The following discussion and analysis of the results of our operations and
financial condition should be read in conjunction with our unaudited condensed
financial statements, and the notes to those unaudited condensed financial
statements that are included elsewhere in this Report. All monetary figures are
presented in U.S. dollars, unless otherwise indicated.



Our Management's Discussion and Analysis contains not only statements that are
historical facts, but also statements that are forward-looking. Forward-looking
statements are, by their very nature, uncertain and risky. These risks and
uncertainties include international, national, and local general economic and
market conditions; our ability to sustain, manage, or forecast growth; our
ability to successfully make and integrate acquisitions; new product development
and introduction; existing government regulations and changes in, or the failure
to comply with, government regulations; adverse publicity; competition; the loss
of significant customers or suppliers; fluctuations and difficulty in
forecasting operating results; change in business strategy or development plans;
business disruptions; the ability to attract and retain qualified personnel; the
ability to protect technology; the risk of foreign currency exchange rate; and
other risks that might be detailed from time to time in our filings with the
Securities and Exchange Commission.



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



Overview



Code Chain New Continent Limited ("CCNC", formerly known as JM Global Holding
Company and TMSR Holding Company Limited) is a holding company incorporated in
the State of Nevada with no material operations of its own. We currently conduct
business through Shanghai Highlight Media Co., Ltd. ("Highlight Media")
("Highlight Media"). For accounting purposes, Makesi IoT Technology (Shanghai)
Co., Ltd. ("Makesi WFOE") is the primary beneficiary of Highlight Media.
Accordingly, under U.S. GAAP, CCNC treats Highlight Media as the consolidated
affiliated entity and has consolidated Wuge's financial results in CCNC's
financial statements. The VIE structure involves unique risks to investors. The
VIE agreements have not been tested in a court of law and the Chinese regulatory
authorities could disallow this VIE structure, which would likely result in a
material change in our operations and the value of our securities, including
that it could cause the value of such securities to significantly decline or
become worthless.



Book Publishing Planning



Since 2018, Highlight Media has cooperated with authors and publishing houses in
China in corporate history and entrepreneur biographies planning and publishing
in the lens of the finance industry. Highlight Media published "New Industrial
Era - Chinese Industrialist Zhang Yuqiang and His New Stone Story", "Endless
Realm - the Growth if China Ping'An", "Unfinished Beauty - Fifteen Years of H
World Group", "All Things Are Born - TCL's Forty Years", "From Connection to
Activation - Digitalization and China's New Industrial Cycle" and other
best-selling books in corporate history, finance and economics and has sold more
than 200,000 copies. Highlight Media also plans and organizes online and offline
activities with the publishing houses such as new book launches and book sharing
sessions for customers, to promote new books and build influence and reputation
for the corporate clients.



Financial Self-Media




In 2016, Highlight Media founded the financial self-media "Guangdian 2049",
which was renamed as "Guangdian Finance" in 2019, focusing on new ideas, new
businesses, technologies, characters, investments, management, etc. in finance
and economics. Since 2019, Highlight Media has posted 195 original articles and
has cumulated more than 10,000 followers. Some of the top articles have more
than 27,000 views. In 2021, Highlight Media created an account "Highlight
Finance" on Tou Tiao, a Chinese news and information content platform. The
"Highlight Finance" account has posted 70 original articles. Some of the top
articles on Highlight Finance has more than 60,000 views. Highlight Finance has
been trusted by various high-quality enterprises, and has directed more than 100
original articles on finance and economics. Highlight Finance's contracted
authors have also been invited to create than 10 manuscripts for the well-known
financial self-media "Qin Shuo Moments". Some of the top articles have more

than
20,000 views.



Public Relations



Highlight Media also offer corporate clients with serviced regarding marketing
materials, press releases, seminars, exhibitions, conferences, and public
relations management. Highlight Media has established stable and long-term
cooperative relations with many companies in the financial industry, such as
Deshijia Ophthalmology, Haitong Hengxin, Shanshan Co., Ltd. etc., and has gained
rich experience, resources and connections and strong Internet communication
service capabilities.



Prior to September 28, 2022, we also conducted business through Wuge Network
Games Co., Ltd. ("Wuge"). Wuge focused its business on research, development and
application of Internet of Things (IoT) and electronic tokens Wuge digital door
signs. On September 28, 2022, Makesi WFOE entered into a termination agreement
with Wuge and the Wuge Shareholders to terminate the VIE Agreements and to
cancel the Shares, based on the average closing price of $0.237 per share of the
Company during the 30 trading days immediately prior to the date of the
termination agreement. As a result of such termination, the Company no longer
treats Wuge as a consolidated affiliated entity or consolidates the financial
results and balance sheet of Wuge in the Company's consolidated financial
statements under U.S. GAAP.



