all matters submitted to our shareholders for approval. The sole beneficial owner of such Class B common shares is our Chief Executive Officer, Mr. Anyuan Sun, who beneficially owns 1,800,000 Class B common shares through Wise Metro Development Co., Ltd. and 5,978,400 Class B common shares through Mr. Zuoqiao Sun Zhang. Mr. Sun holds in the aggregate 84.7% of the voting power of our capital stock. This concentrated control may limit or preclude your ability to influence corporate matters for the foreseeable future, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring shareholder approval. In addition, this may prevent or discourage unsolicited acquisition proposals or offers for our capital stock that you may feel are in your best interest as one of our shareholders.

Future transfers by holders of Class B common shares will generally result in those shares converting to Class A common shares, subject to limited exceptions, such as certain transfers effected for estate planning purposes. The conversion of Class B common shares to Class A common shares will have the effect, over time, of increasing the relative voting power of those holders of Class B common shares who retain their shares in the long term.

We incur additional costs as a result of being a public company, which could negatively impact our net income and liquidity.

As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, Sarbanes-Oxley and rules and regulations implemented by the SEC and The NASDAQ Capital Market require significantly heightened corporate governance practices for public companies. We expect that these rules and regulations will increase our legal, accounting and financial compliance costs and will make many corporate activities more time-consuming and costly.

We do not expect to incur materially greater costs as a result of our having become a public company than those incurred by similarly sized U.S. public companies. If we fail to comply with these rules and regulations, we could become the subject of a governmental enforcement action, investors may lose confidence in us and the market price of our Class A common shares could decline.

The obligation to disclose information publicly may put us at a disadvantage to competitors that are private companies.

As a publicly listed company, we are required to file periodic reports with the Securities and Exchange Commission upon the occurrence of matters that are material to our company and shareholders. In some cases, we will need to disclose material agreements or results of financial operations that we would not be required to disclose if we were a private company. Our competitors may have access to this information, which would otherwise be confidential. This may give them advantages in competing with our company. Similarly, as a U.S.-listed public company, we are governed by U.S. laws that our competitors, which are mostly private Chinese companies, are not required to follow. To the extent compliance with U.S. laws increases our expenses or decreases our competitiveness against such companies, our continued public listing could affect our results of operations.

We are a “foreign private issuer,” and our disclosure obligations differ from those of U.S. domestic reporting companies. As a result, we may not provide you the same information as U.S. domestic reporting companies or we may provide information at different times, which may make it more difficult for you to evaluate our performance and prospects.

We are a foreign private issuer and, as a result, we are not subject to the same requirements as U.S. domestic issuers. Under the Exchange Act, we will be subject to reporting obligations that, to some extent, are more lenient and less frequent than those of U.S. domestic reporting companies. For example, we will not be required to issue quarterly reports or proxy statements. We will not be required to disclose detailed individual executive compensation information. Furthermore, our directors and executive officers will not be required to report equity holdings under Section 16 of the Exchange Act and will not be subject to the insider short-swing profit disclosure and recovery regime.

As a foreign private issuer, we will also be exempt from the requirements of Regulation FD (Fair Disclosure) which, generally, are meant to ensure that select groups of investors are not privy to specific information about an issuer before other investors. However, we will still be subject to the anti-fraud and anti-manipulation rules of the SEC, such as Rule 10b-5 under the Exchange Act. Since many of the disclosure obligations imposed on us as a foreign private issuer differ from those imposed on U.S. domestic reporting companies, you should not expect to receive the same information about us and at the same time as the information provided by U.S. domestic reporting companies.

A lack of insurance could expose us to significant costs and business disruption.

While we have not purchased insurance to cover our assets and property of our business, it could leave our business unprotected from loss. If we were to incur substantial losses or liabilities due to fire, explosions, floods, other natural disasters or accidents or business interruption, our results of operations could be materially and adversely affected.

Land-use rights policy may cause significantly adverse effect to our operation.

China has very conservative land ownership and land use policy. All the lands in China are either belonging to the nation or collective units. Currently, our PRC entities’ new office buildings are in construction on the land we leased from Dalangqiao Village, which is a collective unit and legal owning the land acknowledged by the local government. Therefore, the new offices will not be under the risk of being identified as illegal building, and we can continue its use of the new office as long as the lease do not expire or be terminated. However, since under PRC laws the building registration shall be in consistency with the land use right of the land it occupies, which will stay collectively owned by the members of the Dalangqiao Village, our PRC entities will not get Property Ownership Certificate in relation to the buildings of the new office, thus brings risks that our PRC entities may not be able to use the new office if any dispute arises between the company and the members of the Dalangqiao Village which adversely effects, annuls, or even worse brings termination to the lease.

Unqualified individual subcontractors may bring joint liability to us.

We and our PRC entities, Xibolun Equipment and Xibolun Automation, sometimes subcontract portions of our projects to third parties to complete. According to Construction Law and Qualification Standard for Labor Subcontracting in Construction Business of the PRC, individual contractors are not in a position to obtain any qualification of labor subcontracting. So the subcontracting contracts by Xibolun Equipment and Xibolun Automation to such individual contractors are under the risk of being declared of avoidance of qualification by applicable courts. Article 29 of the Construction Law requires that “the overall contractors and subcontractors shall bear joint responsibilities to project owners for the subcontracted projects”. Even though our PRC entities Xibolun Equipment and Xibolun Automation are very cautious with subcontracting the projects to other parties, there are still possibilities that our PRC entities may subcontract the projects to individuals or parties without required qualifications. Despite the facts that the law enforcement and regulation on these types of subcontracting are not very strict, if the construction completed by unqualified individual subcontractors does not meet required quality and accident occurs, our PRC entities may jointly bear the subsequences pursuant to the Article 64 of the Construction Law. Also, according to the Article 54 of the Regulation on the Quality Management of Construction Projects, the liabilities for the subsequences could be indemnifying the damages and paying penalty which could be ranging from five hundred thousand up to one million RMB.

Risks Related to Ownership of HEBT’s Common Shares

We are an “emerging growth company,” and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our Class A common shares less attractive to investors.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act, or the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We could be an emerging growth company for up to five years, although we could lose that status sooner if our revenues exceed $1.07 billion, if we issue more than $1 billion in non-convertible debt in a three year period, or if the market value of our Class A common shares held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict if investors will find our Class A common shares less attractive because we may rely on these exemptions. If some investors find our Class A common shares less attractive as a result, there may be a less active trading market for our Class A common shares and our stock price may be more volatile.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail our company of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

As a “controlled company” under the rules of The NASDAQ Capital Market, we may exempt our company from certain corporate governance requirements that could adversely affect our public shareholders.

Our principal shareholder beneficially owns a majority of the voting power of our outstanding common shares. Under the Rule 4350(c) of The NASDAQ Capital Market, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirement that a majority of our directors to be independent, as defined in The NASDAQ Capital Market rules, and the requirement that our compensation and nominating and corporate governance committees consist entirely of independent directors. Although we do not intend to rely on the “controlled company” exemption under The NASDAQ Capital Market rules, we could elect to rely on this exemption in the future. If we elected to rely on the “controlled company” exemption, a majority of the members of our board of directors might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely of independent directors. Accordingly, while we remain a controlled company relying on the exemption and during any transition period following a time when we are no longer a controlled company, you would not have the same protections afforded to shareholders of companies that are subject to all of The NASDAQ Capital Market corporate governance requirements.

If we elect to follow certain NASDAQ Capital Market rules available to foreign private issuers, our company could fail to meet corporate governance standards applicable to U.S. domestic issuers.

We are a foreign private issuer and, as a result, we are not subject to the same requirements as U.S. domestic issuers. Under the Exchange Act, we will be subject to reporting obligations that, to some extent, are more lenient and less frequent than those of U.S. domestic reporting companies. For example, we will not be required to issue quarterly reports or proxy statements. We will not be required to disclose detailed individual executive compensation information. Furthermore, our directors and executive officers will not be required to report equity holdings under Section 16 of the Exchange Act and will not be subject to the insider short-swing profit disclosure and recovery regime.

As a foreign private issuer, we will also be exempt from the requirements of Regulation FD (Fair Disclosure) which, generally, are meant to ensure that select groups of investors are not privy to specific information about an issuer before other investors. However, we will still be subject to the anti-fraud and anti-manipulation rules of the SEC, such as Rule 10b-5 under the Exchange Act. Since many of the disclosure obligations imposed on us as a foreign private issuer differ from those imposed on U.S. domestic reporting companies, you should not expect to receive the same information about us and at the same time as the information provided by U.S. domestic reporting companies.

If we continue to be unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Class A common shares may decline.

As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. In addition, beginning with the first annual report on Form 20-F, we have been required to furnish a report by management on the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act. If we continue to identify material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting when required, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Class A common shares could be negatively affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the Securities and Exchange Commission, or the SEC, or other regulatory authorities, which could require additional financial and management resources.

The requirements of being a public company may strain our resources and divert management’s attention.

As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the securities exchange on which we list, and other applicable securities rules and regulations. Despite recent reforms made possible by the JOBS Act, compliance with these rules and regulations will nonetheless increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an “emerging growth company.” The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and operating results.

As a result of disclosure of information in this annual report on Form 20-F and in filings required of a public company, our business and financial condition are more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and operating results could be harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business, brand and reputation and results of operations.

We also expect that being a public company and these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

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

The trading price for our common shares (or Class A common shares since March 19, 2018) has fluctuated since we first listed our common shares. Since our common shares became listed on the Nasdaq on December 27, 2016, the trading price of our common shares (or Class A common shares since March 19, 2018) has ranged from US $0.50 to US $7.02 per common share, and the last reported trading price on June 3, 2019 was $0.8001 per Class A common share. The market price of our common shares may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

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

We do not intend to pay dividends for the foreseeable future.

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

We incur increased costs as a result of being a public company.

As a public company, we incur legal, accounting and other expenses that we did not incur as a private company. For example, we must now engage U.S. securities law counsel and U.S. GAAP auditors that we did not require as a private company, and we will have annual payments for listing on a stock exchange if we are so listed. In addition, the Sarbanes-Oxley Act, as well as new rules subsequently implemented by the SEC and NASDAQ, has required changes in corporate governance practices of public companies. We expect these new rules and regulations to increase our legal, accounting and financial compliance costs and to make certain corporate activities more time-consuming and costly. In addition, we incur additional costs associated with our public company reporting requirements. While it is impossible to determine the amounts of such expenses in advance, we expect that we will incur additional expenses of between $500,000 and $1 million per year that we did not experience as a private company.

Our classified board structure may prevent a change in our control.

Our board of directors is divided into three classes of directors. The current terms of the directors expire in 2019, 2020 and 2021. Directors of each class are chosen for three-year terms upon the expiration of their current terms, and each year the shareholders elect one class of directors. The staggered terms of our directors may reduce the possibility of a tender offer or an attempt at a change in control, even though a tender offer or change in control might be in the best interest of our shareholders.

British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect their interests.

British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstances in which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights of shareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly, shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands 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; and to impose liabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature. There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States, although the courts of the British Virgin Islands will generally recognize and enforce the non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits. This means that even if shareholders were to sue us successfully, they may not be able to recover anything to make up for the losses suffered.

The laws of the British Virgin Islands provide little protection for minority shareholders, so minority shareholders will have little or no recourse if the shareholders are dissatisfied with the conduct of our affairs.

Under the law of the British Virgin Islands, there is little statutory law for the protection of minority shareholders other than the provisions of the BVI Business Companies Act dealing with shareholder remedies. The principal protection under statutory law is that shareholders may bring an action to enforce the constituent documents of the corporation, our amended and restated memorandum and articles of association. Shareholders are entitled to have the affairs of the company conducted in accordance with the general law and the articles and memorandum.

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 British Virgin Islands for business companies 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’s affairs by the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and the constituent documents of the corporation. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions of the company’s memorandum and articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are the following: (1) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts that constitute fraud on the minority where the wrongdoers control the company; (3) acts that infringe on the personal rights of the shareholders, such as the right to vote; and (4) where the company has not complied with provisions requiring approval of a special or extraordinary majority of shareholders, which are more limited than the rights afforded minority shareholders under the laws of many states in the United States.

Risks Related to NiSun BVI’s Business and Industry

NiSun BVI has a limited operating history in a new and evolving market, which makes it difficult to evaluate its future prospects.

The market for online consumer finance marketplaces is new and may not develop as expected. The regulatory framework for this market is also evolving and may remain uncertain for the foreseeable future. Potential borrowers and lenders may not be familiar with this market and may have difficulty distinguishing NiSun BVI’s services from those of its competitors. Convincing potential new borrowers and lenders of the value of NiSun BVI’s services is critical to increasing the volume of loan transactions facilitated through its marketplace and to the success of its business. NiSun BVI launched its online marketplace in January 2016 and has a limited operating history. As its business develops, or in response to competition, NiSun BVI may continue to introduce new products or make adjustments to its existing products, or make adjustments to its business model. Any significant change to its business model may not achieve expected results and may have a material and adverse impact on its financial conditions and results of operations. It is therefore difficult to effectively assess its future prospects.

If NiSun BVI fails to educate potential borrowers and lenders about the value of its platform and services, if the market for its marketplace does not develop as NiSun BVI expects, or if NiSun BVI fails to address the needs of its target market, its business and results of operations will be harmed.

If NiSun BVI does not compete effectively, its results of operations could be harmed.