                                       26






Prior to March 30, 2021, we were also engaged in coal wholesales and sales of
coke, steels, construction materials, mechanical equipment and steel scrap
through Jiangsu Rong Hai Electric Power Fuel Co., Ltd. ("Rong Hai"), a then VIE
of the Company. On March 30, 2021, the Company entered into a share purchase
agreement with a buyer unaffiliated with the Company (the "Buyer"), and Qihai
Wang, former director of the Company (the "Payee"). Pursuant to the agreement,
the Company agreed to sell and the Buyer agreed to purchase all the issued and
outstanding ordinary shares (the "Tongrong Shares") of Tongrong Technology
(Jiangsu) Co., Ltd. ("Tongrong WFOE"), a PRC company and an indirect subsidiary
of the Company. The Payee agreed to be responsible for the payment of the
purchase price on behalf of Buyer. On March 31, 2021, the Company closed the
sale of the Tongrong Shares and caused the CCNC Shares to be cancelled. Tongrong
WFOE had a series of VIE agreements with Rong Hai and the shareholders of Rong
Hai. The sale of Tongrong Shares included disposition of Rong Hai. As a result,
as of March 31, 2021, operations of Tongrong WFOE and Rong Hai have been
designated as discontinued operations.



Recent Development

Acquisition of Shanghai Yuanma Food and Beverage Management Co., Ltd.





On April 14, 2022, the Company entered into a Share Purchase Agreement ("SPA")
with Shanghai Yuanma Food and Beverage Management Co., Ltd., a PRC company
("Yuan Ma"), and all the shareholders of Yuan Ma ("Yuanma Shareholders"). Yuanma
Shareholders are Wei Xu, the Chief Executive Officer and Chairman of the Board
of the Company, and Jiangsu Lingkong Network Joint Stock Co., Ltd., which is
controlled by Wei Xu.




Pursuant to the SPA, the Company agreed to issue an aggregate of 7,680,000
shares of common stock of the Company (the "Shares"), valued at $1.00 per share,
to the Yuanma Shareholders, in exchange for Yuanma Shareholders' agreement to
enter into and to cause Yuan Ma to enter into certain agreements ("Yuan Ma VIE
Agreements") with WFOE, the Company's indirectly owned subsidiary, to establish
a VIE (variable interest entity) structure (the "Acquisition"). Through the Yuan
Ma VIE Agreements, Makesi WFOE will receive the economic benefits of Yuan Ma
and, for accounting purposes, the Company will consolidate the financial results
of Yuan Ma in the consolidated financial statements under generally accepted
accounting principles in the U.S. (U.S. GAAP). The Company has also agreed to
hold a special meeting of the stockholders of the Company as soon as possible in
connection with the Acquisition. The closing of the Acquisition is conditioned
on the approval of the stockholders of the Company and any required regulatory
approval.



On June 13, 2022, the Company held a special meeting of stockholders and
approved the issuance of the Shares to Wei Xu. On June 21, 2022, pursuant to the
SPA, Makesi WFOE entered into a series of Yuan Ma VIE Agreements with Yuan Ma
and Yuanma Shareholders, and the Shares were issued to Wei Xu. The transaction
contemplated in the SPA was completed. We plan to file the financial statements
and pro forma financial information in a current report on Form 8-K to be filed
on or before September 6, 2022.

Material terms of each of the Yuan Ma VIE Agreements are described below:





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



Equity Pledge Agreement. Under the equity pledge agreement among Makesi WFOE,
Yuan Ma and Yuan Ma Shareholders dated June 21, 2022, Yuan Ma Shareholders
pledged all of their equity interests in Yuan Ma to Makesi WFOE to guarantee
Yuan Ma's performance of relevant obligations and indebtedness under the
technical consultation and services agreement. In addition, Yuan Ma Shareholders
will complete the registration of the equity pledge under the agreement with the
competent local authority. If Yuan Ma breaches its obligation under the
technical consultation and services agreement, Makesi WFOE, as pledgee, will be
entitled to certain rights, including the right to sell the pledged equity
interests. This pledge will remain effective until all the guaranteed
obligations are performed or the Yuan Ma Shareholders cease to be shareholders
of Yuan Ma.



Equity Option Agreement. Under the equity option agreement among Makesi WFOE,
Yuan Ma and Yuan Ma Shareholders dated June 21, 2022, each of Yuan Ma
Shareholders irrevocably granted to Makesi WFOE or its designee an option to
purchase at any time, to the extent permitted under PRC law, all or a portion of
his equity interests in Yuan Ma. Also, Makesi WFOE or its designee has the right
to acquire any and all of its assets of Yuan Ma. Without Makesi WFOE's prior
written consent, Yuan Ma's shareholders cannot transfer their equity interests
in Yuan Ma and Yuan Ma cannot transfer its assets. The acquisition price for the
shares or assets will be the minimum amount of consideration permitted under the
PRC law at the time of the exercise of the option. This pledge will remain
effective until all options have been exercised.



Voting Rights Proxy and Financial Support Agreement. Under the voting rights
proxy and financial support agreement among Makesi WFOE, Yuan Ma and Yuan Ma
Shareholders dated June 21, 2022, each Yuan Ma Shareholder irrevocably appointed
Makesi WFOE as its attorney-in-fact to exercise on such shareholder's behalf any
and all rights that such shareholder has in respect of his equity interests in
Yuan Ma, including but not limited to the power to vote on its behalf on all
matters of Yuan Ma requiring shareholder approval in accordance with the
articles of association of Yuan Ma. The proxy agreement is for a term of 20
years and can be extended by Makesi WFOE unilaterally by prior written notice to
the other parties.



                                       27

Cancellation of Asset Purchase Agreement with Sichuan RiZhanYun Jisuan Co., Ltd.


On February 23, 2021, the Company entered into an asset purchase agreement with
Sichuan RiZhanYun Jisuan Co., Ltd., (the "Seller"), which was amended and
restated on April 16, 2021 and further amended on May 28, 2021 (the
"Agreement"). Pursuant to the Agreement, the Company purchased, and the Seller
sold, a total of 10,000 Bitcoin mining machines (the "Assets") for a total
purchase price of RMB 40,000,000 or US$6,160,000 based on the exchange rate as
of April 8, 2021 (the "Purchase Price"), payable in the form of 1,587,800 shares
of common stock of the Company. In addition, pursuant to the Agreement, the
Seller agreed to cause revenue and any other source of income from the operation
of the Assets to be paid to the Company, payable in cryptocurrency to be
deposited into a cryptocurrency wallet held by the Company on a daily basis. The
Company agreed to issue to the Seller or its designees certain bonuses, payable
in the common stock of the Company upon meeting certain milestones. On June 1,
2021, the Company issued to the Seller's designee 2,513,294 shares of common
stock (the "Shares"), consisted of (i) the Purchase Price in the form of
1,587,800 shares of common stock and (ii) 925,494 bonus shares for meeting and
exceeding certain milestones. Because the Assets were never delivered to the
Company and the Company has not received and is not able to accept
cryptocurrency from the operation of the Assets, the Company and the Seller
agreed to rescind the Agreement and cancel the Shares on September 26, 2022.



Termination of the VIE Agreements with Sichuan Wuge Network Games Co., Ltd.



In January 2020, Tongrong Technology (Jiangsu) Co., Ltd., a then indirect
subsidiary of the Company ("Tongrong WFOE"), Sichuan Wuge Network Games Co.,
Ltd. ("Wuge"), and shareholders of Wuge (the "Wuge Shareholders") entered into a
share purchase agreement, pursuant to which the Company issued a total of
4,000,000 shares of common stock of the Company (the "Shares") to the Wuge
Shareholders in exchange for Tongrong WFOE, Wuge and the Wuge Shareholders
entering into certain Technical Consultation and Services Agreement., Equity
Pledge Agreement, Equity Option Agreement, Voting Rights Proxy and Financial
Support Agreement, which was assigned by Tongrong WFOE to Makesi IoT Technology
(Shanghai) Co., Ltd., an indirect subsidiary of the Company ("Makesi WFOE") in
January 2021 (such agreements, as assigned, the "VIE Agreements") . The VIE
Agreements established a "Variable Interest Entity" (VIE) structure, and
pursuant to which the Company treated Wuge as a consolidated affiliated entity
and consolidated the financial results and balance sheet of Wuge in the
Company's consolidated financial statements under U.S. GAAP.



On September 28, 2022, Makesi WFOE entered into a termination agreement (the
"Termination Agreement") with Wuge and the Wuge Shareholders to terminate the
VIE Agreements and to cancel the Shares, based on the average closing price of
$0.237 per share of the Company during the 30 trading days immediately prior to
the date of the Termination Agreement. As a result of such termination, the
Company no longer treat Wuge as a consolidated affiliated entity or consolidates
the financial results and balance sheet of Wuge in the Company's consolidated
financial statements under U.S. GAAP.

Acquisition of Shanghai Highlight Media Co., Ltd.

On September 16, 2022, the Company entered into a Share Purchase Agreement ("SPA") with Shanghai Highlight Media Co., Ltd., a PRC company ("Highlight Media"), and all the shareholders of Highlight Media ("Highlight Media Shareholders").