The online consumer finance marketplace industry in China is intensely competitive and evolving. NiSun BVI’s competitors operate with different business models, have different cost structures or participate selectively in different market segments. They may ultimately prove more successful or more adaptable to new regulatory, technological and other developments. Many of its current and potential competitors have significantly more financial, technical, marketing and other resources than NiSun BVI does and may be able to devote greater resources to the development, promotion, sale and support of their platforms. NiSun BVI’s competitors may also have longer operating histories, more extensive borrower or lender bases, greater brand recognition and brand loyalty and broader partner relationships than NiSun BVI. Additionally, a current or potential competitor may acquire one or more of its existing competitors or form a strategic alliance with one or more of its competitors. Its competitors may be better at developing new products, offering more attractive investment returns or lower fees, responding faster to new technologies and undertaking more extensive and effective marketing campaigns. In response to competition and in order to grow or maintain the volume of loan transactions facilitated through its marketplace, NiSun BVI may have to offer higher investment returns to lenders or charge lower transaction fees, which could materially and adversely affect its business and results of operations. If NiSun BVI is unable to compete with such companies and meet the need for innovation in its industry, the demand for its marketplace could stagnate or substantially decline, NiSun BVI could experience reduced revenues or its marketplace could fail to achieve or maintain more widespread market acceptance, any of which could harm its business and results of operations.

NiSun BVI may continue to incur net losses in the future.

NiSun BVI had net loss of approximately $1.1 million in 2018 and net loss of approximately $1.3 million in 2017. NiSun BVI cannot assure you that it will be able to generate net income or will have retained earnings in the future. NiSun BVI anticipates that its operating expenses will increase in the foreseeable future as NiSun BVI seeks to continue to grow its business, attract borrowers, lenders and partners and further enhance and develop its products, services and platform. These efforts may prove more expensive than currently anticipated, and NiSun BVI may not succeed in increasing revenue sufficiently to offset these higher expenses. As a result of the foregoing and other factors, NiSun BVI may incur additional net losses in the future and may not be able to achieve or maintain profitability.

Fraudulent activity on NiSun BVI’s marketplace could negatively impact its operating results, brand and reputation and cause the use of its loan products and services to decrease.

NiSun BVI is subject to the risk of fraudulent activity both on its marketplace and associated with borrowers, lenders and third parties handling borrower and lender information. Its resources, technologies and fraud detection tools may be insufficient to accurately detect and prevent fraud. Increases in fraudulent activity, either on its marketplace or associated with participants of its marketplace, could negatively impact its brand and reputation, reduce the volume of loan transactions facilitated through its platform and lead NiSunBVI to take additional steps to reduce fraud risk, which could increase its costs. High profile fraudulent activity could even lead to regulatory intervention, and may divert its management’s attention and cause NiSunBVI to incur additional expenses and costs. Although NiSun BVI has not experienced any material business or reputational harm as a result of fraudulent activities in the past, NiSun BVI cannot rule out the possibility that any of the foregoing may occur causing harm to its business or reputation in the future. If any of the foregoing were to occur, its results of operations and financial conditions could be materially and adversely affected.

NiSun BVI’s brand or reputation and the reputation of the online consumer finance marketplace industry may materially and adversely affected by factors outside of its control.

Enhancing the recognition and reputation of NiSun BVI’s brand is critical to its business and competitiveness. Factors that are vital to this objective include but are not limited to its ability to:

Any malicious or innocent negative allegation made by the media or other parties about the foregoing or other aspects of NiSun BVI, including but not limited to its management, business, compliance with law, financial conditions or prospects, whether with merit or not, could severely hurt its reputation and harm its business and operating results. In addition, the market for China’s online consumer finance marketplaces is new and the regulatory framework for this market is also evolving, negative publicity about this industry may arise from time to time. Negative publicity about China’s online consumer finance marketplace industry in general may also have a negative impact on its reputation, regardless of whether NiSun BVI has engaged in any inappropriate activities.

Certain factors that may adversely affect its reputation are beyond its control. Negative publicity about its partners, outsourced service providers or other counterparties, such as negative publicity about their debt collection practices and any failure by them to adequately protect the information of borrowers and lenders, to comply with applicable laws and regulations or to otherwise meet required quality and service standards could harm its reputation. Furthermore, any negative development in the online consumer finance marketplace industry, such as bankruptcies or failures of other consumer finance marketplaces, and especially a large number of such bankruptcies or failures, or negative perception of the industry as a whole, such as that arises from any failure of other consumer finance marketplaces to detect or prevent money laundering or other illegal activities, even if factually incorrect or based on isolated incidents, could compromise its image, undermine the trust and credibility NiSun BVI has established and impose a negative impact on its ability to attract new borrowers and lenders. Negative developments in the online consumer finance marketplace industry, such as widespread borrower defaults, fraudulent behavior and/or the closure of other online consumer finance marketplaces, may also lead to tightened regulatory scrutiny of the sector and limit the scope of permissible business activities that may be conducted by online consumer finance marketplaces like NiSunBVI. If any of the foregoing takes place, its business and results of operations could be materially and adversely affected.

Successful strategic relationships with traditional lending and guarantee institutions are important for NiSun BVI’s future success.

NiSun BVI anticipates that it will continue to leverage its existing strategic relationships with traditional lending and guarantee institutions to grow its business while NiSun BVI will also pursue new relationships with additional partners. Identifying, negotiating and documenting relationships with partners requires significant time and resources as does integrating third-party data and services into its system. NiSun BVI’s current agreements with traditional lending and guarantee institutions do not prohibit them from working with its competitors or from offering competing services. NiSun BVI’s competitors may be effective in providing incentives to such entities to favor their products or services, which may in turn reduce the volume of loans facilitated through its marketplace. In addition, partners may not perform as expected under its agreements with them, and NiSun BVI may have disagreements or disputes with such partners, which could adversely affect its brand and reputation. If NiSun BVI cannot successfully enter into and maintain effective strategic relationships with business partners, its business will be harmed.

Fluctuations in interest rates could negatively affect transaction volume.

All loans facilitated through NiSun BVI’s marketplace are issued with fixed interest rates. If interest rates rise, lenders who have already invested in a loan at a fixed rate through its platform may lose the opportunity to take advantage of the higher rates. If interest rates decrease after a loan is made, borrowers through its platform may prepay their loans to take advantage of the lower rates. As a result, fluctuations in the interest rate environment may discourage lenders and borrowers from participating in its marketplace, which may adversely affect its business.

NiSun BVI’s operations depend on the performance of the internet infrastructure and fixed telecommunications networks in China.

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, or the MIIT. NiSun BVI primarily relies on a limited number of telecommunication service providers to provide NiSunBVI with data communications capacity through local telecommunications lines and internet data centers to host its servers. NiSun BVI has limited access to alternative networks or services in the event of disruptions, failures or other problems with China’s internet infrastructure or the fixed telecommunications networks provided by telecommunication service providers. With the expansion of its business, NiSun BVI may be required to upgrade its technology and infrastructure to keep up with the increasing traffic on its platform. NiSun BVI cannot assure you that the internet infrastructure and the fixed telecommunications networks in China will be able to support the demands associated with the continued growth in internet usage.

In addition, NiSun BVI has no control over the costs of the services provided by telecommunication service providers. If the prices NiSun BVI pays for telecommunications and internet services rise significantly, its results of operations may be adversely affected. Furthermore, if internet access fees or other charges to internet users increase, its user traffic may decline and its business may be harmed.

Risks Related to NiSun BVI’s Corporate Structure and Operation

If the PRC government deems that the contractual arrangements in relation to NiSun BVI’s consolidated variable interest entity do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, it could be subject to severe penalties or be forced to relinquish its interests in those operations.

Foreign ownership of internet-based businesses, such as distribution of online information, is subject to restrictions under current PRC laws and regulations. For example, foreign investors are not allowed to own more than 50% of the equity interests in a value-added telecommunication service provider (except e-commerce) and any such foreign investor must have experience in providing value-added telecommunications services overseas and maintain a good track record in accordance with the Guidance Catalog of Industries for Foreign Investment promulgated in 2007, as amended in 2011, 2015 and 2017, respectively, and other applicable laws and regulations.

NiSun BVI is a British Virgin Islands company and its PRC subsidiary is considered a foreign invested enterprise. To comply with PRC laws and regulations, NiSun BVI conducts operations in China through a series of contractual arrangements entered into among Ning Cheng (Shanghai) Enterprise Management Group Co., Ltd. (“WFOE”), Fintech (Shanghai) Investment Holding Co., Ltd (“VIE”) and the shareholders of VIE. As a result of these contractual arrangements, NiSun BVI exerts control over VIE and consolidates its operating results in NiSun BVI’s financial statements under U.S. GAAP.

NiSun believes its current ownership structure, the ownership structure of its PRC subsidiary and consolidated VIE, and the contractual arrangements among WFOE, VIE and the shareholders of VIE are not in violation of existing PRC laws, rules and regulations; and these contractual arrangements are valid, binding and enforceable in accordance with their terms and applicable PRC laws and regulations currently in effect. However, there are substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations and there can be no assurance that the PRC government will ultimately take a view that is consistent with the opinion of NiSun BVI.

It is uncertain whether any new PRC laws, rules or regulations relating to variable interest entity structures will be adopted or if adopted, what they would provide. In particular, in January 2015, the Ministry of Commerce, or MOFCOM, published a discussion draft of the proposed Foreign Investment Law for public review and comments. Among other things, the draft Foreign Investment Law expands the definition of foreign investment and introduces the principle of “actual control” in determining whether a company is considered a foreign-invested enterprise, or an FIE. Under the draft Foreign Investment Law, variable interest entities would also be deemed as FIEs, if they are ultimately “controlled” by foreign investors, and be subject to restrictions on foreign investments. In December 2018, the Standing Committee of the National People’s Congress published a discussion draft of a new proposed Foreign Investment Law, aiming to replace the major existing laws governing foreign direct investment in China. On January 29, 2019, the discussion draft with slight revisions, or the New Draft Foreign Investment Law, was submitted for review. Pursuant to the New Draft Foreign Investment Law, foreign investments shall be subject to the negative list management system. However, the New Draft Foreign Investment Law does not mention “actual control” as regulated in the previous draft and the position to be taken with respect to the existing or future companies with the “variable interest entity” structure. On March 15, 2019, the Foreign Investment Law of the People’s Republic of China, or the Final Foreign Investment Law, with slight revision, is finally issued and will become effective on January 1, 2020.

Although variable interest entity structures are not included in the Final Foreign Investment Law, it is uncertain whether any interpretation and implementation of the Final Foreign Investment Law or new PRC laws, rules or regulations relating to variable interest entity structures will be adopted or if adopted, what they would provide. If the ownership structure, contractual arrangements and business of NiSun BVI, its PRC subsidiary or its consolidated variable interest entity are found to be in violation of any existing or future PRC laws or regulations, or NiSun BVI fails to obtain or maintain any of the required permits or approvals, the relevant governmental authorities would have broad discretion in dealing with such violation, including levying fines, confiscating its income or the income of its PRC subsidiary or consolidated variable interest entity, revoking the business licenses or operating licenses of its PRC subsidiary or consolidated variable interest entity, shutting down its servers or blocking its online platform, discontinuing or placing restrictions or onerous conditions on its operations, requiring NiSunBVI to undergo a costly and disruptive restructuring and taking other regulatory or enforcement actions that could be harmful to its business. Any of these actions could cause significant disruption to its business operations and severely damage its reputation, which would in turn materially and adversely affect its business, financial condition and results of operations. If any of these occurrences results in its inability to direct the activities of its consolidated variable interest entity, and/or its failure to receive economic benefits from its consolidated variable interest entity, NiSun BVI may not be able to consolidate VIE’s results into NiSun BVI’s consolidated financial statements in accordance with U.S. GAAP.

NiSun BVI relies on contractual arrangements with VIE and the shareholder of VIE for NiSun BVI’s business operations, which may not be as effective as direct ownership in providing operational control.

NiSun BVI has relied and expects to continue to rely on contractual arrangements with Fintech to operate its business in the future. These contractual arrangements may not be as effective as direct ownership in providing NiSun BVI with control over its consolidated variable interest entity. For example, NiSun BVI’s consolidated variable interest entity and its shareholders could breach their contractual arrangements with NiSun BVI by, among other things, failing to conduct their operations, in an acceptable manner or taking other actions that are detrimental to NiSun BVI’s interests.

If NiSun BVI had direct ownership of VIE, NiSun BVI would be able to exercise its rights as a shareholder to effect changes in the board of directors of VIE, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level. However, under the current contractual arrangements, NiSun BVI relies on the performance by VIE and its shareholders of their obligations under the contracts to exercise control over its consolidated variable interest entity. The shareholders of VIE may not act in the best interests of NiSun BVI or may not perform their obligations under these contracts. Such risks exist throughout the period in which NiSun BVI intends to operate its business through the contractual arrangements with VIE. Although NiSun BVI has the right to replace any shareholder of its consolidated variable interest entity under the contractual arrangement, if any shareholder of its consolidated variable interest entity is uncooperative or any dispute relating to these contracts remains unresolved, it will have to enforce its rights under these contracts through the operations of PRC laws and arbitration, litigation and other legal proceedings and therefore will be subject to uncertainties in the PRC legal system. Therefore, these contractual arrangements with VIE may not be as effective in ensuring NiSun BVI’s control over the relevant portion of its business operations as direct ownership would be.

Any failure by NiSun BVI’s consolidated VIE or its shareholder to perform its obligations under NiSun BVI’s contractual arrangements with them would have a material adverse effect on its business.

If NiSun BVI’s consolidated VIE or its shareholder fails to perform their respective obligations under the contractual arrangements, NiSun BVI may have to incur substantial costs and expend additional resources to enforce such arrangements. NiSun BVI may also have to rely on legal remedies under PRC laws, including seeking specific performance or injunctive relief, and claiming damages, which NiSun BVI cannot assure you will be effective under PRC laws. For example, if the shareholder of VIE were to refuse to transfer his equity interest in VIE to NiSun BVI or its designee if it exercises the purchase option pursuant to these contractual arrangements, or if they were otherwise to act in bad faith toward NiSunBVI, then NiSun BVI may have to take legal actions to compel them to perform their contractual obligations.