Pursuant to the SPA, the Company agreed to issue an aggregate of 9,000,000
shares of common stock of the Company (the "Shares"), valued at $0.25 per share,
to the Highlight Media Shareholders, in exchange for Highlight Media's and
Highlight Media Shareholders' agreement to enter into certain agreements (the
"VIE Agreements") with Makesi IoT Technology (Shanghai) Co., Ltd. ("WFOE"), the
Company's indirectly owned subsidiary, to establish a VIE (variable interest
entity) structure (the "Acquisition"). A "Variable Interest Entity" does not
describe a legal relationship; it is an accounting concept. Under U.S. Generally
Accepted Accounting Principles (U.S. GAAP), if through contractual arrangements,
Entity A will absorb the losses or receive potentially significant benefits from
the operations of Entity B, then the financial results and balance sheet of
Entity B should be consolidated with the financial results and balance sheet in
Entity A's consolidated financial statements. We have evaluated the guidance in
FASB ASC 810 and determined that, after the VIE Agreements are signed, WFOE will
be the primary beneficiary of Highlight Media for accounting purposes, because,
pursuant to the VIE Agreements, once signed, Highlight Media shall pay service
fees to WFOE in the amount of 100% of the Highlight Media's after-tax net
income, while WFOE shall be obligated to absorb all of losses of Highlight
Media. Accordingly, under U.S. GAAP, WFOE will treat Highlight Media as a
consolidated affiliated entity and will consolidate the financial results and
balance sheet of Highlight Media in the consolidated financial statements under
U.S. GAAP.

Material terms of each of the VIE Agreements with Highlight Media are described below:





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



Equity Pledge Agreement. Under the equity pledge agreement among Makesi WFOE,
Wuge and Wuge Shareholders dated September 16, 2022, Wuge Shareholders pledged
all of their equity interests in Wuge to Makesi WFOE to guarantee Wuge's
performance of relevant obligations and indebtedness under the technical
consultation and services agreement. In addition, Wuge Shareholders will
complete the registration of the equity pledge under the agreement with the
competent local authority. If Wuge breaches its obligation under the technical
consultation and services agreement, Makesi WFOE, as pledgee, will be entitled
to certain rights, including the right to sell the pledged equity interests.
This pledge will remain effective until all the guaranteed obligations are
performed or the Wuge Shareholders cease to be shareholders of Wuge.



                                       28





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



Voting Rights Proxy and Financial Support Agreement. Under the voting rights
proxy and financial support agreement among Makesi WFOE, Wuge and Wuge
Shareholders dated September 16, 2022, each Wuge Shareholder irrevocably
appointed Makesi WFOE as its attorney-in-fact to exercise on such shareholder's
behalf any and all rights that such shareholder has in respect of his equity
interests in Wuge, including but not limited to the power to vote on its behalf
on all matters of Wuge requiring shareholder approval in accordance with the
articles of association of Wuge. The proxy agreement is for a term of 20 years
and can be extended by Makesi WFOE unilaterally by prior written notice to

the
other parties.

Change of Directors and Officers


On September 15, 2022, Mr. Fei Gan tendered his resignation as a director, the
chairman of the Nominating and Corporate Governance Committee, a member of the
Compensation Committee, and a member of the Audit Committee of the Company,
effective September 15, 2022. The resignation of Mr. Gan was not a result of any
disagreement with the Company's operations, policies or procedures.



On September 15, 2022, Mr. Siyang Hu tendered his resignation as a director and
a member of the Nominating and Corporate Governance Committee, the Compensation
Committee, and the Audit Committee of the Company, effective September 15, 2022.
The resignation of Mr. Hu was not a result of any disagreement with the
Company's operations, policies or procedures.



On September 15, 2022, approved by the Board of Directors, the Nominating and
Corporate Governance Committee and the Compensation Committee, Ms. Junhong He
was appointed as a director and the chairman of the Nominating and Corporate
Governance Committee, a member of the Compensation Committee, and a member of
the Audit Committee of the Company, effective September 15, 2022, and Ms. Jing
Zhang was appointed as a director and a member of the Nominating and Corporate
Governance Committee, the Compensation Committee, and the Audit Committee of the
Company, effective September 15, 2022.

The Board has determined that each of Ms. Junhong He and Ms. Jing Zhang is independent within the meaning of Nasdaq Listing Rule 5605(a)(2).





On October 4, 2022, Mr. Wei Xu tendered his resignation as the Chief Executive
Officer, President, Chairman of the Board and a director of the Company,
effective October 4, 2022. The resignation of Mr. Wei Xu was not a result of any
disagreement with the Company's operations, policies or procedures.



On October 4, 2022, Mr. Bibo Lin tendered his resignation as the Vice President
and a director of the Company, effective October 4, 2022. The resignation of Mr.
Bibo Lin was not a result of any disagreement with the Company's operations,
policies or procedures.