All the agreements under its contractual arrangements are governed by PRC laws and provide for the resolution of disputes through arbitration in China. Accordingly, these contracts would be interpreted in accordance with PRC laws and any disputes would be resolved in accordance with PRC legal procedures. The legal system in the PRC is not as developed as in some other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could limit its ability to enforce these contractual arrangements. Meanwhile, there are very few precedents and little formal guidance as to how contractual arrangements in the context of a consolidated variable interest entity should be interpreted or enforced under PRC laws. There remain significant uncertainties regarding the ultimate outcome of such arbitration should legal action become necessary. In addition, under PRC laws, rulings by arbitrators are final and parties cannot appeal arbitration results in court unless such rulings are revoked or determined unenforceable by a competent court. If the losing parties fail to carry out the arbitration awards within a prescribed time limit, the prevailing parties may only enforce the arbitration awards in PRC courts through arbitration award recognition proceedings, which would require additional expenses and delay. In the event that NiSun BVI is unable to enforce these contractual arrangements, or if NiSun BVI suffers significant delay or other obstacles in the process of enforcing these contractual arrangements, NiSun BVI may not be able to exert effective control over its consolidated variable interest entity, and its ability to conduct its business may be negatively affected.

The shareholder of VIE may have potential conflicts of interest with NiSun BVI, which may materially and adversely affect its business and financial condition.

The equity interests of VIE are held by Mr. Bodang Liu. His interest in VIE may differ from the interests of NiSun BVI as a whole. He may breach, or cause VIE to breach, the existing contractual arrangements NiSun BVI has with them and its consolidated variable interest entity, which would have a material adverse effect on NiSun BVI’s ability to effectively control its consolidated variable interest entity and receive economic benefits from it. For example, Mr. Liu may be able to cause NiSun BVI’s agreements with VIE to be performed in a manner adverse to NiSun BVI by, among other things, failing to remit payments due under the contractual arrangements to NiSunBVI on a timely basis. NiSun BVI cannot assure you that when conflicts of interest arise, any or all of these shareholders will act in the best interests of NiSun BVI or such conflicts will be resolved in its favor.

Currently, NiSun BVI does not have any arrangements to address potential conflicts of interest between VIE shareholders and NiSun BVI, except that NiSun BVI could exercise its purchase option under the exclusive option agreements with these shareholders to request them to transfer all of their equity interests in VIE to a PRC entity or individual designated by NiSunBVI, to the extent permitted by PRC laws. If NiSun BVI cannot resolve any conflict of interest or dispute between NiSun BVI and the shareholders of VIE, NiSun BVI would have to rely on legal proceedings, which could result in the disruption of its business and subject it to substantial uncertainty as to the outcome of any such legal proceedings.

Contractual arrangements in relation to NiSun BVI’s consolidated variable interest entity may be subject to scrutiny by the PRC tax authorities and they may determine that NiSun BVI or its PRC consolidated variable interest entity owes additional taxes, which could negatively affect its financial condition and the value of your investment.

Under applicable PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the PRC tax authorities within ten years after the taxable year when the transactions are conducted. The PRC enterprise income tax law requires every enterprise in China to submit its annual enterprise income tax return together with a report on transactions with its related parties to the relevant tax authorities. The tax authorities may impose reasonable adjustments on taxation if they have identified any related party transactions that are inconsistent with arm’s length principles. NiSunBVI may face material and adverse tax consequences if the PRC tax authorities determine that the contractual arrangements between WFOE, its wholly-owned subsidiary in China, its consolidated VIE in China, and the shareholder of VIE were not entered into on an arm’s length basis in such a way as to result in an impermissible reduction in taxes under applicable PRC laws, rules and regulations, and adjust VIE’s income in the form of a transfer pricing adjustment. A transfer pricing adjustment could, among other things, result in a reduction of expense deductions recorded by VIE for PRC tax purposes, which could in turn increase its tax liabilities without reducing WFOEs’ tax expenses. In addition, if WFOE requests the shareholders of VIE to transfer their equity interests in VIE at nominal or no value pursuant to these contractual arrangements, such transfer could be viewed as a gift and subject VIE to PRC income tax. Furthermore, the PRC tax authorities may impose late payment fees and other penalties on VIE for the adjusted but unpaid taxes according to the applicable regulations. NiSun BVI’s financial position could be materially and adversely affected if its consolidated variable interest entity’s tax liabilities increase or if it is required to pay late payment fees and other penalties.

NiSunBVI may lose the ability to use and enjoy assets held by its consolidated VIE that are material to the operation of its business if VIE goes bankrupt or becomes subject to a dissolution or liquidation proceeding.

VIE holds certain assets that are material to the operation of NiSun BVI business, including domain names and equipment for online lending marketplace. Under the contractual arrangements, its consolidated VIE may not and its shareholder may not cause it to, in any manner, sell, transfer, mortgage or dispose of their assets or their legal or beneficial interests in the business without its prior consent. However, in the event its consolidated VIE’s shareholder breaches these contractual arrangements and voluntarily liquidates VIE or VIE declares bankruptcy and all or part of its assets become subject to liens or rights of third-party creditors, or are otherwise disposed of without NiSun BVI’s consent, it may be unable to continue some or all of its business activities, which could materially and adversely affect its business, financial condition and results of operations. If VIE undergoes a voluntary or involuntary liquidation proceeding, independent third-party creditors may claim rights to some or all of these assets, thereby hindering NiSun BVI’s ability to operate its business, which could materially and adversely affect its business, financial condition and results of operations.

THE SPECIAL MEETING

Date, Time and Place of the Special Meeting

The Special Meeting will be held at 10:00 a.m., local time, on June 14, 2019, at our executive offices at No. 936, Jinhai 2nd Road, Konggang New Area, Longwan District, Wenzhou City, Zhejiang Province, China, to consider and vote upon the transaction.

Purpose of the Special Meeting

At the Special Meeting, HEBT is asking its shareholders as of the record date of May 14, 2019 (the “ Record Date ”) to consider and vote upon:

Record Date; Shares Entitled to Vote; Quorum

Shareholders will be entitled to vote or direct votes to be cast at the Special Meeting if they owned HEBT common shares on the Record Date. Shareholders will have one vote for each share of HEBT Class A common shares and five votes for each share of HEBT Class B common shares owned at the close of business on the Record Date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.

As of the close of business on the Record Date, there were 16,269,577 outstanding HEBT common shares, consisting of 8,491,177 Class A common shares and 7,778,400 Class B common shares. All Class B common shares are beneficially owned by our Chief Executive Officer, Mr. Anyuan Sun, who beneficially owns 1,800,000 Class B common shares through Wise Metro Development Co., Ltd. and 5,978,400 Class B common shares through Mr. Zuoqiao Sun Zhang.

A quorum of HEBT shareholders is necessary to hold a valid meeting. A quorum will be present at the Special Meeting if one-third (1/3) of the outstanding shares entitled to vote at the meeting are represented in person or by proxy. For purposes of determining quorum, Class A and Class B common shares will be counted as a group, and one-third of the total voting power must be present in person or by proxy to satisfy quorum requirements. Abstentions will count as present for the purposes of establishing a quorum but will be disregarded for purposes of determining the results of voting.

Vote Required; Abstentions and Broker Non-Votes

The affirmative vote of the holders of a majority of votes cast by our common shares that are present in person or by proxy at our special meeting is required to approve the Reverse Split Proposal. For the Reverse Split Proposal, Class A shares will have one vote per share, Class B shares will have five votes per share, and Class A and Class B shares will be counted as a single group, with a majority of the group required for approval.

The affirmative vote of the holders of a majority of votes cast by each class of our common shares that are present in person or by proxy at our special meeting is required to approve the Share Transfer Proposal, NiSun Proposal and Option Proposal. For the Share Transfer Proposal, NiSun Proposal and Option Proposal, Class A shares will have one vote per share, Class B shares will have five votes per share, and Class A and Class B shares will be counted separately, with a majority of each class required for approval.

Approval of the Adjournment Proposal whether or not a quorum is present, requires the affirmative vote of a majority of the votes cast by our shareholders entitled to vote.

Abstentions and broker non-votes will count for purposes of determining quorum but will have no effect on the outcome of the vote because abstentions and broker non-votes do not count as votes cast.

Voting of Proxies

If your shares are registered in your name with our transfer agent, TranShare Corporation, you may cause your shares to be voted by returning a signed proxy card, or you may vote in person at the special meeting. Additionally, you may submit electronically over the Internet or by phone a proxy authorizing the voting of your shares by following the instructions on your proxy card. You must have the enclosed proxy card available, and follow the instructions on the proxy card, in order to submit a proxy electronically over the Internet or by telephone. Based on your proxy cards or Internet and telephone proxies, the proxy holders will vote your shares according to your directions.

If you plan to attend the Special Meeting and wish to vote in person, you will be given a ballot at the meeting. If your shares are registered in your name, you are encouraged to vote by proxy even if you plan to attend the Special Meeting in person. If you attend the Special Meeting and vote in person, your vote by ballot will revoke any proxy previously submitted.

Voting instructions are included on your proxy card. All shares represented by properly executed proxies received in time for the Special Meeting will be voted at the Special Meeting in accordance with the instructions of the shareholder.

If your shares are held in “street name” through a broker, bank or other nominee, you may vote through your broker, bank or other nominee by completing and returning the voting form provided by your broker, bank or other nominee, or by the Internet or telephone through your broker, bank or other nominee if such a service is provided. To vote via the Internet or telephone through your broker, bank or other nominee, you should follow the instructions on the voting form provided by your broker, bank or other nominee. If you do not return your bank’s, broker’s or other nominee’s voting form, do not vote via the Internet or telephone through your broker, bank or other nominee, if possible, or do not attend the special meeting and vote in person with a proxy from your broker, bank or other nominee, it will have the same effect as if you voted “ AGAINST ”.

Revocability of Proxies

If you are a shareholder of record, you may change your vote or revoke your proxy at any time before it is voted at the Special Meeting by:

Please note that to be effective, your new proxy card, internet or telephonic voting instructions or written notice of revocation must be received by us prior to the Special Meeting and, in the case of internet or telephonic voting instructions, must be received before 11:59 p.m. Eastern time on June 13, 2019. If you have submitted a proxy, your appearance at the Special Meeting, in the absence of voting in person or submitting an additional proxy or revocation, will not have the effect of revoking your prior proxy.

If you hold your common shares in “street name,” you should contact your bank, broker or other nominee for instructions regarding how to change your vote. You may also vote in person at the special meeting if you obtain a valid “legal” proxy from your bank, broker or other nominee. Any adjournment, recess or postponement of the Special Meeting for the purpose of soliciting additional proxies will allow HEBT shareholders who have already sent in their proxies to revoke them at any time prior to their use at the Special Meeting as adjourned, recessed or postponed.

Board of Directors’ Recommendation

After careful consideration, the Company’s board of directors has determined that the transaction is fair to, and in the best interest of, the Company and its shareholders. They unanimously recommend that you vote or give instruction to vote:

Solicitation of Proxies

The expense of soliciting proxies in the enclosed form will be borne by HEBT. Proxies may also be solicited by some of our directors, officers and employees, personally or by telephone, facsimile, email or other means of communication. No additional compensation will be paid for such services.

Anticipated Date of Completion of the Transaction

Assuming timely satisfaction of necessary closing conditions, we anticipate that the transaction will be consummated by the fourth quarter of 2019.

Other Matters

At this time, we know of no other matters to be submitted at the Special Meeting.

Householding of Special Meeting Materials

Unless we have received contrary instructions, we may send a single copy of this proxy statement 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 “house holding”, reduces the volume of duplicate information received at your household and helps to reduce our expenses.

Who Can Answer Your Questions About Voting Your Shares?

If you are a shareholder and have any questions about how to vote or direct a vote in respect of your HEBT common shares, you may submit questions via email to xbl@china-xbl.com.

PROPOSAL 1: REVERSE SPLIT PROPOSAL

Our board of directors has adopted resolutions (i) declaring that filing an amendment to the Company’s Memorandum and Articles of Association to effect the Reverse Split of our issued and outstanding common shares was advisable, and (ii) directing that a proposal to approve the Reverse Split be submitted to the holders of our common shares for their approval. The Reverse Split of our issued and outstanding common shares will be effected by a reverse split at a ratio of not less than one-for-two and not more than one-for-ten at any time prior to December 31, 2019, with the exact ratios to be set at a whole number within this range as determined by our board of directors in its sole discretion. Immediately upon completion of the Reverse Split, our common shares will have a bid price of at least $1.00.

Our board of directors is submitting the Reverse Split to our shareholders for approval with the intent of increasing the market price of our common stock to enhance our ability to meet the continued listing requirements of the Nasdaq Capital Market. Even if shareholders approve the Reverse Split Proposal, the Board of Directors acting in its discretion could elect not to complete a Reverse Split if it determines such action to be in the best interests of the Company and its shareholders.

Procedure for Implementing the Reverse Split

The Reverse Split, if approved by our stockholders, would become effective upon the filing (the “ RS Effective Time ”) of a certificate of amendment to our Articles and Memorandum of Association in the British Virgin Islands. The exact timing of the filing of the certificate of amendment that will effect the Reverse Split will be determined by our board of directors based on its evaluation as to when such action will be the most advantageous to the Company and our shareholders. In addition, our board of directors reserves the right, notwithstanding stockholder approval and without further action by the stockholders, to elect not to proceed with the Reverse Split if, at any time prior to filing the amendment to the Company’s Memorandum and Articles of Association, our board of directors, in its sole discretion, determines that it is no longer in our best interest and the best interests of our shareholders to proceed with the Reverse Split. If a certificate of amendment effecting the Reverse Split has not been filed in the British Virgin Islands by the close of business on December 31, 2019, our board of directors will abandon the Reverse Split.

Effect of the Reverse Split on holders of HEBT common shares

Depending on the ratio for the Reverse Split determined by our board of directors, a minimum of two and a maximum of ten shares of existing common stock will be combined into one new common share. The actual number of shares issued after giving effect to the Reverse Split, if implemented, will depend on the reverse split ratio that is ultimately determined by our board of directors.

The Reverse Split will affect all holders of our common shares uniformly and will not affect any shareholder’s percentage ownership interest in the Company, except that as described below in “Fractional Shares,” record holders of common shares otherwise entitled to a fractional share as a result of the Reverse Split will be rounded up to the next whole number. In addition, the Reverse Split will not affect any shareholder’s proportionate voting power (subject to the treatment of fractional shares). If the Reverse Split Proposal is approved but the Share Transfer Proposal, NiSun Proposal and Option Proposal are not approved, then we would continue have two classes of shares outstanding, and holders of Class B shares would continue to have five votes per share, while holders of Class A shares would have one vote per share.

The Reverse Split may result in some shareholders owning “odd lots” of less than 100 common shares. Odd lot shares may be more difficult to sell, and brokerage commissions and other costs of transactions in odd lots are generally somewhat higher than the costs of transactions in “round lots” of even multiples of 100 shares.

Beneficial Holders of Common Shares (i.e. shareholders who hold in street name)

Upon the implementation of the Reverse Split, we intend to treat shares held by shareholders through a bank, broker, custodian or other nominee in the same manner as registered shareholders whose shares are registered in their names. Banks, brokers, custodians or other nominees will be instructed to affect the Reverse Split for their beneficial holders holding our common shares in street name. However, these banks, brokers, custodians or other nominees may have different procedures than registered shareholders for processing the Reverse Split. Shareholders who hold our common shares with a bank, broker, custodian or other nominee and who have any questions in this regard are encouraged to contact their banks, brokers, custodians or other nominees.

Registered “Book-Entry” Holders of Common Shares (i.e. shareholders that are registered on the transfer agent’s books and records but do not hold share certificates)

Certain of our registered holders of common shares may hold some or all of their shares electronically in book-entry form with the transfer agent. These shareholders do not have share certificates evidencing their ownership of the common shares. They are, however, provided with a statement reflecting the number of shares registered in their accounts.

Shareholders who hold shares electronically in book-entry form with the transfer agent will not need to take action (the exchange will be automatic) to receive whole shares of post-Reverse Split common shares, subject to adjustment for treatment of fractional shares.

Holders of Certificated Common Shares

Shareholders holding common shares in certificated form will be sent a transmittal letter by our transfer agent after the RS Effective Time. The letter of transmittal will contain instructions on how a shareholder should surrender his, her or its certificate(s) representing common shares (the “ Old Certificates ”) to the transfer agent in exchange for certificates representing the appropriate number of whole shares of post-Reverse Split common shares (the “ New Certificates ”). No New Certificates will be issued to a shareholder until such shareholder has surrendered all Old Certificates, together with a properly completed and executed letter of transmittal, to the transfer agent. No shareholder will be required to pay a transfer or other fee to exchange his, her or its Old Certificates. Shareholders will then receive a New Certificate(s) representing the number of whole common shares that they are entitled as a result of the Reverse Split, subject to the treatment of fractional shares described below. Until surrendered, we will deem outstanding Old Certificates held by shareholders to be cancelled and only to represent the number of whole shares of post-Reverse Split common shares to which these shareholders are entitled, subject to the treatment of fractional shares. Any Old Certificates submitted for exchange, whether because of a sale, transfer or other disposition of shares, will automatically be exchanged for New Certificates. If an Old Certificate has a restrictive legend on the back of the Old Certificate(s), the New Certificate will be issued with the same restrictive legends that are on the back of the Old Certificate(s).

SHAREHOLDERS SHOULD NOT DESTROY ANY SHARE CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY SHARE CERTIFICATE(S) UNTIL REQUESTED TO DO SO.

Fractional Shares

We do not currently intend to issue fractional shares in connection with the Reverse Split. Therefore, we will not issue certificates representing fractional shares. In lieu of issuing fractions of shares, we will round up to the next whole number.

Accounting Matters

The proposed amendment to the Company’s Certificate of Incorporation will not affect the par value of our common shares per share, which will remain $0.001 par value per share. As a result, as of the RS Effective Time, the stated capital attributable to common stock and the additional paid-in capital account on our balance sheet will not change due to the Reverse Split. Reported per share net income or loss will be higher because there will be fewer common shares outstanding.

Federal Income Tax Consequences of the Reverse Split

The following summary describes material U.S. federal income tax consequences of the Reverse Split to holders of our common shares.

Unless otherwise specifically indicated herein, this summary addresses the tax consequences only to a beneficial owner of our common stock that is a citizen or individual resident of the United States, a corporation organized in or under the laws of the United States or any state thereof or the District of Columbia or otherwise subject to U.S. federal income taxation on a net income basis in respect of our common stock (a “ U.S. holder ”). A trust may also be a U.S. holder if (1) a U.S. court is able to exercise primary supervision over administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in place to be treated as a U.S. person. An estate whose income is subject to U.S. federal income taxation regardless of its source may also be a U.S. holder. This summary does not address all of the tax consequences that may be relevant to any particular investor, including tax considerations that arise from rules of general application to all taxpayers or to certain classes of taxpayers or that are generally assumed to be known by investors. This summary also does not address the tax consequences to (i) persons that may be subject to special treatment under U.S. federal income tax law, such as banks, insurance companies, thrift institutions, regulated investment companies, real estate investment trusts, tax-exempt organizations, U.S. expatriates, persons subject to the alternative minimum tax, traders in securities that elect to mark to market and dealers in securities or currencies, (ii) persons that hold our common stock as part of a position in a “straddle” or as part of a “hedging,” “conversion” or other integrated investment transaction for federal income tax purposes, or (iii) persons that do not hold our common stock as “capital assets” (generally, property held for investment).

If a partnership (or other entity classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of our common stock, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the activities of the partnership. Partnerships that hold our common stock, and partners in such partnerships, should consult their own tax advisors regarding the U.S. federal income tax consequences of the Reverse Stock Split.

This summary is based on the provisions of the Internal Revenue Code of 1986, as amended, U.S. Treasury regulations, administrative rulings and judicial authority, all as in effect as of the date of this proxy statement. Subsequent developments in U.S. federal income tax law, including changes in law or differing interpretations, which may be applied retroactively, could have a material effect on the U.S. federal income tax consequences of the Reverse Split.

PLEASE CONSULT YOUR OWN TAX ADVISOR REGARDING THE U.S. FEDERAL, STATE, LOCAL, AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES OF THE REVERSE SPLIT IN YOUR PARTICULAR CIRCUMSTANCES UNDER THE INTERNAL REVENUE CODE AND THE LAWS OF ANY OTHER TAXING JURISDICTION.

U.S. Holders

The Reverse Split should be treated as a recapitalization for U.S. federal income tax purposes. Therefore, a stockholder generally will not recognize gain or loss on the Reverse Split, except to the extent of cash, if any, received in lieu of a fractional share interest in the post-Reverse Split shares. The aggregate tax basis of the post-split shares received will be equal to the aggregate tax basis of the pre-split shares exchanged therefore (excluding any portion of the holder’s basis allocated to fractional shares), and the holding period of the post-split shares received will include the holding period of the pre-split shares exchanged. A holder of the pre-split shares who receives cash will generally recognize gain or loss equal to the difference between the portion of the tax basis of the pre-split shares allocated to the fractional share interest and the cash received. Such gain or loss will be a capital gain or loss and will be short term if the pre-split shares were held for one year or less and long term if held more than one year. No gain or loss will be recognized by us as a result of the Reverse Split.

No Appraisal Rights

Under the BVI law and our charter documents, holders of our common shares will not be entitled to dissenter’s rights or appraisal rights with respect to the Reverse Split.

Required Vote

The affirmative vote of the holders of a majority of votes cast by our common shares that are present in person or by proxy at our special meeting is required to approve the Reverse Split Proposal, provided we have quorum for the meeting. For the Reverse Split Proposal, Class A shares will have one vote per share, Class B shares will have five votes per share, and Class A and Class B shares will be counted as a single group, with a majority of the group required for approval.

PROPOSAL 2: SHARE TRANSFER PROPOSAL

As of the date of this proxy, HEBT has issued and outstanding 16,269,577 common shares, consisting of 8,491,177 Class A common shares and 7,778,400 Class B common shares. All Class B common shares are beneficially owned by our Chief Executive Officer, Mr. Anyuan Sun, who beneficially owns 1,800,000 Class B common shares through Wise Metro Development Co., Ltd. and 5,978,400 Class B common shares through Mr. Zuoqiao Sun Zhang. Class A common shares have one vote per share, while Class B common shares have five votes per share. Although Mr. Sun owns approximately 47.8% of all outstanding common shares, his Class B common shares give him in the aggregate 82.1% of the voting power of HEBT’s capital stock. This concentrated control may limit or preclude other shareholders’ ability to influence corporate matters for the foreseeable future, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring shareholder approval. In addition, this may prevent or discourage unsolicited acquisition proposals or offers for our capital stock that you may feel are in your best interest as one of our shareholders.

For this reason, as a condition of considering the matters before this Special Shareholder Meeting, the Board of Directors required that if the Class B common shares were to transfer from the Sellers to the Buyer, such shares would need to convert automatically into Class A common shares at the time of transfer. Upon such transfer the Company will have no issued and outstanding Class B common shares. Upon such automatic conversion, the Shares will be entitled to one vote per share, compared with five votes per each Class B common share.

Purchase Price for Share Transfer

On April 16, 2019, the date of the Share Purchase Agreement, the closing price for HEBT’s common shares was $0.893 per share. The purchase price for the Shares was set at an aggregate of $9 million, or $1.16 per share, a premium of $0.267 per share.

Within 10 business days following the execution of the Share Purchase Agreement, Buyer was required to deposit the Purchase Price in an account established for such purpose with Zhongpeng Law Firm. The Buyer was permitted to deposit up to 30% of the Purchase Price in the form of a non-interest bearing promissory note payable in full on or before December 31, 2019, with the remainder in cash. At the same time, the Sellers were required to deposit documentary evidence showing ownership of the Shares and irrevocable stock powers, together with signed instructions. The parties agreed to these steps to ensure that, upon the receipt of shareholder approval, the Share Transfer Proposal would be promptly completed.

Closing of the Share Transfer

The Closing of the Share Transfer is to occur at 10:00 AM, Eastern Standard Time, within five days following the latest of (i) receipt of payment for the Shares by the Sellers, (ii) delivery of all remaining closing deliveries and (iii) the satisfaction (or waiver) of the conditions to closing set forth in the Share Purchase Agreement, or such other time as is mutually acceptable between the parties.

Proceeds from the Share Transfer Proposal

Upon closing of the share transfer, the Sellers will receive the purchase price. HEBT will not receive any payment in connection with the Share Transfer Proposal.

Interests of Management in the Transaction

The Sellers consist of (1) Wise Metro Development Co., Ltd., a British Virgin Islands company of which Mr. Anyuan Sun is the sole shareholder and (2) Mr. Zuoqiao Sun Zhang, who is a member of HEBT’s Board of Directors and father to both Mr. Anyuan Sun and Mr. Lingmin Sun, both of whom are also directors of the Company. Mr. Anyuan Sun is also the Chief Executive Officer of the Company. Mr. Anyuan Sun is the beneficial owner of all of the Shares being sold to the Buyer. Due to the interested nature of this transaction, Mr. Anyuan Sun and Mr. Sun Zhang did not participate in the discussions and voting on this matter at HEBT’s board of directors.

Required Vote

The affirmative vote of the holders of a majority of votes cast by each class of our common shares that are present in person or by proxy at our special meeting is required to approve the Share Transfer Proposal, NiSun Proposal and Option Proposal. For the Share Transfer Proposal, NiSun Proposal and Option Proposal, Class A shares will have one vote per share, Class B shares will have five votes per share, and Class A and Class B shares will be counted separately, with a majority of each class required for approval.

THE HEBT BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT HEBT SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE SHARE PURCHASE PROPOSAL.

PROPOSAL 3: NISUN PROPOSAL

HEBT is requesting shareholder approval of a plan to purchase all of the equity of NiSun BVI. By virtue of NiSun BVI’s ownership of NiSun HK, NiSun HK’s ownership of WFOE and WFOE’s contractual control over Fintech (see Summary beginning on page 10), NiSun BVI effectively controls Fintech, a Chinese company that provides online recommendation services of institutional financial products through its online marketplace in the PRC.

HEBT’s Board of Directors has considered the opportunities presented by acquiring NiSun BVI and believes that it is in the best interests of the company and its shareholders to purchase all of the equity of NiSun BVI from Mr. Bodang Liu, NiSun BVI’s sole shareholder. Although NiSun BVI is a relatively young company, in operation for less than five years, the Board considers the growth opportunities to merit consideration by HEBT’s shareholders at this Special Meeting.

NiSun BVI is primarily engaged in the operation of its online marketplace for providing online recommendation services of financial products. Individual users can access institutional financial products through NiSun BVI’s online marketplace. NiSun BVI recommends these financial products to individual investors. NiSun BVI’s online marketplace has operated since January 2018. For the years ended December 31, 2018 and 2017, all the financial products transacted through NiSun BVI’s online marketplace were debt products issued by financial institutions.

NiSun BVI provides services in respect of debt products offered by the financial institutions on its online marketplace, and assists financial institutions to identify qualified individual investors. NiSun BVI considers the financial institutions to be its customers, and charges service fees from the financial institutions.

Loan Origination Service Fee

For NiSun BVI’s services that match investors and borrowers through its online platform, NiSun BVI charges a service fee from borrowers for each effected loan facilitated, which is accounted for as revenue, and immediately deducted from the proceeds to the borrowers when a loan is initiated. The service fee is 1.5%-3.0% of the total amount of each loan, depending on the duration of the loan.