On October 4, 2022, approved by the Board of Directors, the Nominating and
Corporate Governance Committee and the Compensation Committee, Mr. Hongxiang Yu
was appointed as the Chief Executive Officer, President, Chairman of the Board
and a director of the Company, effective October 4, 2022, and Ms. Shuang Zhang
was appointed as the Vice President and a director of the Company, effective
October 4, 2022.



On November 10, 2022, Mr. Tianxiang Zhu tendered his resignation as the Chief
Operating Officer and a director of the Company, effective November 10, 2022.
The resignation of Mr. Tianxiang Zhu was not a result of any disagreement with
the Company's operations, policies or procedures.



On November 10, 2022, Mr. Chengwei Mo tendered his resignation as a director,
the Chair of the Audit Committee, and a member of the Nominating and Corporate
Governance Committee and the Compensation Committee of the Company, effective
November 10, 2022. The resignation of Mr. Chengwei Mo was not a result of any
disagreement with the Company's operations, policies or procedures.



On November 10, 2022, the Board of Directors appointed Ms. Jing Zhang as the
Chair of the Audit Committee, effective November 10, 2022. The Board has
determined that Ms. Zhang meets the "audit committee financial expert" standards
of the SEC for service on the Audit Committee.

Change of Independent Registered Public Accounting Firm

On October 11, 2022, the Company notified its independent registered public accounting firm, WWC, P.C. its decision to dismiss WWC, P.C. as the Company's auditor.

On October 11, 2022, the Audit Committee and the Board of Directors of the Company appointed Enrome LLP as its new independent registered public accounting firm to audit the Company's financial statements.





                                       29

Notice of Failure to Satisfy a Continued Listing Rule and Reverse Split





On May 5, 2022, the Company received a written notice from the Listing
Qualifications Department of the Nasdaq Stock Market ("Nasdaq") regarding the
Company's failure to comply with Nasdaq Listing Rule 5550(a)(2), which requires
listed securities to maintain a minimum bid price of $1.00 per share. A failure
to comply with Nasdaq Listing Rule 5550(a)(2) exists when listed securities fail
to maintain a closing bid price of at least $1.00 per share for 30 consecutive
business days. Based on the closing bid price for the last 30 consecutive
business days (including, in particular, the period March 23, 2022 through May
4, 2022), the Company failed to meet the aforesaid requirement. The Company was
provided a period of 180 calendar days, until November 1, 2022, to regain
compliance.



On November 2, 2022, the Company received a written notice from Nasdaq stating
that, although the Company had not regained compliance with the minimum bid
price requirement by November 1, 2022, in accordance with Nasdaq
Listing Rule 5810(c)(3)(A), the Company is eligible for an additional 180
calendar day period, or until May 1, 2023, to regain compliance with Nasdaq
Listing Rule 5550(a)(2). To regain compliance, the closing bid price of the
Company's common stock must meet or exceed $1.00 per share for a minimum of ten
consecutive business days during this 180-day period.



At the Company's special meeting of stockholders held on October 18, 2022, the
stockholders approved an amendment to the Company's articles of incorporation,
as amended, to effect a reverse stock split of the outstanding shares of our
common stock, at a ratio of between 1-for-10 and 1-for-30 as determined by our
Board of Directors in their sole discretion, prior to the one-year anniversary
of the special meeting.



On November 4, 2022, as approved and authorized by the Board of Directors on
October 21, 2022, the Company filed a Certificate of Amendment to the Articles
of Incorporation (the "Certificate of Amendment") with the Nevada Secretary of
State to effect a reverse stock split of the outstanding shares of common stock,
par value $0.0001 per shares, of the Company at a ratio of one-for-thirty (30),
which will become effective at 12:01 a.m. on November 9, 2022 (the "Reverse
Stock Split"). Upon effectiveness of the Reverse Stock Split, every thirty (30)
outstanding shares of common stock will be combined into and automatically
become one share of common stock. No fractional shares will be issued in
connection with the Reverse Stock Split and all such fractional interests will
be rounded up to the nearest whole number of shares of common stock. The
authorized shares prior to and following the Reverse Stock Split will remain the
same at 200,000,000 shares of common stock, par value $0.0001 per shares, and
20,000,000 shares of preferred stock, par value $0.0001 per shares.
The Reverse Stock Split does not alter the par value of the Company's common
stock or modify any voting rights or other terms of the common stock. The
Company's common stock will continue to trade on the Nasdaq Capital Market under
the existing symbol "CCNC". The new CUSIP number following the Reverse Stock
Split is 19200A204. Although the Company will use all reasonable efforts to
achieve compliance with Rule 5550(a)(2), there can be no assurance that the
Company will be able to regain compliance with that rule or will otherwise be in
compliance with other Nasdaq listing criteria.

Key Factors that Affect Operating Results





Highlight Media, founded in 2016, is an integrated marketing service agency,
focusing on enterprise brand management, crisis public relations, intelligent
public opinion monitoring, media PR, financial and economic we-media operation,
digital face application, large-scale exhibition services and other businesses.
It is committed to becoming a modern science and technology media organization
that fully empowers the development of customer enterprises in the era of
artificial intelligence and big data. Its growth strategy is substantially
dependent upon our ability to market our intended products and services
successfully to prospective clients in China. This requires that we heavily rely
upon our sales and marketing team and marketing partners. Failure to reach
potential clients will significantly affect our results of operation and could
have a material adverse effect on our business, financial conditions and the
results of our operations.



                                       30





The threats to network and data security are increasingly diverse and
sophisticated. Despite the efforts and processes to prevent breaches, the social
media platforms, systems and services of third parties that Highlight Media uses
in its operations are vulnerable to cyber security risks, including
cyber-attacks such as viruses and worms, phishing attacks, denial-of-service
attacks, physical or electronic break-ins, employee theft or misuse, and similar
disruptions from unauthorized tampering with the servers and computer systems or
those of third parties that Highlight Media use in its operations, which could
lead to interruptions, delays, loss of critical data, and loss of consumer
confidence.



In addition, Highlight Media may be the target of email scams that attempt to
acquire sensitive information or company assets. Despite the efforts to create
security barriers to such threats, Highlight Media may not be able to entirely
mitigate these risks. Any cyber-attack that attempts to obtain our data and
assets, disrupt Highlight Media's service, or otherwise access the social media
platforms, systems and services of third parties that Highlight Media uses, if
successful, could adversely affect the business, operating results, and
financial condition, be expensive to remedy, and damage the reputation of
Highlight Media.



The media industries involving IoT devices, software and services are
characterized by the existence of a large number of patents, copyrights,
trademarks and trade secrets and by frequent litigation based on allegations of
infringement or other violations of intellectual property rights. Much of this
litigation involves patent holding companies or other adverse patent owners who
have no relevant product revenues of their own, and against whom our own patent
portfolio may provide little or no deterrence.



The nature of Highlight Media's business and its publications involves copy
rights. We cannot assure you that we, our subsidiaries or the variable interest
entities will prevail in any future copyright infringement litigations.
Defending such claims, regardless of their merit, could be time-consuming and
distracting to management, result in costly litigation or settlement, cause
delays, or require us, our subsidiaries or the variable interest to enter into
royalty or licensing agreements. In addition, we, our subsidiaries or the
variable interest entities could be obligated to indemnify our customers against
third parties' claims of intellectual property infringement based on
publications. If our products or solutions violate any third-party intellectual
property rights, we could be required to withdraw them from the market, re-edit
and re-publish them or seek to obtain licenses from third parties, which might
not be available on reasonable terms or at all. Any efforts re-edit and
re-publish our publications, obtain licenses from third parties on favorable
terms might not be successful and, in any case, might substantially increase our
costs and harm our business, financial condition and operating results.
Withdrawal of any of our publications from the market could harm our business,
financial condition and operating results.



Coronavirus (COVID-19) Update




In December 2019, a novel strain of coronavirus causing respiratory illness
("COVID-19") surfaced in Wuhan, China, spreading at a fast rate in January and
February of 2020, and confirmed cases were also reported in other parts of the
world. In reaction to this outbreak, an increasing number of countries imposed
travel suspensions to and from China following the World Health Organization's
"public health emergency of international concern" announcement on January 30,
2020. Since this outbreak, business activities in China and many other countries
including U.S. have been disrupted by a series of emergency quarantine measures
taken by the government.



As a result, our operations in China have been materially affected. Our office
in Hubei Province, China were closed since the lockdown was enforced on January
23, 2020. The economic disruption caused by COVID-19 were catastrophic for the
waste management business in Wuhan, which had no revenue and negative operating
income since the fourth quarter of 2019 and no revenue or operating income for
the first and second quarter of 2020. The waste management business lost
employees, suppliers and customers and was notable to recover. As a result, we
sold the waste management business located in Wuhan. In particular, on June 30,
2020, the Company disposed China Sunlong and its subsidiaries, including
Shengrong Environmental Protection Holding Company Limited ("Shengrong BVI"), a
British Virgin Islands company, Hong Kong Shengrong Environmental Company
Limited ("Sunrong HK"), a Hong Kong company, Shengrong Environmental Protection
Technology (Wuhan) Co., Ltd. ("Shengrong WFOE"), PRC company, and Wuhan HOST
Coating Materials Co., Ltd. ("Wuhan HOST"), a PRC company, pursuant to a share
purchase agreement with Jiazhen Li, a former Chief Executive Officer of the
Company, and Long Liao and Chunyong Zheng, former shareholders of Wuhan Host.
Pursuant to the share purchase agreement, the Company sold 100% equity interests
in China Sunlong to Jiazhen Li in exchange for forfeition and cancellation of
all 1,012,932 shares of common stock of the Company held by Long Liao and
Chunyong Zheng. In addition, our offices in Jiangsu Province and Sichuan
Province in China were temporarily closed from early February until early March
2020.