Loan Repayment Management Fee

For NiSun BVI’s services that assist in repayments of outstanding loans through NiSun BVI’s online platform, it charges a separate fee from borrowers for each loan repayment facilitated, which is accounted for as revenue, and immediately remitted to us when a loan matures and the borrower repays the loan. The loan repayment management fee is based on an agreed upon percentage around 0.3% of the borrowing amount times the duration of the loan and is collected from the borrower upon repayment of the loan.

Financial Results of NiSun BVI

The audited financial statements of NiSun BVI for the years ended December 31, 2018 and 2017 are included in this proxy statement. These materials have been provided by NiSun BVI and HEBT has not otherwise verified the information provided.

NiSun International Enterprise Management Group (British Virgin Islands) Co., Ltd.

TABLE OF CONTENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

NiSun International Enterprise Management Group (British Virgin Islands) Co., Ltd.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets NiSun International Enterprise Management Group (British Virgin Islands) Co., Ltd. and its subsidiaries (collectively, the “Company”) as of December 31, 2018 and 2017, and the related consolidated statements of operations and comprehensive loss, changes in shareholders’ equity, and cash flows for each of the two years in the period ended December 31, 2018, and the related notes (collectively referred to as the “consolidated financial statements”). 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 2017, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. 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.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits 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’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the 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 statement. We believe that our audits provide a reasonable basis for our opinion.

/s/ Friedman LLP

We have served as the Company’s auditor since 2019.

New York, New York

June 4, 2019

NiSun International Enterprise Management Group (British Virgin Islands) Co., Ltd.

Exhibit 99.2

Annex A: Share Purchase Agreement

THIS SHARE PURCHASE AGREEMENT (the “ Agreement ”) is dated as of April 16, 2019, by and among (a) Hebron Technology Co., Ltd. (NASDAQ: HEBT), a British Virgin Islands company (the “ Company ”), (b) Wise Metro Development Co., Ltd., a British Virgin Islands company (“ Wise ”), (c) Mr. Zuoqiao Sun Zhang, a citizen of Guatemala (“ Sun Zhang ”; and together with Wise, “ Sellers ”) and (d) NiSun International Enterprise Management Group Co., Ltd., a company organized under the laws of Cayman Islands (the “ Buyer ” and, together with the Sellers and Company, the “ Parties ” and each, a “ Party ”).

WHEREAS:

A. The Sellers and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by (i) Section 4(a)(7) of the Securities Act of 1933, as amended (the “ 1933 Act ”) and (ii) Rule 903 of Regulation S (“ Regulation S ”), both as promulgated by the U.S. Securities and Exchange Commission (the “ SEC ”) under the 1933 Act.

B. The Buyer wishes to purchase, and the Sellers wish to sell, upon the terms and conditions stated in this Agreement, (a) Wise’s 1,800,000 Class B Common Shares, par value $0.001 per share (the “ Common Shares ”) of the Company and (b) Sun Zhang’s 5,978,400 Class B Common Shares of the Company, which will together constitute approximately 47.8% of all of the Company’s outstanding Common Shares at the time of the Closing on a fully diluted basis (Wise’s and Sun Zhang’s Class B Common Shares are referred to as the “ Shares ”).

C. The Parties acknowledge and agree that the Shares will automatically convert into Class A Common Shares upon transfer from the Sellers to the Buyer, and upon such transfer the Company will have no issued and outstanding Class B Common Shares. Upon such automatic conversion, the Shares will be entitled to one vote per share.

D. Simultaneously with the sale and transfer of the Shares, the Company wishes to cause one of its subsidiaries to enter into a series of contracts acquire effective control over Fintech (shanghai) Investment Holding Co., Ltd (in Chinese, 范太克 (上海) 投资控股有限公司 , “Fintech”), a Chinese company focused on the provision of certain financial services in return for cash or cash equivalents to be determined as set forth herein (the “ Fintech Acquisition ”).

E. Simultaneously with the sale and transfer of the Shares, the Company wishes to grant to Sellers or their designee the option to purchase the Company’s equity interest in Zhejiang Xibolun Automation Project Technology Co., Ltd., the Company’s 49% equity interest in Xuzhou Weijia Biotechnology Co., Ltd. and the Company’s equity interest in Wenzhou Xibolun Fluid Equipment Co., Limited, Chinese operating subsidiaries of the Company, on such terms as are set forth herein (the “ Purchase Option ”).

F. The Parties intend for all of the promises and obligations discussed herein to be subject to and contingent upon compliance with the SEC Regulations and NASDAQ Stock Market Rules, and no party intends for any transfer or transaction to occur in the absence of such compliance. In particular, the Parties plan to obtain shareholder approval of any transactions contemplated hereby or related hereto to the extent required and not to take any action that would result in the delisting from the Nasdaq Capital Market. Moreover, the Parties acknowledge and agree that the obligations hereunder shall be expressly contingent upon receipt of approval of the shareholders of the Company at a special meeting called for such purpose.

G. The board of directors of Wise has (i) approved the execution, delivery and performance by Wise of this Agreement and consummation of the transactions contemplated hereby and (ii) declared it advisable for Wise to enter into this Agreement.

H. The board of directors of the Buyer has (i) approved the execution, delivery and performance by the Buyer of this Agreement and consummation of the transactions contemplated hereby and (ii) declared it advisable for the Buyer to enter into this Agreement.

I. The board of directors of the Company (the “ Board of Directors ”), acting upon the unanimous recommendation of a special committee of independent directors of the Board of Directors, has (i) determined that it is in the best interest of the Company and its shareholders, and declared it advisable, to enter into this Agreement, and (ii) approved the execution, delivery and performance by the Company of this Agreement and consummation of the transactions contemplated hereby.

NOW, THEREFORE , the Parties hereby agree as follows:

1. PURCHASE AND SALE OF SHARES .

(a) Sale of Shares . Subject to the satisfaction (or waiver) of the conditions set forth in Sections 9 and 10 below, (i) the Sellers shall transfer to the Buyer, and the Buyer agrees to purchase from the Sellers, on the Closing Date (as defined below), the Shares; and (ii) the Company shall consent to and effect the transfer of such Shares from the Sellers to the Buyer on the books of the Company (the “ Closing ”).

(b) Performance Payment . The parties acknowledge and agree that the termination without cause or breach of the terms of this Agreement by Buyer or Sellers would cause substantial damage to the Company. For this reason, the Sellers (a group and not individually) and Buyer each agree to pay the Company a sum of $200,000 (such amount the “Break Fee”) under the circumstances set forth in this Section 1(b). The Break Fee shall be in addition to any other rights at law or in equity the parties may have in the event of termination or breach of this Agreement. If this Agreement is terminated by Sellers or Buyer without cause, such terminating Party shall pay the Break Fee to the Company within five (5) days’ demand for payment by the Company. If this Agreement is terminated by Sellers or Buyer due to the breach of this Agreement by the other party, such breaching Party shall pay the Break Fee to the Company within five (5) days’ demand for payment by the Company. If this Agreement is terminated by the Company due to the Sellers’ or Buyer’s breach of this Agreement, such breaching Party shall pay the Break Fee to the Company within five (5) days’ demand for payment by the Company. For the avoidance of doubt, in the context of this section, the phrase “without cause” means the termination of this Agreement in the absence of a breach of this Agreement, and termination due to breach shall refer to a material breach of this Agreement that is impossible to cure or that is not cured within ten (10) days after delivery of written demand for such cure.

(c) Deposit of Purchase Price and Shares . Within ten (10) business days of execution of this Agreement:

(i) Buyer shall deposit the Purchase Price (as defined below) in an account established for such purpose with Zhongpeng Law Firm (the “ Escrow Agent ”), a PRC Law Corporation. Such Purchase Price shall be sufficient to ensure that Buyer is able to perform fully its obligation to purchase the Shares hereunder; provided, however, that the Buyer may deposit up to 30% of the Purchase Price in the form of a non-interest bearing promissory note payable in full on or before December 31, 2019 and the remainder in cash.

(ii) Sellers shall deposit with the Escrow Agent (a) stock certificates or other documentary materials evidencing the Shares and Sellers’ rights as to such shares, (b) fully executed but undated irrevocable stock powers, together with signed instructions to the Escrow Agent to insert the date upon closing and deliver such stock powers to the Company’s transfer agent for transfer as of the Closing Date (as defined below), and (c) the Option Price (as defined below).

(d) Closing . The date and time of the Closing (the “ Closing Date ”) shall be 10:00 a.m., Eastern Standard Time, within five (5) days after the later of the (i) receipt of payment for the Shares by the Sellers, (ii) delivery of the Closing Deliveries set forth in Section 1(g) hereof and (iii) the satisfaction (or waiver) of the conditions to the Closing set forth in Sections 9 and 10 below, or any such other time and date as is mutually agreed to by the Parties, at the offices of the Company. In the event the Closing Date has not occurred on or before December 31, 2019, this Agreement will terminate automatically and be of no further effect unless otherwise extended by agreement of the Parties.

(e) Purchase Price . The purchase price for the Shares to be purchased by the Buyer at the Closing shall be approximately equal to US$1.16 per Share, with the aggregate purchase price equal to US$9 million (the “ Purchase Price ”), which shall be paid to Wise and Sun Zhang’s designated bank accounts. In the event the Buyer elects to pay in Renminbi, the applicable exchange rate will be equal to the Bank of China’s announced foreign exchange rate midpoint on the date such payment is made to the Escrow Agent; provided, however that if the Buyer pays any portion of the Purchase Price by way of promissory note, the applicable exchange rate shall be as of the date such promissory note is paid in cash.

(f) Form of Payment . On or prior to the Closing Date:

(i) the Buyer shall cause the Escrow Agent to make payment in full to the Sellers for the Purchase Price of the Shares to be transferred to the Buyer at Closing, by wire transfers or other payment of immediately available funds in accordance with each Seller’s written instructions, which written instructions shall be delivered by the Sellers to the Buyer no later than three (3) days prior to the anticipated Closing Date and, if applicable, by delivery of promissory notes as described herein; and

(ii) the Sellers shall cause the Escrow Agent to make payment in full to the Company for the Option Price, by wire transfers or other payment of immediately available funds (including, at Sellers’ request, by way of offset of payments otherwise payable to Sellers) in accordance with the Company’s written instructions, which written instructions shall be delivered by the Company to the Sellers no later than three (3) days prior to the anticipated Closing Date.

(g) Closing Deliverables . On the Closing Date, the Parties shall deliver, or cause to be delivered the following closing deliverables:

(i) Wise will deliver to the Company, with a copy to the Buyer, a fully executed stock power instructing the transfer agent of the Company to transfer on the books of the Company an aggregate of 1,800,000 Class B Common Shares to the Buyer, together with any further documentation required by the transfer agent to effect such transfer (the “ Wise Documents ”);

(ii) Sun Zhang will deliver to the Company, with a copy to the Buyer, a fully executed stock power instructing the transfer agent of the Company to transfer on the books of the Company an aggregate of 5,978,400 Class B Common Shares to the Buyer, together with any further documentation required by the transfer agent to effect such transfer (the “ Sun Zhang Documents ”);

(iii) The Company will deliver the Wise Documents and the Sun Zhang Documents to the Company’s transfer agent, together with any instructions and other materials that may be required to effect the transfer of the Shares to the Buyer;

(iv) The Company will cause the transfer agent to deliver one or more share certificates in customary form in respect of an aggregate of 7,778,400 duly authorized and validly issued Shares to be transferred and allotted to the Buyer at the Closing; and

(v) The Company will deliver to the Buyer a copy of the register of members of the Company, as certified by the registered agent of the Company and updated to reflect the transfer of the Shares from the Sellers to the Buyer as provided herein.

(vi) A majority of both classes of Common Shares of the Company shall approved the Company’s entry into and performance under this Agreement and the Company shall have filed a report on Form 6-K announcing such approval.

2. ACQUISITION OF FINTECH . On the Closing Date, the Buyer and Company agree that the Company shall enter into contractual control agreements with Fintech in substantially the form set forth as Exhibit 1 hereto. It is the intention of the Parties that the Company and Buyer shall cooperate to obtain a valuation of Fintech from a reputable and experienced business valuation firm, the expense of which shall be borne by Buyer, such that such valuation firm shall establish the Fair Market Value (as defined below) of Fintech and that the Company shall pay the Fair Market Value in cash or cash equivalent to the Buyer for 100% of the contractual control of Fintech.

3. GRANT OF PURCHASE OPTION . On the Closing Date, the Company shall grant the Sellers’ designee an option in substantially the form set forth as Exhibit 2 hereto (the “ Purchase Option ”) to purchase all of the equity of Zhejiang Xibolun Automation Project Technology Co., Ltd., the Company’s 49% equity interest in Xuzhou Weijia Biotechnology Co., Ltd. and all of the equity of Wenzhou Xibolun Fluid Equipment Co., Limited, Chinese operating subsidiaries of the Company (such entities, “ Xibolun ”). It is the intention of the Parties that the Company and Sellers shall cooperate to obtain a valuation of Xibolun from a reputable and experienced business valuation firm, the expense of which shall be jointly borne by the parties, such that such valuation firm shall establish the Fair Market Value (as defined below) of Xibolun and that the Company shall pay the Fair Market Value in cash or cash equivalent to the Company for 100% of the equity interests of Xibolun. To secure the Purchase Option, the Sellers’ designee shall pay an Option Price of $50,000 on the Closing Date. The Option Price will be irrevocable when made and forfeited to the extent the Purchase Option is not exercised prior to expiration; however, the Option Price will be credited against the Fair Market Value of Xibolun in the event the Purchase Option is exercised.

4. FAIR MARKET VALUE . “Fair Market Value” shall mean the fair market value of Fintech or Xibolun (as applicable), determined as follows. Within three (3) days after giving written notice to the other party of its intention to have the matter submitted to appraisal, the Parties shall appoint a qualified and experienced business appraisal firm, to appraise and determine the fair market value. The appraiser shall independently, and without consultation, prepare a written appraisal of the fair market value within thirty (30) days. The Parties have agreed that a mutually agreed reputable third party appraisal company with sufficient U.S. capital and Chinese market expertise and qualification shall be engaged to conduct the appraisal of Fintech and Xibolun. A determination of fair market value made by such appraisers shall be binding and conclusive as to the subject matter thereof. The Buyer is responsible for expenses of the appraisals of Fintech and both Parties shall share the expenses of the appraisals of Xibolun.