The extent to which COVID-19 negatively impacts our business is highly uncertain
and cannot be accurately predicted. We believe that the coronavirus outbreak and
the measures taken to control it may have a significant negative impact on not
only our business, but economic activities globally. The magnitude of this
negative effect on the continuity of our business operation in China remains
uncertain. These uncertainties impede our ability to conduct our daily
operations and could materially and adversely affect our business, financial
condition and results of operations, and as a result could adversely affect our
stock price and create more volatility.



                                       31





Results of Operations

Three Months Ended September 30, 2022 vs. September 30, 2021





                                                                                              Percentage
                                               2022             2021            Change          Change
Revenues -Enterprise brand management
service                                    $          -                -     $          -               -

Total revenues                                        -                -                -               -

Cost of Revenues -Enterprise brand
management service                                    -                -                -               -

Total cost of revenues                                -                -                -               -

Gross profit                                          -                -                -               -
Operating expenses                               64,041          747,708         (683,667 )         (91.4 )%
Loss from operations                            (64,041 )       (747,708 )        683,667           (91.4 )%
Other income, net                                     -          556,493         (556,493 )        (100.0 )%
Loss  from continuing operations                (64,041 )       (191,215 )        127,174           (66.5 )%
Discontinued operations:
Loss from discontinued operations                     -       (2,463,494 )      2,463,494          (100.0 )%
Gain(Loss) on disposal, net of taxes         (4,027,930 )         15,661   

   (4,043,591 )      (25819.5 )%
Net Loss                                     (4,091,971 )     (2,639,048 )     (1,452,923 )          55.1 %




Operating Expenses

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





SG& A expenses decreased by approximately $0.7 million from approximately $0.7
million for the three months ended September 30, 2021 to approximately $64,041
for the three months ended September 30, 2022. The decrease was mainly due

to
the disposition of Wuge.



Loss from Operations



As a result of the foregoing, loss from operations for the three months ended
September 30, 2022 was approximately $64,041, an decrease of approximately $0.7
million, or approximately 91.4%, from approximately loss from operations of $0.7
million for the three months ended September 30, 2021. The decrease was mainly
due to the disposition of Wuge.



                                       32





Net Loss



The Company's net loss increased by approximately $1.5 million, or 55.1%, to
approximately $4.0 million net loss for the three months ended September 30,
2022, from approximately $2.6 million net loss for the same period in 2021. The
increase was mainly due to the disposition of Wuge.

Nine Months Ended September 30, 2022 vs. September 30, 2021





                                                                                                 Percentage
                                               2022              2021             Change           Change
Revenues -Enterprise brand management
services                                   $           -                 -     $          -                -

Total revenues                                         -                 -                -                -

Cost of Revenues -Enterprise brand
management services                                    -                 -                -                -

Total cost of revenues                                 -                 -                -                -

Gross profit                                           -                 -                -                -
Operating expenses                            13,159,069        21,996,804       (8,837,735 )          (40.2 )%
Loss from operations                         (13,159,069 )     (21,996,804 )      8,837,735            (40.2 )%
Other income, net                                      -         2,367,311       (2,367,311 )         (100.0 )%

Loss from continuing operations              (13,159,069 )     (19,629,493 )      6,470,424            (33.0 )%
Discontinued operations:
Loss from discontinued operations             (6,287,250 )      (1,344,503 )     (4,942,747 )          367.6 %
Loss on disposal, net of taxes                (4,027,930 )     (11,218,835

)      7,190,905            (64.1 )%
Net Loss                                     (23,474,249 )     (32,192,831 )      8,718,582            (27.1 )%




Operating Expenses

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





SG& A expenses decreased by approximately $8.8 million from approximately $22.0
million for the nine months ended September 30, 2021 to approximately $13.2
million for the nine months ended September 30, 2022 . The decrease was mainly
due to the disposition of Wuge.



Loss from Operations



As a result of the foregoing, loss from operations for the nine months ended
September 30, 2022 was approximately $13.2 million, an decrease of approximately
$8.8 million, or approximately 40.2%, from approximately loss from operations of
$22.0 million for the nine months ended September 30, 2021. The decrease was
mainly due to the disposition of Wuge.



Net Loss



The Company's net loss decreased by approximately $8.7 million, or 27.1%, to
approximately $23.5 million net loss for the nine months ended September 30,
2022, from approximately $32.2 million net loss for the same period in 2021. The
decrease was mainly due to the disposition of Wuge.