5. BUYER’S REPRESENTATIONS AND WARRANTIES . The Buyer represents and warrants to the Company and Sellers, as of the date hereof and as of the Closing, that:

(a) No Sale or Distribution . The Buyer is acquiring the Shares for its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the 1933 Act. Such Buyer does not presently have any agreement or understanding, directly or indirectly, with any person to distribute any of the Shares.

(b) Accredited Investor Status . The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D.

(c) Reliance on Exemptions . The Buyer understands that the Shares are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company and Sellers are relying in part upon the truth and accuracy of, and such Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer to acquire the Shares.

(d) Information . The Buyer has been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Shares that have been reasonably requested by the Buyer. The Buyer has been afforded the opportunity to ask questions of the Company and Sellers. Neither such inquiries nor any other due diligence investigations conducted by the Buyer or its representatives shall modify, amend or affect such Buyer’s right to rely on the Company’s and Sellers’ representations and warranties contained herein. The Buyer understands that its investment in the Shares involves a high degree of risk and is able to afford a complete loss of such investment. The Buyer has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Shares.

(e) No Governmental Review . The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Shares or the fairness or suitability of the investment in the Shares nor have such authorities passed upon or endorsed the merits of the offering of the Shares.

(f) Transfer or Resale . The Buyer understands that (i) the Shares have not been and are not being registered under the 1933 Act, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder or (B) the Buyer shall have delivered to the Company an opinion of counsel, in a form reasonably acceptable to the Company, to the effect that such Shares to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration; and (ii) neither the Company nor any other person is under any obligation to register the Shares under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.

(g) Legends . The Buyer understands that the stock certificates for the Shares, unless and until registered, shall bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):

“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ‘SECURITIES ACT’), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS.”

The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of the Shares upon which it is stamped, if, unless otherwise required by state securities laws, (i) such Shares are registered for resale under the 1933 Act or (ii) in connection with a sale, assignment or other transfer, such holder provides the Company with a legal opinion reasonably acceptable to the Company, to the effect that such sale, assignment or transfer of the Shares may be made without registration under the applicable requirements of the 1933 Act.

(h) Validity; Enforcement . This Agreement has been duly and validly authorized, executed and delivered on behalf of the Buyer and shall constitute the legal, valid and binding obligations of the Buyer enforceable against the Buyer in accordance with its terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

(i) No Conflicts . The execution, delivery and performance by the Buyer of this Agreement and the consummation by the Buyer of the transactions contemplated hereby will not (i) result in a violation of the organizational documents of the Buyer, (ii) conflict with, or constitute a default (or an event which 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, any agreement, indenture or instrument to which the Buyer is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to the Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have material impact upon the ability of the Buyer to perform its obligations hereunder.

(j) Residency . The Buyer is an entity formed under the laws of and operating in Cayman Islands. The offer and sale of the Shares has been made in an offshore transaction and did not involve any directed selling efforts in the United States. The term “offshore transaction” shall have the meaning assigned to it by Regulation S.

(k) Certain Trading Activities . Other than with respect to the transactions contemplated herein, since the time that the Buyer was first contacted by the Company, Sellers or any other person regarding the purchase of the Shares set forth herein, neither the Buyer nor any Affiliate (as defined in Rule 12b-2 of the SEC Rules promulgated under the 1934 Act) of the Buyer which (x) had knowledge of the transactions contemplated hereby, (y) has or shares discretion relating to the Buyer’s investments or trading or information concerning the Buyer’s investments and (z) is subject to the Buyer’s review or input concerning such Affiliate’s investments or trading (collectively, “ Trading Affiliates ”) has directly or indirectly, nor has any person acting on behalf of or pursuant to any understanding with such Buyer or Trading Affiliate, (i) effected or agreed to effect any purchase or sale of the Shares, (ii) taken, directly or indirectly, any action designed to cause or to result, or that could reasonably be expected to cause or result, in the stabilization or manipulation of the price of any security of the Company, or (iii) paid or agreed to pay to any person any compensation for soliciting another to purchase or sell any securities of the Company.

(l) No Consideration . The Buyer has not paid any consideration, directly or indirectly, to any officer, director or employee of the Company or any subsidiary, other than in connection with the Purchase Price to be paid to the Sellers.

6. REPRESENTATIONS AND WARRANTIES OF THE SELLERS . Each of the Sellers represents and warrants to the Buyer and Company, as of the date hereof and as of the Closing, that:

(a) No General Solicitation . Neither the Sellers nor any person acting on the Sellers’ behalf offered or sold the securities using general solicitation or general advertising (as described in Rule 502(c) of Regulation D).

(b) Authorization; Enforcement; Validity .

(i) Wise has the requisite power and authority to enter into and perform its obligations under this Agreement and to transfer its Shares to the Buyer in accordance with the terms hereof. The execution and delivery of the Agreement by Wise and the consummation by Wise of the transactions contemplated hereby have been duly authorized by Wise’s management. This Agreement has been duly executed and delivered by Wise, and constitutes the legal, valid and binding obligations of Wise, enforceable against Wise in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

(ii) Sun Zhang has full legal capacity, power and authority to execute and deliver this Agreement and to perform his obligations hereunder. This Agreement is a valid and binding obligation of Sun Zhang, enforceable in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

(c) Not an Issuer . The Sellers are not issuers nor direct or indirect subsidiaries of the Company.

(d) Bad Actors Disqualified . Neither the Sellers nor any person that will directly or indirectly receive remuneration or a commission for their participation in the sale of the Shares to Buyer is subject to:

(i) an event that would disqualify an issuer or other covered person under Rule 506(d)(1) under Regulation D; or

(ii) a statutory disqualification under Section 3(a)(39) of the Exchange Act.

7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . The Company represents and warrants to the Buyer and Sellers, as of the date hereof and as of the Closing, that:

(a) Operating Company Requirement : The Company is:

(i) engaged in business;

(ii) not in the organizational stage or in bankruptcy or receivership; and

(iii) not a blank check, blind pool or shell company that has no specific business plan or purpose or has indicated that the issuer’s primary business plan is to engage in a merger or combination of the business with, or an acquisition of, an unidentified person.

(b) Not an Underwriter . The Shares are not part of an unsold allotment to, or a subscription or participation by, a broker or dealer acting as an underwriter or a redistribution.

(c) Securities Outstanding for Minimum Period . The class of Common Shares transferred hereunder have been authorized and outstanding for at least 90 days prior to the date of this agreement.

(d) Organization and Qualification . The Company and its “ Subsidiaries ” (which for purposes of this Agreement includes any joint venture or any entity in which the Company, directly or indirectly, owns any of the capital stock or holds an equity, contractual or other interest) are entities duly organized and validly existing and, to the extent legally applicable, in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authorization to own their properties and to carry on their business as now being conducted. Each of the Company and its Subsidiaries is duly qualified as a foreign entity to do business and, to the extent legally applicable, is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect; provided, however, that the Company has disclosed by filing a current report on Form 6-K its receipt of a deficiency notice from the Principal Market. As used in this Agreement, “ Material Adverse Effect ” means any material adverse effect on the business, properties, assets, operations, results of operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries, individually or taken as a whole, or on the transactions contemplated hereby or by the agreements and instruments to be entered into in connection herewith, or on the authority or ability of such party or Subsidiaries to perform its obligations under this Agreement.

(e) Authorization; Enforcement; Validity . The Company has the requisite power and authority to enter into and perform its obligations under this Agreement and to issue and allot the Shares to the Buyer in accordance with the terms hereof. The execution and delivery of the Agreement by the Company and the consummation by the Company of the transactions contemplated hereby, including, without limitation, the reservation for issuance and the issuance of the Shares, have been duly authorized by the Company’s Board of Directors, subject to approval by the shareholders of the Company at a special meeting called for such purpose. Subject to the foregoing clause, this Agreement has been duly executed and delivered by the Company, and constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

(f) No Conflicts . The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby will not, (i) unless such conflict or default could not reasonably be expected to result in a Material Adverse Effect, conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) in any respect under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party, or (ii) result in a violation of any law, rule, regulation, order, judgment or decree (including foreign, federal and state securities laws and regulations and the rules and regulations of the Principal Market and applicable laws of China) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected.

(g) Acknowledgment Regarding Buyer’s Purchase of Shares . The Company acknowledges and agrees that the Buyer is acting solely in the capacity of an arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby and that, immediately prior to issuance, and that the Buyer is not, and none of the Buyer’s affiliates, directors, officers, employees or representatives is (i) an officer or director of the Company, (ii) an “affiliate” of the Company or any of its Subsidiaries (as defined in Rule 144) or (iii) to the knowledge of the Company, a “beneficial owner” of more than 10% of the ordinary shares of the Company (as defined in Rule 13d-3 of the SEC Rules promulgated under the Securities Exchange Act of 1934, as amended (the “ 1934 Act ”)).

(h) No General Solicitation . Neither the Company nor any person acting on the Company’s behalf offered or sold the securities using general solicitation or general advertising (as described in Rule 502(c) of Regulation D).

(i) No Integrated Offering . None of the Company, its Subsidiaries, any of their affiliates, and any person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of any of the Shares under the 1933 Act or cause this offering of the Shares to be integrated with prior offerings by the Company for purposes of the 1933 Act or any applicable shareholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or designated. None of the Company, its Subsidiaries, their affiliates or any person acting on their behalf will take any action or steps referred to in the preceding sentence that would require registration of any of the Shares under the 1933 Act or cause the offering of the Shares to be integrated with other offerings.

(j) Equity Capitalization . As of the date hereof, the authorized capital stock of the Company consists of 50,000,000 Common Shares, of which 16,269,577 Common Shares are issued and outstanding and ___ shares are reserved for issuance pursuant to securities exercisable or exchangeable for, or convertible into, Shares. All of such outstanding shares have been, or upon issuance will be, duly authorized, validly issued and are fully paid and nonassessable, and issued in compliance with federal and state securities laws and free and clear of all liens, claims and encumbrances. The Company has made available to the Buyer true, correct and complete copies of the Company’s Organizational Documents and the equivalent organizational documents of each of the Company’s Subsidiaries, each as amended and as in effect on the date hereof, and the terms of all securities convertible into, or exercisable or exchangeable for, Shares and the material rights of the holders thereof in respect thereto. None of the Company or any of its Subsidiaries is in violation or breach of any of its organizational documents. The Shares when transferred and allotted to the Buyer in accordance with the terms of this Agreement will be duly and validly issued, and issued in compliance with federal and state securities laws and free of all liens, claims and encumbrances.

(k) No Consideration . The Company is not aware of any consideration being paid by any Buyer, directly or indirectly, to any officer, director or employee of the Company or any subsidiary other than the Purchase Price to be paid to the Sellers hereunder.

(l) Subsidiaries . The Company does not own, or have any interest in any shares or have an ownership interest in any entity other than as disclosed in its Public Filings. The share capital of each subsidiary of the Company are duly authorized, validly issued, fully paid and nonassessable, and is issued in compliance with any applicable securities laws and free and clear of all liens, claims and encumbrances.

(m) Financial Statements . The Company has timely filed or furnished, as applicable, all reports, schedules, forms, statements and other documents required to be filed or furnished by it with the SEC pursuant to the 1933 Act or the 1934 Act (all of the foregoing documents, together with all exhibits included therein and financial statements, notes, and schedules thereto and documents incorporated by reference therein, the “ Public Filings ”). Except to the extent subsequently amended, the Public Filings, as of the date they were filed or furnished, complied in all material respects with the requirements of the 1933 Act or the 1934 Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder, as applicable, and none of the Public Filings at such time contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the Public Filings (the “ Financial Statements ”) have been prepared in accordance with U.S. GAAP applied on a consistent basis throughout the period involved. The Financial Statements are based on the books and records of the Company, and fairly present in all material respects the financial condition of the Company as of the respective dates they were prepared and the results of the operations of the Company for the periods indicated. The Company maintains a standard system of accounting established and administered in accordance with U.S. GAAP.

(n) Undisclosed Liabilities . The Company has no liabilities, obligations or commitments of any nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise (“ Liabilities ”), except (a) those which have been reflected or reserved against in the financial statements filed in the Company’s annual report on Form 20-F filed with the SEC on April 26, 2018, (b) those which have been reflected or reserved against in the financial statements filed in the Company’s current report on Form 6-K filed with the SEC on December 10, 2018 or (c) those which have been incurred in the ordinary course of business consistent with past practice since the date of the aforementioned financial statements.

(o) No Bankruptcy or Insolvency . Company has not: (a) filed any voluntary or had involuntarily filed against it in any court or with any governmental body, a petition in bankruptcy or insolvency or seeking to effect any plan or other arrangement with creditors, or seeking the appointment of a receiver; (b) had a receiver, conservator or liquidating agent or similar person appointed for all or a substantial portion of its assets, suffered the attachment or other judicial seizure of all, or substantially all of its assets; (c) given notice to any person or governmental body of insolvency; or (d) made an assignment for the benefit of its creditors or taken any other similar action for the protection or benefit of its creditors. Company is solvent and will not be rendered insolvent by the performance of its obligations under this Agreement.

(p) Taxes . Each of the Company and its Subsidiaries has timely filed all returns (as hereinafter defined) required to be filed with taxing authorities prior to the date hereof or has duly obtained extensions of time for the filing thereof, and all such returns are true, complete and accurate. Each of the Company and its Subsidiaries has paid all taxes (as hereinafter defined) shown as due on such returns that were filed and has paid all taxes imposed on or assessed against the Company or any of its Subsidiaries. The provisions for taxes payable, if any, shown on the financial statements filed with or in the Public Filings are sufficient for all accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated financial statements.