                                       33

Critical Accounting Policies and Estimates





The preparation of the unaudited condensed financial statements in conformity
with accounting principles generally accepted in the United States requires our
management to make assumptions, estimates and judgments that affect the amounts
reported, including the notes thereto, and related disclosures of commitments
and contingencies, if any. We have identified certain accounting policies that
are significant to the preparation of our unaudited condensed consolidated
financial statements. These accounting policies are important for an
understanding of our financial condition and results of operation. Critical
accounting policies are those that are most important to the portrayal of our
financial conditions and results of operations and require management's
difficult, subjective, or complex judgment, often as a result of the need to
make estimates about the effect of matters that are inherently uncertain and may
change in subsequent periods. Certain accounting estimates are particularly
sensitive because of their significance to financial statements and because of
the possibility that future events affecting the estimate may differ
significantly from management's current judgments. We believe the following
critical accounting policies involve the most significant estimates and
judgments used in the preparation of our unaudited condensed consolidated
financial statements.



Cash and cash equivalents

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





Investments



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



Accounts receivable, net




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



Inventories



Inventories are comprised of raw materials, work in progress and finished goods
and are stated at the lower of cost or net realizable value using the weighted
average method in Highlight Media. Management reviews inventories for
obsolescence and cost in excess of net realizable value at least annually and
records a reserve against the inventory when the carrying value exceeds net

realizable value.



Prepayments



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



                                       34





Fair value measurement



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

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

? Level 1 inputs to the valuation methodology are quoted prices (unadjusted)


        for identical assets or liabilities in active markets.




    ?   Level 2 inputs to the valuation methodology include quoted prices for
        similar assets and liabilities in active markets, and inputs that are

observable for the assets or liability, either directly or indirectly, for


        substantially the full term of the financial instruments.




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




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



Revenue recognition




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



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



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



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



                                       35





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

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

Gross versus Net Revenue Reporting





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

Recently Issue Accounting Pronouncements


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

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





                                       36

Liquidity and Capital Resources





The Company has funded working capital and other capital requirements primarily
by equity contributions, loans from shareholders, cash flow from operations,
short term bank loans, loans from third parties. Cash is required to repay debts
and pay salaries, office expenses, income taxes and other operating expenses. As
of September 30, 2022, our net working capital was approximately minus $4.3
million, over 8% of the Company's current liabilities was from other payables -
related parties due to major shareholders. Removing these liabilities, the
Company had net working capital of $3.8 million and is expected to continue to
generate cash flow by operations from the acquisitions of new companies and
loans from related-parties in the twelve months period.



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

The following summarizes the key components of the Company's cash flows for the nine months ended September 30, 2022 and 2021.





                                               For the Nine Months ended
                                                     September 30,
                                                2022              2021

Net cash used in by operating activities    $    (966,745 )   $ (14,598,852 )
Net cash used in investing activities         (12,275,607 )         (95,241 )
Net cash provided by financing activities               -        22,795,019

Effect of exchange rate change on cash (1,095,699 ) (25,129 ) Net change in cash

$ (14,338,051 )   $   8,075,796




As of September 30, 2022 and December 31, 2021, the Company had cash in the
amount of $250,279 and $14,588,330, respectively. As of September 30, 2022 and
December 31, 2021, $47,498 and $14,385,549 and were deposited with various
financial institutions located in the PRC, respectively. As of September 30,
2022 and December 31, 2021, $202,781 and $202,781 were deposited with one
financial institution located in the United States, respectively.



Operating activities



Net cash used in operating activities was approximately $1.0 million for the
nine months ended September 30, 2022, as compared to approximately $14.6 million
net cash used in operating activities for the nine months ended September 30,
2021. Net cash provided by operating activities was mainly due to the increase
of approximately $12.9 million impairment of prepayments, increase of
approximately $4.0 million loss on disposal, the decrease of approximately $2.1
million of customer deposits, the increase of approximately $6.6 million of
Goodwill impairments, and the increase of approximately $0.9 million of taxes
payable.



Investing activities



Net cash used in investing activities was approximately $12.3 million for the
nine months ended September 30, 2022, as compared to approximately $95,241 net
cash used in investing activities for the nine months ended September 30,
2021. Net cash used in investing activities for the nine months ended September
30, 2022 was due to approximately $6,689 spending on purchase of equipment, the
increase of approximately $47,498 acquisition of Highlight Media and the
decrease of approximately $12.3 million disposal of discontinued operations.



Financing activities

Net cash provided by financing activities was nil for the nine months ended September 30, 2022, as compared to approximately $22.8 million net cash used in financing activities for the nine months ended September 30, 2021.





                                       37

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