(q) Absence of Certain Changes, Events and Conditions . Since the date of the financial statements filed in the Company’s annual report filed on Form 20-F with the SEC on April 26, 2018, and other than in the ordinary course of business consistent with past practice, there has not been, with respect to the Company, any:

(i) event, occurrence or development that has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect (as defined in Section 11(i));

(ii) amendment of the articles or memorandum of association of the Company;

(iii) split, combination or reclassification of any shares of its capital stock;

(iv) issuance, sale or other disposition of any of its capital stock, or grant of any options, warrants or other rights to purchase or obtain (including upon conversion, exchange or exercise) any of its capital stock other than as disclosed to the Buyer;

(v) declaration or payment of any dividends or distributions on or in respect of any of its capital stock or redemption, purchase or acquisition of its capital stock;

(vi) material change in any method of accounting or accounting practice of the Company, except as required by U.S. GAAP or as disclosed in the notes to the Financial Statements;

(vii) incurrence, assumption or guarantee of any indebtedness for borrowed money except unsecured current obligations and liabilities incurred in the ordinary course of business consistent with past practice;

(viii) capital investment in, or any loan to, any other person;

(ix) imposition of any encumbrance upon any of the Company properties, capital stock or assets, tangible or intangible;

(x) loan to (or forgiveness of any loan to), or entry into any other transaction with, any of its stockholders or current or former directors, officers and employees;

(xi) entry into an IP Contract; or

(xii) contract to do any of the foregoing, or any action or omission that would result in any of the foregoing.

(r) Material Contracts . The Company’s Public Filings fully disclose the Company’s entry into or termination of any material definitive agreements to which the Company is a party (each, a “ Material Contract ”). The term “ Material Contract ” shall mean an agreement that provides for obligations that are material to and enforceable against the Company, or rights that are material to the Company and enforceable by the Company against one or more other parties to the agreement, in each case whether or not subject to conditions. Each Material Contract is valid and binding on the Company and the counterparties to such Material Contract, in each case in accordance with its terms, and is in full force and effect. None of the Company or, to the Company’s knowledge, any other party thereto is in breach of or default under (or is alleged to be in breach of or default under) in any material respect, or has provided or received any notice of any intention to terminate, any Material Contract. No event or circumstance has occurred that, with notice or lapse of time or both, would constitute an event of default under any Material Contract or result in a termination thereof or would cause or permit the acceleration or other changes of any right or obligation or the loss of any benefit thereunder.

(s) Property . The Company and each subsidiary owns or leases all such properties as are necessary to the conduct of its business as presently operated and as proposed to be operated. The Company and the Subsidiaries have good and marketable title to all real property and good and marketable title to all personal property owned by them, in each case free and clear of all liens, claims and encumbrances, except such as disclosed in the Company’s Public Filings or such as do not (individually or in the aggregate) materially affect the value of such property and do not interfere with the use made or proposed to be made of such property by the Company or any of the Subsidiaries. Any real property and buildings held under lease or sublease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material to, and do not interfere with, the use made and proposed to be made of such property and buildings by the Company and the Subsidiaries. Neither the Company nor any subsidiary has received any written notice of any claim adverse to its ownership of any real or personal property or of any claim against the continued possession of any real property, whether owned or held under lease or sublease by the Company or any subsidiary.

(t) Intellectual Property .

(i) The Company and each of its Subsidiaries own or have the valid right to use, free and clear of all encumbrances, all of the following to the extent owned, used, held for use in, or necessary for the conduct of the business of the Company and its Subsidiaries as currently conducted and as contemplated to be conducted: (1) inventions, whether or not patentable, reduced to practice or made the subject of one or more pending patent applications, (2) national and multinational statutory invention registrations, patents and patent applications (including all reissues, divisions, continuations, continuations-in-part, extensions and reexaminations thereof) registered or applied for in China, the United States of America and all other nations throughout the world, including all improvements to the inventions disclosed in each such registration, patent or patent application ((1) and (2) together, “ Patents ”), (3) trademarks, service marks, trade dress, logos, domain names, trade names and corporate names and other similar designations of source or origin, (whether or not registered) in China, the United States and all other nations throughout the world, including all variations, derivations, combinations, registrations and applications for registration of the foregoing and all goodwill associated therewith, (4) copyrights (whether or not registered) and registrations and applications for registration thereof in China, the United States and all other nations throughout the world, including all derivative works, moral rights, renewals, extensions, reversions or restorations associated with such copyrights, now or hereafter provided by law, regardless of the medium of fixation or means of expression, (5) computer software (including source code, object code, firmware, operating systems and specifications), (6) trade secrets and, whether or not confidential, business information (including pricing and cost information, business and marketing plans and customer and supplier lists) and know-how (including manufacturing and production processes and techniques and research and development information), (7) industrial designs (whether or not registered), (8) databases and data collections, (9) copies and tangible embodiments of any of the foregoing, in whatever form or medium, (10) all rights to obtain and rights to apply for patents, and to register trademarks and copyrights, (11) all rights in all of the foregoing provided by treaties, conventions and common law and (12) all rights to sue or recover and retain damages and costs and attorneys’ fees for past, present and future infringement or misappropriation of any of the foregoing (collectively, “ Intellectual Property ”). Either the Company or one of its Subsidiaries is the sole and exclusive beneficial and, with respect to applications and registrations, record owner of any Intellectual Property purported to be owned by the Company or one of its Subsidiaries and material to the conduct of the business of the Company and its Subsidiaries, all such Intellectual Property is subsisting, valid, and enforceable, and all such Intellectual Property is sufficient for the conduct of the business as currently conducted and as contemplated to be conducted.

(ii) Other than as disclosed in the Company’s Public Filings, neither the Company nor any of its Subsidiaries is party to any contract pursuant to which the Company or any of its Subsidiaries (1) is granted or obtains or agrees to obtain any right to use any Intellectual Property that is material to the business of the Company and its Subsidiaries (other than standard form contracts granting rights to use readily available shrink wrap or click wrap software, (2) is restricted in its right to use or register any Intellectual Property that is material to the business of the Company and its Subsidiaries, or (3) permits or agree to permit any other person to use, enforce, or register any Intellectual Property that is material to the business of the Company and its Subsidiaries including any license agreements, coexistence agreements, and covenants not to sue (each of the foregoing, an “ IP Contract ”). There are no orders, writs, injunctions, or decrees to which the Company or any of its Subsidiaries is subject with respect to any Intellectual Property that is material to the business of the Company and its Subsidiaries.

(iii) Other than as disclosed in the Company’s Public Filings, to the knowledge of the Company the conduct of the business of the Company and its Subsidiaries (including the products and services of the Company and its Subsidiaries) as currently conducted, and the conduct of such business as conducted in the past three (3) years (or longer time period to the extent there is any current liability therefore), does not infringe, misappropriate, or otherwise violate, and has not infringed, misappropriated, or otherwise violated, any person’s Intellectual Property rights. There has been no such claim asserted or threatened (including in the form of demands or offers or invitations to obtain a license) in the past three (3) years (or longer time period to the extent there is any current liability therefore) against the Company or any of its Subsidiaries, or, to the knowledge of the Company, any other person. To the knowledge of the Company, there are no facts, circumstances, or conditions that could reasonably be expected to form the basis for a claim of infringement, misappropriation, or other violation of Intellectual Property rights against the Company or any of its Subsidiaries.

(iv) Other than as disclosed in the Company’s Public Filings and to the knowledge of the Company, no person is materially infringing, misappropriating, or otherwise violating any Intellectual Property owned, used, or held for use by the Company or any of its Subsidiaries in the conduct of the business of the Company and its Subsidiaries, and no such claims have been asserted or threatened against any person by the Company.

(v) Other than as disclosed in the Company’s Public Filings, there has been no claim asserted or threatened challenging the scope, validity, or enforceability of any applications or registrations for material Patents owned by the Company or any of its Subsidiaries, and, to the knowledge of the Company, there are no facts, circumstances, or conditions that could reasonably be expected to form the basis for such a claim. The Company has not granted any person any right to control the prosecution or registration of any Intellectual Property owned by the Company or any of its Subsidiaries or to commence, defend, or otherwise control any claim with respect to such Intellectual Property.

(vi) To the knowledge of the Company as of the date hereof, the Company is in compliance with applicable law, as well as its own policies, relating to privacy, data protection, and the collection and use of personal information collected, used, or held for use by the Company, and as of the date hereof no claims are pending or threatened in writing against the Company alleging a violation of any person’s privacy or personal information.

(u) Legal Proceedings; Governmental Orders . There are no actions pending or, to the Company’s knowledge, threatened (a) against or by the Company or any of its Subsidiaries affecting any of their respective properties or assets; or (b) against or by the Company or any of its Subsidiaries that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such action. There are no outstanding governmental orders and no unsatisfied judgments, penalties or awards against or affecting the Company or any of its properties or assets.

(v) Compliance With Laws; Permits . The Company and each of its Subsidiaries has complied, and is now complying, with all laws applicable to it or its business, properties or assets. All permits required for the Company or its Subsidiaries to conduct their businesses have been obtained by it and are valid and in full force and effect. All fees and charges with respect to such permits as of the date hereof have been paid in full. No event has occurred that, with or without notice or lapse of time or both, would reasonably be expected to result in the revocation, suspension, lapse or limitation of any permit described herein.

(w) Labor; Employee Benefit Matters . The Company has disclosed in its Public Filings all pension, benefit, retirement, compensation, employment, consulting, profit-sharing, deferred compensation, incentive, bonus, performance award, phantom equity, stock or stock-based, change in control, retention, severance, vacation, paid time off, welfare, fringe-benefit and other similar agreement, plan, policy, program or arrangement (and any amendments thereto), in each case whether or not reduced to writing and whether funded or unfunded, which is or has been maintained, sponsored, contributed to, or required to be contributed to by the Company for the benefit of any current or former employee, officer, director, retiree, independent contractor or consultant of the Company or any spouse or dependent of such individual, or under which the Company has or may have any liability, contingent or otherwise (each, a “ Benefit Plan ”). None of the Company or any of its Subsidiaries is a party to any collective bargaining, trade union or works council agreement or other labor union contract applicable to persons employed by them, and there are no organizational campaigns, petitions or other unionization activities seeking recognition of a collective bargaining unit relating to any employee. During the one (1) year period immediately prior to the date of this Agreement, there has been no organized strike, slowdown, work stoppage or lockout, or similar activity, material labor disputes, material labor arbitrations, or material labor grievances or threat thereof, by or with respect to any employee of the Company or any of its Subsidiaries. None of the Company or any of its Subsidiaries is in material violation of any law pertaining to employment and employment practices, including all laws respecting terms and conditions of employment, wages, hours, overtime payment, employment discrimination, worker classification (including the proper classification of workers as independent contractors, consultants, dispatch labor, outsourced workers, and classification under alternative working hours systems), immigration, work authorization, occupational health and safety, workers’ compensation, the payment of social security and other employment taxes, disability rights or benefits, plant closures and layoffs, labor relations, employee leave issues and unemployment insurance. To the Company’s knowledge, no employee or contractor of any of the Company or its Subsidiaries is in any material respect in violation of any term of any employment agreement, consulting agreement, restrictive covenant, common law nondisclosure obligation, fiduciary duty, or other obligation to any such entity. To the Company’s knowledge, no current employee or contractor of any of the Company or its Subsidiaries intends to terminate his or her employment or engagement. No current employee or contractor of any of the Company or its Subsidiaries is entitled to any payment (including without limitation any severance payment, change of control payment or other bonus payment) tied to the announcement or consummation of the transactions contemplated by this Agreement.

(x) Brokers . No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company.

(y) Related Party Transactions . Except as disclosed in the Company’s Public Filings, there are no business relationships or related party transactions involving the Company or any other person required to be described in the Public Filings that have not been described as required.

(z) Securities Sold Pursuant to this Agreement . The Shares, when issued and paid for by the Buyer, will be validly issued, fully paid and non-assessable; the holders thereof are not and will not be subject to personal liability by reason of being such holders; the Shares are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company; and all corporate action required to be taken for the authorization, issuance and sale of the Securities has been duly and validly taken.

(aa) Conduct of Business . Except as described in Public Filings, the Company has all requisite corporate power and authority, and has all necessary authorizations, approvals, orders, licenses, certificates and permits of and from all governmental regulatory officials and bodies that it needs as of the date hereof to conduct its business purpose as described in Public Filings, except where any failures to possess the same, singularly or in the aggregate, would have a Material Adverse Effect. The disclosures in Public Filings concerning the effects of federal, state, local and foreign regulation on the Company’s business purpose as currently contemplated are correct in all material respects.

(bb) Disclosure . The Company represents that it has disclosed to the Buyer all information, concerning all aspects of the Company’s functioning, that is or may be reasonably deemed necessary for proper evaluation of the Company’s operations, its assets and liabilities, its net equity and its financial standing and sales.

(cc) The Company is aware that the Buyer has entered into this Agreement based on the assumption that the above representations and warranties are materially complete, fair, accurate and true.

8. COVENANTS .

(a) Best Efforts . Each party shall use its best efforts to timely satisfy each of the conditions to be satisfied by it as provided in Sections 9 and 10 of this Agreement.

(b) Conduct of Business Prior to the Closing . From the date hereof until the Closing, except as otherwise provided in this Agreement or consented to in writing by Buyer (which consent shall not be unreasonably withheld or delayed), Company shall (x) conduct its business in the ordinary course of business consistent with past practice; and (y) use reasonable best efforts to maintain and preserve intact its current organization, business and franchise and to preserve the rights, franchises, goodwill and relationships of its employees, customers, lenders, suppliers, regulators and others having business relationships with the Company and shall not, in addition to any other action that does not fall within the Company’s ordinary course of business consistent with past practice, undertake any of the actions enumerated under Section 11(p). Without limiting the foregoing, the Company shall not (i) except as necessary within the Company’s ordinary course of business consistent with past practice, grant or acquire, agree to grant to or acquire from any person, or dispose of or permit to lapse any rights to any material Intellectual Property, or disclose or agree to disclose to any person, any material trade secret, (ii) compromise, settle or agree to settle, or consent to judgment in, any one or more actions or institute any action concerning any material Intellectual Property, or (iii) cause any current employee or contractor of any of the Company or its Subsidiaries to be entitled to any payment (including without limitation any severance payment, change of control payment or other bonus payment) tied to the announcement or consummation of the transactions contemplated by this Agreement.

(c) Access to Information . From the date hereof until the Closing, the Company shall (a) afford Buyer and its representatives full and free access to and the right to inspect all of the corporate books and records and other documents and data related to the Company; (b) furnish Buyer and its representatives with such financial, operating and other data and information related to the Company as Buyer or any of its representatives may reasonably request; and (c) cooperate with Buyer and its representatives in their investigation of the Company. Any investigation pursuant to this Section 8(c) shall be conducted in such manner as not to interfere unreasonably with the conduct of the business of the Company.

(d) No Solicitation of Other Bids . The Sellers and Company shall not directly or indirectly, (i) encourage, solicit, initiate, facilitate or continue inquiries regarding an investment in the Company or a sale of the Shares; (ii) enter into discussions or negotiations with, or provide any information to, any person concerning a possible investment in the Company or sale of the Shares; or (iii) enter into any agreements or other instruments (whether or not binding) regarding an investment in the Company or a sale of the Shares. The Sellers and Company shall immediately cease and terminate all existing discussions or negotiations with any persons conducted heretofore with respect to, or that could lead to, an investment in the Company or attempted sale of the Shares.

(e) Notice of Certain Events . From the date hereof until the Closing, each Party shall promptly notify each other Party in writing of:

(i) any fact, circumstance, event or action the existence, occurrence or taking of which (A) has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or materially delay the consummation of the transactions contemplated by this Agreement, or (B) has resulted in, or could reasonably be expected to result in, any representation or warranty made by such party hereunder not being true and correct;

(ii) any notice or other communication from any governmental authority in connection with the transactions contemplated by this Agreement; and

(iii) any actions commenced or, to such party’s knowledge, threatened against, relating to or involving or otherwise affecting the Company, Sellers or Buyer that, if pending, would have been required to have been disclosed under applicable laws or that relates to the consummation of the transactions contemplated by this Agreement.

(f) Public Announcements . Unless otherwise required by applicable law or NASDAQ stock exchange requirements (based upon the reasonable advice of counsel), no party to this Agreement shall make any public announcements in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media without the prior written consent of the other party (which consent shall not be unreasonably withheld or delayed), and the parties shall use commercially reasonable efforts to cooperate as to the timing and contents of any such announcement.

(g) Continuity of Company’s Business and Management . The parties intend that, following completion of the sale of Shares by the Sellers to the Buyer, the Company will continue to operate as currently operated. To this end, the parties agree that the employment of the Company’s Chief Executive Officer, Mr. Anyuan Sun, shall be extended for a period of at least one (1) year from the Closing Date, subject to the terms of a customary employment agreement (the “ CEO Employment Agreement ”), which the parties will cooperate to negotiate in good faith and execute with Mr. Anyuan Sun. The CEO Employment Agreement will provide, among other things, that it is terminable by the Company only for cause during the term of agreement. The parties further agree that the primary business of the Company will continue for a period of at least one (1) year following Closing unless the conduct of such business shall become illegal or shall be determined by the Board of Directors to be not in the best interest of the shareholders.

(h) Dilutive Issuances . From the date of the Agreement through the Closing Date, the Company shall not, and shall cause its Subsidiaries not to, directly or indirectly, issue, offer, sell, grant any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act), any convertible securities, any debt, preferred shares or any purchase rights), or accelerate the vesting thereof (except to the extent required under the terms of the award agreement applicable thereto). If the Company or any of its Subsidiaries shall have issued, offered, sold, or granted any of the foregoing, the number of Shares to be received by the Buyer at the Closing shall be equitably adjusted such that as of the Closing the Buyer shall own the same percentage of all outstanding equity interests in the Company and its Subsidiaries as if such dilutive issuance has never occurred.

9. CONDITIONS TO THE SELLERS’ OBLIGATION TO SELL . The obligation of the Sellers hereunder to sell and transfer the Shares to the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Sellers’ sole benefit and may be waived by the Sellers at any time in their sole discretion by providing the Buyer with prior written notice thereof:

(i) The representations and warranties of the Buyer shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specified date) and the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.

(ii) Such Buyer shall have delivered to the Sellers (a) the Agreement, executed by such individuals as are authorized to act on behalf of the Buyer; and (b) such closing certificates as may be reasonably required by the Sellers in connection with the Closing.

(iii) Such Buyer shall have delivered to the Sellers the Purchase Price for the Shares being purchased by such Buyer at the Closing by wire transfer of immediately available funds pursuant to the wire instructions provided by the Sellers.

(iv) The representations and warranties of the Company shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specified date), and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date.

10. CONDITIONS TO THE BUYER’S OBLIGATION TO PURCHASE . The obligation of the Buyer hereunder to purchase the Shares at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Buyer’s sole benefit and may be waived by such Buyer at any time in its sole discretion by providing the Sellers with prior written notice thereof:

(i) The representations and warranties of the Company and Sellers shall be true and correct in all material respects (except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specified date) and the Company and Sellers shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Sellers or Company at or prior to the Closing Date.

(ii) The Shares (i) shall be designated for quotation or listed on the Principal Market and (ii) shall not have been suspended, as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market. Notwithstanding the foregoing, the Parties acknowledge and agree that the Company has received a deficiency notice from the Nasdaq Capital Market, which receipt has been announced by press release and current report on Form 6-K filed on March 4, 2019.

(iii) The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale of the Shares by the Sellers.

(iv) The Company and Sellers shall have delivered the following to the Buyer: (a) closing deliverables set forth in Section 1; (b) the Agreement, executed by such individuals as are authorized to act on behalf of the Company and Sellers; and (c) such certificates and other instruments as may be reasonably required by the Buyer in connection with the Closing.

(v) No event has occurred with regard to the Sellers, Company or the Company’s Subsidiaries that would have or be reasonably expected to have a Material Adverse Effect on the business of the Company or such Subsidiaries.

11. MISCELLANEOUS .

(a) Governing Law; Jurisdiction; Jury Trial . All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the laws of the British Virgin Islands, without giving effect to any choice of law or conflict of law provision or rule that would cause the application of the laws of any jurisdictions other than the British Virgin Islands. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the city of Wenzhou, China for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.

(b) Counterparts . This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature.

(c) Headings . The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

(d) Severability . If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

(e) Entire Agreement; Amendments . This Agreement supersedes all other prior oral or written agreements between the Buyer, the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement contain the entire understanding of the parties with respect to the matters covered herein and, except as specifically set forth herein, neither the Company nor any Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be amended other than by an instrument in writing signed by the parties hereto. No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought.

(f) Notices . Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one Business Day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

If to the Company:

Hebron Technology Co., Ltd.
No. 936, Jinhai 2nd Road, Konggang New Area
Longwan District
Wenzhou City, Zhejiang Province
People’s Republic of China
Attention:   Anyuan Sun, Chief Executive Officer

Copy (for informational purposes only) to:

Kaufman & Canoles, P.C.
Two James Center, 14th Floor
1021 East Cary Street
Richmond, Virginia 23219
Telephone: +1 (804) 771-5700
Facsimile:    +1 (804) 771-5777
Attention:   Anthony W. Basch, Esq.

If to the Buyer or Sellers, to such address and/or facsimile number and/or to the attention of such other person as the recipient party has specified by written notice given to the Company five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.

Any document shall be deemed to have been duly served if marked for the attention of the agent for service of process at its address (as set forth in this Section 11(f)) or such other address in the United States as may be notified to the party wishing to serve the document and delivered in accordance with the notice provisions set forth in this Section 11(f).

(g) Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.

(h) No Third Party Beneficiaries . This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

(i) Survival . The representations and warranties of the Sellers, Buyer and the Company shall survive for two (2) years following the Closing (unless the provision specifically contemplates performance subsequent to the Closing or termination as of Closing). Notwithstanding anything in this Agreement to the contrary, for the sole purpose of determining the amount of any liability hereunder, the representations and warranties contained in Article 3 shall be deemed to have been made without being qualified by “materiality” or “Material Adverse Effect” or similar qualifications, and for the sole purpose of determining whether any misrepresentation or breach of representations or warranties have occurred, any qualification contained in such representation or warranty relating to “materiality” or “Material Adverse Effect” shall be construed to mean an amount in excess of US$10,000. Each of the parties agrees to indemnify and hold harmless each of the other parties for damages resulting from any material misrepresentation or breach of such party’s representations and warranties. Without limiting the foregoing, if the Company’s actions or the actions of anyone acting on the Company’s behalf prior to Closing result in the assessment of fines, penalties, or disgorgement of profits against the Buyer or its Affiliates or representatives for violation of applicable laws, the Company hereby agrees to indemnify the Buyer and its Affiliates and representatives for same, as well as any costs or fees incurred in investigating, remediating, responding to government inquiries or investigations, or defending against legal claims relating to such actions.

(j) Further Assurances . Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

(k) No Strict Construction . The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

[Share Purchase Agreement Signature Pages Follow]

[Share Purchase Agreement Signature Page - Company]

IN WITNESS WHEREOF , the Sellers, Buyer and the Company have caused their respective signature page to this Share Purchase Agreement to be duly executed as of the date first written above.

[Share Purchase Agreement Signature Page – Buyer]

IN WITNESS WHEREOF , the Sellers, Buyer and the Company have caused their respective signature page to this Share Purchase Agreement to be duly executed as of the date first written above.

[Share Purchase Agreement Signature Page – Seller - Wise]

IN WITNESS WHEREOF , the Sellers, Buyer and the Company have caused their respective signature page to this Share Purchase Agreement to be duly executed as of the date first written above.

[Share Purchase Agreement Signature Page – Seller – Sun Zhang]

IN WITNESS WHEREOF , the Sellers, Buyer and the Company have caused their respective signature page to this Share Purchase Agreement to be duly executed as of the date first written above.

20

Exhibit 99.3

Annex B: Appraisal of NiSun BVI

咨询报告

价值分析目标公司: 范太克（上海）投资控股有限公司

价值分析对象: 股东全部权益

委托方: 范太克（上海）投资控股有限公司

报告编号: 蓝策报字 R2019-1208-BJ

最后编辑时间: 2019年5月27日

By its very nature, valuation work cannot be regarded as an exact science and the conclusions arrived at in many cases will of necessity be subjective and dependent on the exercise of individual judgement. There is, therefore, no indisputable single value and we normally express our valuation analysis as falling within a likely range although we provide an estimate on a single figure expression of value within that range as you have requested for this analysis.

We make no representation regarding the sufficiency of our work either for purposes for which this Report has been requested or for any other purpose. The sufficiency of the work we performed is solely the addressee’s responsibility, as are any decisions with respect to the estimation of market value.

This report is subject to the proficiency of our valuation firm. The users of the report should exercise their own judgment independently when making any business decisions.

We do not have present or prospective interest or bias with respect to Fintech.

Valuation Summary

Based on our analysis and the information provided by the Company, having regard to our work scope and limitations in scope of work, and subject to the significant assumptions as well as general assumptions and limiting conditions, the equity interest owned by Fintech has been estimated to be falling in a range from approximately RMB 54.374 million to 61.349 million as of the Valuation Date by Income approach, and a range from approximately RMB 57.162 million to 59.737 million as of the Valuation Date by Market approach. Please refer to the following table for details:

Our valuation results highly depend on the creditability and reliability of the financial projections prepared by the Management. However, because events and circumstances frequently do not occur as expected, there will usually be differences between predicted and actual results, and those differences may be material. Accordingly, we express no opinion as to how closely the actual results achieved will correspond to those predicted for the Company and we take no responsibility for the achievement of predicted results.

For and on behalf of

蓝策管理咨询（北京）有限公司

目录

3. Company Overview

汇晶社 is an innovative asset allocation service platform under 范太克（上海）投资控股有限公司 (hereafter referred to as “Fintech” or the “ the target Company ” ) . As a third-party service platform for direct selling banks, 汇晶社 has connected several domestic commercial banks and rural commercial banks to provide asset allocation services, Internet traffic diversion services, IT business system construction services and transaction structure design and construction services. By integrating consumer financial assets, traffic, IT business system technology and big data risk control business experience, we will create an eco-finance technology platform for professional services direct banking.

iiMedia Research consulting analyst believes that, fin-tech products will be more diversified in the future. Combining with specific consumption scenarios can better meet the users’ characteristic needs and improve the efficiency of users obtaining. Fin-tech products will be more integrated with specific scenarios to serve the users in the future. Platform-based Fin-tech enterprises from industries like e-commerce and logistics will have greater advantages in integrating products with scenarios. These platforms can provide specific products through concrete scenarios such as consumer consumption or supply chain logistics operation, and thus have more advantages in market development.

The application of fin-tech has further released the development potential of the financial industry. The huge market space has attracted more enterprises. Traditional financial institutions, Internet financial enterprises, Internet enterprises, etc. have joined in one after another, which intensifies the market competition. Fin-tech enterprises need to further improve their core competence to develop in the fierce market competition environment.

iiMedia Research consulting analyst believes that, fin-tech products involve fields of payment, wealth management, investment, etc., and penetrate into all aspects of users’ daily life. Its application will involve large amount of users’ private information, and will seriously affect the users once the hidden problems in Internet operation erupt. Therefore, fin-tech enterprises need to further strengthen user information security, build early warning mechanism and improve the technology of information security.

The calculation method of weighted average cost of capital is as follows: