EX-99.(A)(1)(A) 2 sctoi092519ex99-a1a_tkk.htm OFFER TO PURCHASE

Exhibit 99(a)(1)(a)

OFFER TO PURCHASE FOR CASH
by
TKK SYMPHONY ACQUISITION CORPORATION
Up to 25,000,000 of its Ordinary Shares
at a Purchase Price of $10.26 Per Share
in Connection with its Consummation of a Proposed Business Combination

TKK Symphony Acquisition Corporation (the “Company,” “TKK,” “we,” “us” or “our”) hereby offers to purchase up to 25,000,000 of its issued and outstanding ordinary shares, par value $0.0001 per share (the “ordinary shares”), at a purchase price of $10.26 per ordinary share (the “Purchase Price”), net to the seller in cash, without interest, for an aggregate purchase price of up to $256,500,000, upon the terms and subject to certain conditions described in this Offer to Purchase (this “Offer to Purchase”) and in the related Letter of Transmittal (“Letter of Transmittal,” which, together with this Offer to Purchase, as they may be amended or supplemented from time to time, constitute the “Offer”).

If you support the proposed Business Combination (as defined herein), you should not tender your ordinary shares pursuant to the Offer, because ordinary shares purchased by us pursuant to the Offer will cease to represent an interest in the continuing company following the Business Combination. However, even if you tender your ordinary shares pursuant to the Offer, all outstanding warrants of TKK to purchase ordinary shares will remain outstanding, and each outstanding right of TKK will be automatically converted into one-tenth (1/10) of an ordinary share upon the closing of the Business Combination.

Only ordinary shares validly tendered, and not properly withdrawn, will be purchased by us pursuant to the Offer. If we are not able to consummate the Business Combination substantially contemporaneously with the expiration of the Offer, we may amend, terminate, or extend the Offer. If we terminate the Offer, we will NOT: (1) purchase any ordinary shares pursuant to the Offer or (2) consummate the Business Combination in accordance with the terms of the Share Exchange Agreement described in this Offer to Purchase. If we do not consummate the Business Combination on or before February 20, 2020 (or until June 20, 2020 if we extend the period of time to consummate a business combination through the issuance of 25,000,000 warrants, each warrant to purchase one-half of an ordinary share, as a dividend to our public shareholders (“potential extension warrants”)), we will terminate the Offer and will commence winding up our affairs and, unless we identify an alternative initial business combination, will liquidate without completing a business combination.

The Purchase Price of $10.26 represents the amount that was on deposit as of October14, 2019, in the Trust Account (the “Trust Account”) initially established to hold the proceeds of our initial public offering (“IPO”) net of taxes payable, divided by the 25,000,000 ordinary shares sold in the IPO. See “The Offer — General” and “The Offer — Purchase Price.”

The Offer is being made pursuant to the terms of the share exchange agreement, dated as of September 6, 2019 (as may be amended from time to time, the “Share Exchange Agreement”), by and among TKK, Glory Star New Media Group Limited, a Cayman Islands exempted company (“Glory Star”), Glory Star New Media (Beijing) Technology Co., Ltd., a wholly foreign-owned enterprise limited liability company (“WFOE”) incorporated in the People’s Republic of China (“PRC”) and indirectly wholly-owned by Glory Star, Xing Cui Can International Media (Beijing) Co., Ltd., a limited liability company incorporated in the PRC (“Xing Cui Can”), Horgos Glory Star Media Co., Ltd., a limited liability company incorporated in the PRC (“Horgos,” and collectively with Xing Cui Can, the “VIEs”, and the VIEs, the WFOE and Glory Star, collectively, the “Glory Star Parties”, and the Glory Star Parties collectively with their respective subsidiaries, the “Glory Star Group”), each of Glory Star’s shareholders (collectively, the “Sellers”), TKK Symphony Sponsor1, TKK’s sponsor (the “Sponsor”), in the capacity as the representative from and after the closing of the Business Combination for TKK’s shareholders other than the Sellers (the “Purchaser Representative”), and Bing Zhang, in the capacity as the representative for the Sellers thereunder (the “Seller Representative”). Upon the consummation of the Business Combination, Glory Star will be a wholly owned subsidiary of TKK, and TKK will change its name to “Glory Star New Media Group Holdings Limited.”

Glory Star commenced operations in 2016. Through its subsidiaries and VIEs, Glory Star provides advertising and content production services, and operates a mobile and online advertising, digital media, and entertainment business in China, and is building one of the leading e-commerce platforms in China through its mobile app called 悦享视频App (“CHEERS App”) that allows its users to access its online store (e-Mall), video content, live streaming, and online games. The aggregate consideration to be provided by TKK to the Sellers pursuant to the Share Exchange Agreement will consist of: (i) an aggregate number of ordinary shares equal to $425,000,000 divided by the redemption price (the “Closing Payment Shares”), of which five percent of the Closing Payment Shares (the “Escrow Shares”) shall be deposited into escrow to secure certain indemnification obligations of the Sellers, plus (ii) earnout payments consisting of up to an additional 5,000,000 ordinary shares if the combined company (and its subsidiaries on a consolidated basis) meets certain financial performance targets for the 2019 fiscal year and an additional 5,000,000 ordinary shares if the combined company (and its subsidiaries on a consolidated basis) meets certain financial performance targets for the 2020 fiscal year (the “Earnout Shares”). In the event that a financial performance target is not met for the 2019 fiscal year and/or 2020 fiscal year but the combined company (and its subsidiaries on a consolidated basis) meets certain financial performance targets for the 2019 fiscal year and 2020 fiscal year combined, the Sellers will be entitled to receive any Earnout Shares that they otherwise did not receive (the “Alternative Earnout”).

Pursuant to our Memorandum and Articles of Association, as amended, we are required, in connection with the Business Combination, to provide all holders of ordinary shares (the “public shareholders”) with the opportunity to redeem their ordinary shares for cash through a tender offer pursuant to the tender offer rules promulgated under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our Sponsor and the initial shareholders have agreed to waive their redemption rights with respect to any of their founder shares or public shares, if any, in connection with the consummation of the Business Combination. The Offer is being made to provide the public shareholders with such opportunity to redeem their ordinary shares. See “The Offer — Purpose of the Offer; Certain Effects of the Offer.”

THE OFFER IS CONDITIONED UPON THE SATISFACTION OF THE CLOSING CONDITION (AS FURTHER DESCRIBED IN THIS OFFER TO PURCHASE) AND THE OTHER CONDITIONS SET FORTH IN THIS OFFER TO PURCHASE. SEE “THE OFFER — CONDITIONS OF THE OFFER.”

We will fund the purchase of ordinary shares in the Offer with cash available to us from the Trust Account upon consummation of the Business Combination. As of June 30, 2019, TKK had approximately $141,069 of cash and cash equivalents held outside the Trust Account. As of October 14, 2019, TKK had approximately $256.6 million held in the Trust Account. See “The Offer — Source and Amount of Funds.” The Offer is not conditioned on any minimum number of ordinary shares being tendered. The Offer is, however, subject to certain other conditions, including the Closing Condition. See “The Offer —Purchase of Ordinary Shares and Payment of Purchase Price” and “The Offer — Conditions of the Offer.”

TKK’s ordinary shares are listed on the Nasdaq Capital Market (“Nasdaq”) under the symbol “TKKS”. As of October 14, 2019, the closing price of the ordinary shares was $10.16 per share. Shareholders are urged to obtain current market quotations for the ordinary shares before deciding whether to tender their ordinary shares pursuant to the Offer.

TKK also has outstanding units (the “Units”), each comprised of one ordinary share, one warrant to purchase one-half of an ordinary share (“warrant”) and one right to acquire one-tenth of one ordinary share upon the consummation of a Business Combination (“right”). The Units, warrants and rights are also listed on Nasdaq under the symbols “TKKSU”, “TKKSW” and “TKKSR”, respectively. The Offer is only open for our ordinary shares, and not the other securities included as part of the Units. You may tender ordinary shares that are included in Units, but to do so you must separate the Units into ordinary shares, warrants and rights prior to tendering such ordinary shares. The separation can typically be accomplished within three business days. See “The Offer — Procedures for Tendering Ordinary Shares.”

Our board of directors has (i) approved our making the Offer, (ii) approved the Share Exchange Agreement and (iii) determined that the Business Combination is in the best interests of TKK and, if consummated, the Business Combination would constitute our initial business combination pursuant to our Memorandum and Articles of Association, as amended. If you tender your ordinary shares in the Offer, you will not participate in the Business Combination with respect to such ordinary shares. However, all outstanding warrants of TKK to purchase ordinary shares will remain outstanding and if you hold rights, you will receive 1/10th of one ordinary share following the Business Combination. OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU DO NOT ACCEPT THE OFFER WITH RESPECT TO YOUR ORDINARY SHARES.

Our Sponsor, officers, and certain members of our board of directors will directly benefit from the Business Combination and have interests in the Business Combination that may be different from, or in addition to, the interests of TKK shareholders. See “The Business Combination — Interests of Certain Persons in the Business Combination.”

You must make your own decision as to whether to tender your ordinary shares and, if so, how many ordinary shares to tender. In doing so, you should read carefully the information in this Offer to Purchase and in the Letter of Transmittal, including the purposes and effects of the Offer. See “The Offer — Purpose of the Offer; Certain Effects of the Offer.” You should discuss whether to tender your ordinary shares with your broker, if any, or other financial advisors. See “Risk Factors” for a discussion of risks that you should consider, including risks relating to Glory Star, and the inherent difficulty in obtaining accurate valuations on advertising/e-commerce/media companies such as Glory Star, before participating in the Offer.

Our Sponsor and our initial shareholders have agreed to waive their redemption rights in connection with the Offer with respect to the ordinary shares they own and as such, will not tender any shares they hold to TKK. See “The Offer — Purpose of the Offer; Certain Effects of the Offer” and “The Business Combination — Interests of Certain Persons in the Business Combination.”

The information contained herein concerning Glory Star, its business, and industry has been provided by Glory Star.

Neither the SEC nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this Offer. Any representation to the contrary is a criminal offense.

Questions and requests for assistance regarding the Offer may be directed to Morrow Sodali LLC, as information agent (the “Information Agent”) for the Offer, at the telephone numbers and e-mail address set forth on the back cover of this Offer to Purchase. You may request additional copies of the Offer to Purchase, the Letter of Transmittal, and the other Offer documents, if any, from the Information Agent at the telephone number and e-mail address on the back cover of this Offer to Purchase. You may also contact your broker, dealer, commercial bank, trust company or nominee for copies of these documents.

October 17, 2019

IMPORTANT

If you desire to tender all or any portion of your ordinary shares, you must do one of the following before the Offer expires:

•        if your ordinary shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you must contact the nominee and have the nominee tender your ordinary shares for you;

•        if you hold certificates for ordinary shares registered in your own name, you must complete and sign the appropriate enclosed Letter of Transmittal according to its instructions and deliver it, together with any required signature guarantees, the certificates for your ordinary shares and any other documents required by the Letter of Transmittal, to Continental Stock Transfer & Trust Company;

•        if you are a participant institution of The Depository Trust Company, or DTC, you must tender your ordinary shares according to the procedure for book-entry transfer described in “The Offer — Procedures for Tendering Ordinary Shares” of this Offer to Purchase; or

•        if you are a holder of Units and wish to tender ordinary shares included in such Units, you must separate the Units into ordinary shares, warrants and rights prior to tendering such ordinary shares pursuant to the Offer. For specific instructions regarding separation of Units, you will need to contact your broker and/or see the letter from your broker/nominee, which includes an instruction form for your completion which provides a box to check to request separation of the Units. Accordingly, while we believe that such separation of the Units can typically be accomplished within three business days, no assurance can be given regarding how quickly units can be separated and Unit holders are urged to promptly contact their broker/nominee if they wish to tender the shares underlying their Units. If you fail to cause your ordinary shares to be separated in a timely manner before the Offer expires, you will not be able to validly tender such ordinary shares prior to the expiration of the Offer.

To validly tender ordinary shares pursuant to the Offer, other than ordinary shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you must properly complete and duly execute the Letter of Transmittal and deliver it to us in accordance with the procedures described in Offer to Purchase.

We are not making the Offer to, and will not accept any tendered ordinary shares from, shareholders in any jurisdiction where it would be illegal to do so. However, we may, at our discretion, take any actions necessary for us to comply with the applicable laws and regulations to make the Offer to shareholders in any such jurisdiction.

We have not authorized any person to make any recommendation on our behalf as to whether you should tender your ordinary shares pursuant to the Offer. You should rely only on the information contained in this Offer to Purchase and in the related Letter of Transmittal or other information to which we have referred you. We have not authorized anyone to provide you with information or to make any representation in connection with the Offer other than those contained in this Offer to Purchase or in the related Letter of Transmittal. If anyone makes any recommendation or gives any information or representation regarding the Offer, you must not rely upon that recommendation, information or representation as having been authorized by us, our board of directors, the Depositary or the Information Agent for the Offer. You should not assume that the information provided in this Offer is accurate as of any date other than the date as of which it is shown, or if no date is otherwise indicated, the date of this Offer.

HOW TO OBTAIN ADDITIONAL INFORMATION

This Offer to Purchase incorporates important information about us that is not included or delivered herewith. If you would like to receive additional information or if you want additional copies of this document, the appendices or any other documents we file with the SEC, such information is available without charge upon written or oral request. Please contact the Information Agent for the Offering at:

Morrow Sodali LLC
470 West Avenue — 3rd Floor
Stamford CT 06902
Individuals, please call (800) 662-5200
Banks and brokerage forms, please call (203) 658-9400
Email: TKKS.info@morrowsodali.com

TABLE OF CONTENTS

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CERTAIN DEFINITIONS

Unless otherwise stated or where the context otherwise requires, references in this Offer to Purchase to:

•        “we,” “us,” “our,” the “Company,” or “TKK” means the registrant, TKK Symphony Acquisition Corporation, a Cayman Islands exempted company;

•        “Additional Agreements” means the Registration Rights Agreement, Escrow Agreement, Non-Compete Agreements and Lock-Up Agreement, as contemplated by the Share Exchange Agreement;

•        “Memorandum and Articles of Association” means TKK’s Amended and Restated Memorandum and Articles of Association, as further amended and in effect on the date hereof;

•        “Business Combination” means the acquisition of Glory Star by TKK pursuant to the terms of the Share Exchange Agreement;

•        “Business Combination Deadline” means February 20, 2020 (or until June 20, 2020 if we extend the period of time to consummate a business combination through the issuance of 25,000,000 warrants, each to purchase one-half of an ordinary share, as a dividend to our public shareholders (“potential extension warrants”)), the deadline for consummating TKK’s initial business combination;

•        “Cayman Islands Companies Law” means the Cayman Islands Companies Law (2018 Revision), as amended;

•        “Closing Payment Shares” means the ordinary shares of TKK in an aggregate number equal to $425,000,000 divided by the redemption price, that are to be issued to the Sellers upon the consummation of the Business Combination as consideration therefor;

•        “combined company” means TKK (to be renamed “Glory Star New Media Group Holdings Limited”) and its subsidiaries following the consummation of the Business Combination;

•        “Earnout Shares” means a maximum of 10,000,000 ordinary shares that may be issued to the Sellers if, after the Business Consummation, the combined company meets certain financial performance targets for the 2019 fiscal year and 2020 fiscal year;

•        “Escrow Shares” means 5% of the Closing Payment Shares that are to be deposited into escrow to secure certain indemnification obligations of Glory Star and the Sellers;

•        “Exchange Act” means the United States Securities Exchange Act of 1934, as amended;

•        “founder shares” means the ordinary shares held by the Sponsor and other initial shareholders;

•        “FPI” or “FPI status” means a foreign private issuer as defined by and determined pursuant to Rule 3b-4 under the Exchange Act;

•        “Glory Star” means Glory Star New Media Group Limited, a Cayman Islands exempted company;

•        “Glory Star Group” means Glory Star together with its consolidated subsidiaries and VIEs.

•        “Glory Star Parties” are the VIEs, the WFOE and Glory Star, collectively;

•        “Horgos” means Horgos Glory Star Media Co., Ltd., a limited liability company incorporated in the PRC;

•        “initial public offering” or “IPO” means TKK’s initial public offering of Units at $10.00 per Unit which closed in August 2018;

•        “Nasdaq” means the Nasdaq Capital Market;

•        “PRC” means the People’s Republic of China;

•        “private placement warrants” means the warrants issued to an affiliate of the Sponsor in a private placement in connection with the IPO;

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•        “public rights” and “rights” means the rights sold as part of the units in the IPO (whether they were purchased in the offering or thereafter in the open market); one right entitles the holder thereof to receive one-tenth(1/10) of an ordinary share upon the consummation of an initial business combination

•        “public shareholders” means holders of public shares;

•        “public shares” means the ordinary shares sold as part of the units in the IPO (whether they were purchased in the offering or thereafter in the open market);

•        “public warrants” or “warrants” are to the redeemable warrants sold as part of the units in the IPO (whether they were purchased in the offering or thereafter in the open market); each warrant entitles the holder thereof to purchase one-half of one ordinary share at a price of $5.75 per half share, subject to adjustment;

•        “Purchase Price” means $10.26 per ordinary share or $256,500,000 in aggregate;

•        “Purchaser Representative” means TKK Symphony Sponsor 1, a Cayman Islands exempted company, as representative of the Purchaser;

•        “RMB” refers to Renminbi, the lawful currency of China;

•        “SEC” means the United States Securities and Exchange Commission;

•        “Securities Act” means the United States Securities Act of 1933, as amended;

•        “Seller Representative” means Bing Zhang, as representative of the Sellers;

•        “Sellers” means the shareholders of Glory Star;

•        “Share Exchange” means the acquisition of the shares of Glory Star from the Sellers pursuant to the terms of the Share Exchange Agreement;

•        “Share Exchange Agreement” means the Share Exchange Agreement, dated as of September 6, 2019, as may be amended from time to time, by and among by and among TKK, Glory Star, WFOE, Xing Cui Can, Horgos, each of the Sellers, the Purchaser Representative, and the Seller Representative.

•        “Sponsor” means TKK Symphony Sponsor 1, a Cayman Islands exempted company;

•        “Trust Account” means the segregated account at Continental Stock Transfer and Trust Company, where certain of the proceeds from our IPO and the sale of the private placement warrants were deposited pursuant to an Investment Management Trust Agreement by and between TKK and Continental Stock Transfer & Trust Company, as trustee;

•        “underwriters” means the underwriters of TKK’s IPO;

•        “Units” means the units issued in TKK’s IPO; each Unit comprised of one ordinary share, one warrant and one right (whether they were purchased in the IPO or thereafter in the open market);

•        “VIE Contracts” means certain documents executed by the VIEs, the WFOE, the shareholders of the VIEs and certain other parties thereto as necessary to implement certain contractual arrangements in the PRC, which allow the WFOE to (i) exercise effective control over the VIEs and their subsidiaries, (ii) receive substantially all of the economic benefits of the VIEs and their subsidiaries; and (iii) have an exclusive option to purchase all or part of the equity interests in the VIEs when and to the extent permitted by PRC law;

•        “VIEs” means Xing Cui Can and Horgos, the variable interest entities of Glory Star;

•        “WFOE” means Glory Star New Media (Beijing) Technology Co., Ltd., a wholly foreign-owned enterprise limited liability company and indirectly wholly-owned by Glory Star; and

•        “Xing Cui Can” means Xing Cui Can International Media (Beijing) Co., Ltd., a limited liability company incorporated in the PRC.

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SUMMARY TERM SHEET

This summary term sheet highlights important information regarding the Offer and the Business Combination. To understand the Offer fully and for a more complete description of the terms of the Offer and the Business Combination, you should carefully read this entire Offer to Purchase, including the appendices and documents incorporated by reference, and the Letter of Transmittal. We have included references to the sections of this Offer to Purchase where you will find a more complete description of the topics addressed in this summary term sheet.

For further information regarding the Offer, see “Questions and Answers About the Offer” beginning on page 4 and “The Offer” beginning on page 106.

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QUESTIONS AND ANSWERS ABOUT THE OFFER

General

Q.     What is the background of TKK Symphony Acquisition Corporation?

A:     We are a blank check company incorporated in the Cayman Islands on February5, 2018. We were incorporated for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities. We are not limited to a particular industry or geographic region for purposes of consummating an initial business combination. On August 20, 2018, we consummated an IPO of 22,000,000 Units, generating total gross proceeds of $220,000,000. Simultaneously with the closing of the IPO, we consummated the sale of an aggregate of 11,800,000 private placement warrants at a price of $0.50 per warrant in a private placement to Symphony Holdings Limited (“Symphony”), generating total gross proceeds of $5,900,000. Following the closing of our IPO on August 20, 2018, $220,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the private placement warrants was placed in a Trust Account pending our completion of an initial business combination. On August 22, 2018, in connection with the underwriters’ partial exercise of their over-allotment option, we consummated the sale of an additional 3,000,000 Units at $10.00 per Unit and the sale of an additional 1,200,000 private placement warrants at $0.50 per private placement warrant, generating total gross proceeds of $30,600,000. A total of $30,000,000 of the net proceeds was deposited in the Trust Account, increasing the aggregate proceeds held in the Trust Account to $250,000,000.

On September 12, 2018, the ordinary shares, warrants and rights underlying the Units sold in the IPO began to trade separately.

If we do not consummate an initial business combination by the Business Combination Deadline, it will trigger our automatic winding up, liquidation and dissolution pursuant to the terms of our Memorandum and Articles of Association.

Q.     Who is Glory Star?

A:     Through its subsidiaries and VIEs, Glory Star provides advertisement and content production services, and operates a leading mobile and online advertising, digital media, and entertainment business in China, and is building one of the leading e-commerce platforms in China through its mobile app called 悦享视频 App (“CHEERS App”) that allows its users to access its online store (e-Mall), video content, live streaming, and online games. Glory Star is a Cayman Islands company with its primary business address at F22, Xinhua Technology Building, No. 8 Tuofangying Road, Jiangtai, Chaoyang District, Beijing, People’s Republic of China. Glory Star commenced operations in 2016.

Q.     Who is offering to purchase TKK’s ordinary shares?

A:     TKK is offering to purchase its ordinary shares.

Q.     What securities are sought?

A.     TKK is offering to purchase up to all of its outstanding ordinary shares validly tendered and not properly withdrawn pursuant to the Offer. TKK’s Sponsor and its initial shareholders have agreed to waive their redemption rights with respect to any of their founder shares or public shares, if any, in connection with the consummation of the Business Combination. If you support the proposed Business Combination, you should not tender your ordinary shares pursuant to the Offer, because ordinary shares purchased by TKK pursuant to the Offer will cease to represent an interest in the continuing company following the Business Combination. However, even if you tender your ordinary shares pursuant to the Offer, all outstanding warrants to purchase ordinary shares will remain outstanding, and each outstanding right will be automatically converted into one-tenth (1/10) of an ordinary share upon consummation of the Business Combination.

Q.     Why are we making the Offer?

A.     Pursuant to our Memorandum and Articles of Association, we are required, in connection with the Business Combination, to provide all holders of our ordinary shares with the opportunity to redeem their ordinary shares for their pro rata share of our Trust Account (net of taxes payable). The Offer is being made to provide our

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shareholders with such opportunity to redeem their ordinary shares. Our Sponsor and the initial shareholders have agreed to waive such redemption rights with respect to any ordinary shares they have acquired. See “The Offer — Purpose of the Offer; Certain Effects of the Offer.”

Promptly following the scheduled Expiration Date, we will publicly announce whether the offer conditions have been satisfied or waived (as applicable) and whether the Offer has been completed, extended or terminated. If such offer conditions are satisfied or waived (as applicable), promptly after the Expiration Date and substantially contemporaneously with the completion of the Business Combination, we shall purchase and pay the Purchase Price for each ordinary share validly tendered and not properly withdrawn. Public shareholders who have redeemed their shares will also be entitled to receive a pro rata portion of the additional accrued interest, if any, remaining in the Trust Account, which we expect to be nominal.

Q.     Why is the Offer for 25,000,000 ordinary shares?

A.     Pursuant to our Memorandum and Articles of Association, we are required, in connection with the Business Combination, to provide all holders of our shares with the opportunity to redeem their ordinary shares through a tender offer pursuant to the tender offer rules promulgated under the Exchange Act. The Offer is being made to provide our shareholders with such opportunity to redeem their ordinary shares in connection with consideration of the Business Combination. The Sponsor and the initial shareholders of TKK have agreed to waive their redemption rights with respect to any of their founder shares or public shares, if any, in connection with the consummation of the Business Combination. See “The Offer — Purpose of the Offer; Certain Effects of the Offer.”

Q.     What if the conditions to the Offer are not satisfied?

A.     Our obligation to purchase ordinary shares validly tendered and not properly withdrawn at the Expiration Date is conditioned upon, among other things, the satisfaction of the Closing Condition. If we are unable to satisfy the Closing Condition, we may amend, terminate or extend the Offer. If we terminate the Offer, we will NOT: (i) purchase any ordinary shares pursuant to the Offer or (ii) consummate the Business Combination in accordance with the terms of the Share Exchange Agreement. Ordinary shares tendered pursuant to the Offer but not purchased by us in the Offer will be returned at our expense promptly following the expiration of the Offer.

If we do not consummate the Business Combination on or before February 20, 2020 (or until June 20, 2020 if we extend the period of time to consummate a business combination through the issuance of 25,000,000 potential extension warrants), we will terminate the Offer unless we find an alternative deal and will commence winding up of our affairs and will liquidate without completing a business combination. See “The Offer — General” and “The Offer — Purchase Price.”

Q.     What will be the purchase price for the ordinary shares and what will be the form of payment?

A.     The Purchase Price for the Offer is $10.26 per ordinary share, which amount represents the amount that was on deposit as of October 14, 2019, in the Trust Account initially established to hold the proceeds of our IPO net of taxes payable, divided by the 25,000,000 ordinary shares sold in the IPO. All ordinary shares we purchase will be purchased at the Purchase Price. Public shareholders who have redeemed their shares will also be entitled to receive a pro rata portion of the additional accrued interest, if any, remaining in the Trust Account, which we expect to be nominal. See “The Offer — General” and “The Offer — Purchase Price.” If your ordinary shares are purchased in the Offer, you will be paid the Purchase Price in cash promptly after the Expiration Date.

Q.     Has TKK or its board of directors adopted a position on the Offer?

A.     Our board of directors has (i) approved our making this Offer, (ii) approved the Share Exchange Agreement and (iii) determined that the Business Combination is in the best interests of TKK and, if consummated would constitute the initial business combination pursuant to our Memorandum and Articles of Association. If the Closing Condition is not satisfied, we will be unable to consummate the Business Combination. If you support the proposed Business Combination, you should not tender your ordinary shares pursuant to the Offer, because ordinary shares purchased pursuant to the Offer will cease to represent an interest in the continuing company following the Business Combination. However, even if you tender your ordinary shares pursuant to the Offer, all outstanding warrants to purchase ordinary shares will remain outstanding, and each outstanding right of TKK will be automatically converted into one-tenth (1/10) of an ordinary share. OUR BOARD OF DIRECTORS

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UNANIMOUSLY RECOMMENDS THAT YOU DO NOT ACCEPT THE OFFER WITH RESPECT TO YOUR ORDINARY SHARES. You must make your own decision as to whether to tender your ordinary shares and, if so, how many to tender. In doing so, you should read carefully the information in this Offer to Purchase and in the Letter of Transmittal, including the purpose and effects of the Offer.

The Business Combination

Q.     Is there a Share Exchange Agreement related to the Offer?

A.     Yes. On September 6, 2019, TKK, Glory Star and other parties entered into the Share Exchange Agreement, pursuant to which, among other things and subject to the terms and conditions contained in the Share Exchange Agreement, TKK will acquire all the issued and outstanding shares of Glory Star and Glory Star will become a wholly owned subsidiary of TKK. On the Closing of the Business Combination, TKK will change its name to “Glory Star New Media Group Holdings Limited.”

Q.     What is the structure of the Business Combination and the Exchange Consideration?

A.     Upon the closing of the Business Combination, TKK will acquire from the Sellers all of the outstanding shares of Glory Star. The Sellers will receive an aggregate number of ordinary shares equal to $425,000,000 divided by the redemption price (or 41,423,002 ordinary shares assuming a redemption price of $10.26 per share), 5% of which (or 2,071,150 Escrow Shares assuming a redemption price of $10.26 per share) will be deposited into escrow to secure certain indemnification obligations. The Sellers will also be entitled to receive up to 10 million additional ordinary shares if we meet certain financial performance targets for the 2019 and 2020 fiscal years. The Share Exchange Agreement is based on an equity valuation of Glory Star of $425,000,000 with the right to earn up to 10,000,000 Earnout Shares. TKK has entered into a Registration Rights Agreement with the Sponsor and the Sellers pursuant to which TKK will grant certain registration rights to the Sellers with respect to the registration of the Closing Payment Shares and Earnout Shares. TKK expects that the Sellers will seek to have their shares in TKK registered for resale under the Registration Rights Agreement promptly following the closing of the Business Combination.

Approximately $256.6 million was held in the Trust Account as of October 14, 2019. As further required by the terms of the Share Exchange Agreement, we cannot consummate the Business Combination unless we retain an amount of net tangible assets of no less than $5,000,001 upon consummation of a Business Combination, after giving effect to the completion of the Redemption and any private placement financing and including the consolidated net tangible assets of Glory Star Group.

Q.     What will be the ownership and organizational structure of TKK after consummation of the Business Combination?

A.      After the Business Combination, assuming no redemptions of public shares for cash in the Offer and a $10.26 redemption price, TKK’s current public shareholders will own approximately 36.49% of TKK, while TKK’s current directors, officers and initial shareholders, including the Sponsor, and EarlyBirdCapital, will collectively own approximately 8.56% of TKK, and the pre-Business Combination Sellers will own approximately 54.95% of the combined company. Assuming redemption by holders of all of the outstanding public shares in the Offer and a $10.26 redemption price, TKK’s current public shareholders will own 4.96% of TKK, TKK’s current directors, officers and initial shareholders, including the Sponsor, and EarlyBirdCapital, will own approximately 12.81% of TKK, and the Sellers will own approximately 82.23% of TKK.

Additionally, immediately following the consummation of the Business Combination, the board of directors of TKK is expected to be composed of five directors. Glory Star will have the right to designate four directors, at least two of whom must satisfy applicable independent director requirements and TKK will have the right to designate one director who must satisfy applicable independent director requirements. It is anticipated that Mr. Bing Zhang will be appointed as Chairman and Mr. Sing Wang will be the TKK’s representative to the board, with the remaining three proposed members to the board to be determined.

Q.     Will there be a single controlling shareholder following the completion of the Business Combination?

A.     Yes. The ownership of ordinary shares following the consummation of the Business Combination will depend on the number of ordinary shares that are validly tendered, not validly withdrawn and accepted for payment pursuant to the Offer. Assuming that 75,373,002 ordinary shares are outstanding upon consummation of the

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Business Combination and that no ordinary shares have been redeemed and a $10.26 redemption price, Bing Zhang will beneficially own in the aggregate approximately 20.30% of the outstanding ordinary shares. See “Principal Shareholders” for more information regarding the beneficial ownership of TKK following the Business Combination.

Q.     What assumptions have we made when disclosing ownership information?

A.     We have made several assumptions with respect to ownership of ordinary shares following the consummation of the Business Combination. These assumptions impact certain calculations of post-transaction ownership and voting rights throughout this Offer to Purchase. Unless otherwise expressly stated, all such calculations relating to beneficial ownership and voting rights post-BusinessCombination assume: (i) that no ordinary shares are validly tendered pursuant to the Offer; and (ii) the issuance of 41,423,002 ordinary shares as consideration to the Sellers in connection with the Business Combination assuming a redemption price of $10.26 per share (excluding any Earnout Shares) and treating the Escrow Shares as fully owned by the Sellers.

Q.     Are there other agreements that will be entered into in connection with the Business Combination?

A.     Yes. In addition to the Share Exchange Agreement, the following agreements have been or will be executed in connection with the Business Combination:

•        Registration Rights Agreement.    TKK entered into a Registration Rights Agreement with the Purchaser Representative and the Sellers pursuant to which TKK shall grant each Seller certain registration rights with respect to the registration of the Closing Payment Shares and Earnout Shares.

•        Escrow Agreement.    TKK and the Seller Representative will enter into an agreement to deposit 5% of the Closing Payment Shares into escrow to be set aside to secure certain indemnification obligations of Glory Star and the Sellers pursuant to the Share Exchange Agreement.

•        Lock-Up Agreements.    TKK, the Purchaser Representative and certain Sellers that directly or indirectly own in excess of 10% of Glory Star’s equity prior to the consummation of the Business Combination also entered into Lock-Up Agreements with respect to their Exchange Shares (including Escrow Shares) and Earnout Shares.

•        Non-Competition and Non-Solicitation Agreement.    TKK, the Purchaser Representative, Glory Star and certain Sellers that directly or indirectly own in excess of 30% of Glory Star’s equity prior to the Closing (including Glory Star’s chairman) and their principal also entered into Non-Competition and Non- Solicitation Agreements in favor of TKK, Glory Star and their respective successors, affiliates and subsidiaries and variable interest entities relating to the post-Closing company’s business.

Q.     Are the Offer and the Business Combination conditioned on one another?

A.     Yes. Pursuant to the terms of the Share Exchange Agreement, it is a condition to the consummation of the Business Combination that the Offer is conducted in accordance with the terms of the Share Exchange Agreement, and, pursuant to the terms of this Offer to Purchase, the Offer is subject to the condition that the Closing Condition (as described below) is satisfied, among other conditions. If the Closing Condition is not satisfied by the Expiration Date, we will terminate or extend the Offer. In the event the Offer is terminated, we will promptly return any ordinary shares, at our expense, that were delivered pursuant to the Offer upon the expiration or termination of the Offer and we will not consummate the Business Combination. If we do not consummate the Business Combination on or before February 20, 2020 (or until June 20, 2020 if we extend the period of time to consummate a business combination through the issuance of 25,000,000 potential extension warrants), we will terminate the Offer and will commence winding up of our affairs and will liquidate without completing a business combination. See “The Share Exchange Agreement.”

Q.     What are the most significant conditions to the Offer?

A.     Our obligation to purchase ordinary shares validly tendered and not properly withdrawn at the Expiration Date is conditioned upon satisfaction of the Closing Condition.

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Q.     What are the most significant conditions to the Business Combination?

A.     General Conditions

Consummation of the Business Combination is conditioned on the satisfaction of each of the following conditions, among others:

•        the election or appointment of members to TKK’s board of directors as described above;

•        TKK (together with the Glory Star Group) having at least $5,000,001 in net tangible assets upon consummation of a Business Combination, after giving effect to the completion of the Redemption and any private placement financing; and

•        TKK’s ordinary shares continue to be listed on Nasdaq immediately following the Closing and TKK has at least 300 round-lot shareholders.

Conditions to Obligations of TKK

The obligations of TKK to consummate the Business Combination are subject to the satisfaction or waiver of certain conditions, including the following conditions, among others:

•        TKK shall have received employment agreements in form and substance reasonably acceptable to TKK and Glory Star between certain individuals and either TKK or a Glory Star Group company, executed by the parties thereto;

•        TKK shall have received the Escrow Agreement, the duly executed VIE Contracts and evidence that certain contracts involving Glory Star Group companies and/or any of the Sellers or other related persons have been terminated with no further liability of Glory Star Group thereunder; and

•        each of the Non-Competition Agreement, the Lock-Up Agreement and the Registration Rights Agreement being in full force and effect in accordance with its terms as of the Closing.

Conditions to Obligations of the Sellers

The obligations of the Sellers to consummate the Business Combination are subject to the satisfaction or waiver of certain conditions, including the following conditions, among others:

•        Glory Star shall have received the Escrow Agreement, duly executed by TKK, the Purchaser Representative and the Escrow Agent; and

•        each of the Non-Competition Agreement, the Lock-Up Agreement and the Registration Rights Agreement being in full force and effect in accordance with its terms as of the Closing.

Additionally, Glory Star has a termination right if TKK does not have sufficient funds available at the Closing, after giving effect to the Offer, but excluding Glory Star Group’s cash to pay certain amounts owed to the underwriters of its initial public offering.

If any of the conditions to the Business Combination are not satisfied, TKK or the Sellers, as applicable, may choose to exercise any applicable right to terminate the Share Exchange Agreement. See “Risk Factors — Risks Relating to the Consummation of the Business Combination” and “The Share Exchange Agreement — Conditions to Closing of the Business Combination.” We refer to the conditions to the Offer and the Business Combination, as the “offer conditions.” See “The Share Exchange Agreement — Conditions to Closing of the Business Combination” and “The Offer — Conditions of the Offer.”

Q.     What interests do our directors, executive officers, and Sponsor have in the Business Combination?

A.     Our Sponsor and certain of TKK’s directors and officers have interests in the Business Combination that may be different from, or in addition to, the interests of TKK’s shareholders. If the Business Combination is not completed by the Business Combination Deadline, TKK will be required to liquidate following distribution of the amounts in the Trust Account. In such event, there will be no distribution from the Trust Account with respect

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to the 6,250,000 ordinary shares held by the Sponsor and other initial shareholders or the 13,000,000 private placement warrants held by Symphony, which would expire worthless. Certain of TKK’s directors and executive officers are affiliated with the Sponsor.

Unless TKK consummates the Business Combination, its officers, directors and their respective affiliates will not receive reimbursement for any out-of-pocket expenses incurred by them to the extent that such expenses exceeded the amount of its working capital. As a result, the financial interest of TKK’s officers, directors and their respective affiliates could influence their motivation in pursuing Glory Star as a target and therefore there may be a conflict of interest when determining whether the Business Combination is in TKK’s shareholders’ best interests.

In addition, an affiliate of the Sponsor has contractually agreed that, if TKK liquidates prior to the consummation of a business combination, it will be liable to ensure that the proceeds in the Trust Account are not reduced below $10.00 per share by the claims of target businesses or claims of vendors or other entities that are owed money by TKK for services rendered or contracted for or products sold to it. In addition, the Sponsor has provided loans to us in the aggregate amount of $350,000 as of June 30, 2019, and we expect that the Sponsor will provide additional loans to us prior to the Business Combination Deadline, which loans are repayable only upon the consummation of a business combination. Therefore, the Sponsor has a financial interest in consummating any business combination, thereby resulting in a potential conflict of interest. The Sponsor or its affiliates could influence TKK’s officers’ and directors’ motivation in pursuing Glory Star as a target and therefore there may be a conflict of interest when the directors and officers determine whether the Business Combination is in TKK’s shareholders’ best interests.

If the Business Combination with Glory Star is completed, the board of directors of TKK is expected to be composed of five directors. The Sellers will have the right to designate four directors and TKK will have the right to designate one director. Three of the directors must satisfy applicable independent director requirements.

The exercise of TKK’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the transaction may result in a conflict of interest when determining whether such changes or waivers are appropriate and in best interests of TKK’s shareholders.

The Offer

Q.     How will TKK fund the payment for the ordinary shares?

A.     We will use funds on deposit in the Trust Account to purchase the ordinary shares of redeeming shareholders. See “The Offer — Source and Amount of Funds,” “The Offer — Purpose of the Offer; Certain Effects of the Offer” and “The Share Exchange Agreement.” The Purchase Price for the Offer is $10.26 per ordinary share, which amount represents the amount that was on deposit as of October 14, 2019, in the Trust Account initially established to hold the proceeds of our IPO net of taxes payable, divided by the 25,000,000 ordinary shares sold in the IPO. Public shareholders who have redeemed their shares will also be entitled to receive a pro rata portion of the additional accrued interest, if any, remaining in the Trust Account, which we expect to be nominal. At October 14, 2019, the balance in our Trust Account was approximately $256.6 million.

Q.     How long do I have to tender my ordinary shares?

A.     The Offer will expire on November 15, 2019 at 5:00p.m., New York City time, unless we extend or terminate the Offer. You may tender your ordinary shares pursuant to the Offer until the Offer expires on the Expiration Date. Consistent with the terms of the Offer, we may extend the Offer depending on whether the conditions to the Business Combination have been satisfied and the timing and process of the SEC’s review of the Offer to Purchase and related materials and for other reasons. See “The Offer — General,” “The Offer — Purchase Price,” and “The Offer — Extension of the Offer; Termination; Amendment.” If a broker, dealer, commercial bank, trust company or other nominee holds your ordinary shares, it is likely the nominee has established an earlier deadline for you to act to instruct the nominee to accept the Offer on your behalf. We urge you to contact your broker, dealer, commercial bank, trust company or other nominee to find out the nominee’s deadline. See “The Offer — Procedures for Tendering Ordinary Shares.”

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Q.     Can the Offer be extended, amended or terminated and, if so, under what circumstances?

A.     We may extend or amend the Offer to the extent we determine such extension or amendment is necessary or is required by applicable law, rule or regulation, subject to certain restrictions in our Memorandum and Articles of Association and the Share Exchange Agreement. If we extend the Offer, we will delay the acceptance of any ordinary shares that have been validly tendered and not properly withdrawn pursuant to the Offer. We can also terminate the Offer if any of the offer conditions listed in “The Offer — Conditions of the Offer” are not satisfied, and the satisfaction thereof has not been waived. See “The Offer — Extension of the Offer; Termination; Amendment.”

Q.     How will I be notified if the Offer is extended or amended?

A.     If the Offer is extended, we will make a public announcement of the extension no later than 9:00 a.m., New York City time, on the first business day after the previously scheduled Expiration Date. We will announce any amendment to the Offer by making a public announcement of the amendment. See “The Offer — Extension of the Offer; Termination; Amendment.”

Q.     How do I tender my ordinary shares?

A.     If you hold your ordinary shares in your own name as a holder of record and decide to tender your ordinary shares, you must deliver your ordinary shares by mail or physical delivery and deliver a completed and signed Letter of Transmittal or an Agent’s Message (as defined in “The Offer — Procedures for Tendering Ordinary Shares”) to Continental Stock Transfer & Trust Company (the “Depositary”) before 5:00 p.m., New York City time, on November 15, 2019 or such later time and date to which we may extend the Offer.

If you hold your ordinary shares in a brokerage account or otherwise through a broker, dealer, commercial bank, trust company or other nominee (i.e., in “street name”), you must contact your broker or other nominee if you wish to tender your ordinary shares. See “The Offer — Procedures for Tendering Ordinary Shares” and the instructions to the Letter of Transmittal.

If you are a participant institution of The Depository Trust Company (“DTC”), you must tender your ordinary shares, according to the procedure for book-entrytransfer described in “The Offer — Procedures for Tendering Ordinary Shares” of this Offer to Purchase.

You may contact Morrow Sodali LLC (the “Information Agent”) or your broker for assistance. The telephone numbers and e-mail address for the Information Agent are set forth on the back cover of this Offer to Purchase. See “The Offer — Procedures for Tendering Ordinary Shares” and the instructions to the Letter of Transmittal.

Q.     Can I tender my Units in the Offer?

A.     No. The Offer is only being made for our ordinary shares. If any or all of your ordinary shares are held as part of a Unit and you wish to tender the ordinary shares included in such Units, you will need to separate the Unit into its component pieces prior to exercising your redemption rights with respect to the ordinary shares in the Offer and undertake all actions necessary to allow for tender of the separated shares. For specific instructions regarding separation of Units, you will need to contact your broker and/or see the letter from your broker/nominee, which includes an instruction form for your completion which provides a box to check to request separation of the Units. The voluntary separation of the Units occurs through the facilities of the DTC and is subject to the procedures of DTC and the various broker/nominees who hold their positions through DTC. Accordingly, while we believe that such separation of the Units can typically be accomplished within three business days, no assurance can be given regarding how quickly units can be separated and Unit holders are urged to promptly contact their broker/nominee if they wish to tender the shares underlying their Units. If you fail to cause your ordinary shares to be separated in a timely manner before the Offer expires, you will not be able to validly tender such ordinary shares prior to the expiration of the Offer.

Q.     Can I tender my warrants or rights in the Offer?

A.     No. The Offer is only being made for our ordinary shares. We are not offering to purchase our warrants or rights in the Offer. Furthermore, our warrants are not exercisable until the consummation of an initial business combination and therefore a warrant holder will not be able to exercise his, her or its warrants to purchase

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ordinary shares and then tender the ordinary shares pursuant to the Offer. In addition, the rights will not convert into one-tenth (1/10) of an ordinary share until the consummation of an initial business combination.

Q.     Until what time can I withdraw previously tendered ordinary shares?

A.     You may withdraw your tendered ordinary shares at any time prior 5:00 p.m., New York City time, on November 15, 2019 or such later time and date to which we may extend the Offer. In addition, unless we have already accepted your tendered ordinary shares for payment, you may withdraw your tendered ordinary shares at any time after 5:00 p.m., New York City time, on November 15, 2019. See “The Offer — Withdrawal Rights.”

Q.     How do I properly withdraw ordinary shares previously tendered?

A.     You must deliver, on a timely basis, a written notice of your withdrawal to the Depositary at the address appearing on the back cover page of this Offer in order to properly withdraw your ordinary shares. Your notice of withdrawal must specify your name, the number of ordinary shares to be withdrawn and the name of the registered holder of such ordinary shares. Certain additional requirements apply if the certificates for ordinary shares to be withdrawn have been delivered to the Depositary or if your ordinary shares have been tendered under the procedure for book-entry transfer set forth in “The Offer — Procedures for Tendering Ordinary Shares.” See “The Offer — Withdrawal Rights.”

Q.     When will TKK pay for the ordinary shares I tender that are accepted for purchase?

A.     We will pay the Purchase Price in cash for the ordinary shares we purchase promptly, and in any event concurrently with the consummation of the Business Combination, after (i) the expiration of the Offer if the offer conditions are satisfied or waived (as applicable), and (ii) our acceptance of the ordinary shares for payment. We will pay for the ordinary shares accepted for purchase by depositing the aggregate Purchase Price with the Depositary promptly after the expiration of the Offer provided that the offer conditions are met. The Depositary will act as your agent and will transmit to you the payment for all of your ordinary shares accepted for payment. See “The Offer — Purchase of Ordinary Shares and Payment of Purchase Price.”

Q.     Will I have to pay brokerage fees and commissions if I tender my ordinary shares?

A.     If you are a holder of record of your ordinary shares and you tender your ordinary shares directly to the Depositary, you will not incur any brokerage fees or commissions. If you hold your ordinary shares in street name through a broker, bank or other nominee and your broker tenders ordinary shares on your behalf, your broker may charge you a fee for doing so. You should consult your broker or nominee to determine whether any charges will apply. See “The Offer — Procedures for Tendering Ordinary Shares.”

Q.     What are the U.S. federal income tax consequences if I tender my ordinary shares?

A.     The receipt of cash for your tendered ordinary shares will generally be treated for U.S. federal income tax purposes either as a sale or exchange transaction or as a distribution. Because we are a PFIC (defined below), beneficial owners of ordinary shares should review “Material U.S. Federal Income Tax Consequences” below and are urged to consult their personal tax advisors with respect to the tax implication of a potential tender of shares pursuant to this Offer.

Q.     Will I have to pay stock transfer tax if I tender my ordinary shares?

A.     We will not pay any stock transfer taxes in connection with this Offer. If you instruct the Depositary in the Letter of Transmittal to make the payment for the ordinary shares to anyone other than the registered holder, you may incur a stock transfer tax. See “The Offer — Purchase of Ordinary Shares and Payment of Purchase Price.”

Q.     Whom do I contact if I have questions about the Offer?

A.     For information or assistance, you may contact the Information Agent at the telephone numbers and e-mail address set forth on the back cover of this Offer to Purchase. You may request additional copies of the Offer to Purchase, the Letter of Transmittal and other related documents from the Information Agent at: (800) 662-5200. Banks and brokers can call collect at (203) 658-9400.

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Q.     How will the Offer affect the number of ordinary shares outstanding and the number of our shareholders?

A.     As of October 14, 2019, we had an aggregate of 31,450,000 ordinary shares outstanding. In addition, we had outstanding warrants (including warrants included in Units) to acquire 19,000,000 ordinary shares at an exercise price of $11.50 per whole share.

If no ordinary shares are tendered in this Offer, and prior to the completion of the Business Combination, the total number of our outstanding ordinary shares will not change (we will have 31,450,000 ordinary shares outstanding). If the Offer is fully subscribed, following our purchase of the ordinary shares tendered pursuant to this Offer, and prior to the completion of the Business Combination, we will have 6,450,000 ordinary shares outstanding. However, our Sponsor and our initial shareholders have agreed not to tender any shares that they own in this Offer. Warrants and rights are not subject to the Offer and therefore the respective number of warrants and rights outstanding will not be affected by the Offer. See “The Offer — Purpose of the Offer; Certain Effects of the Offer,” “The Offer —Source and Amount of Funds” and “Principal Shareholders.”

To the extent any of our shareholders validly tender their ordinary shares (without subsequently properly withdrawing such tendered ordinary shares) and that tender is accepted by us, the number of our holders would be reduced. See “The Offer — Purpose of the Offer; Certain Effects of the Offer,” and “Source and Amount of Funds.”

Q.     Is there a limit on the total number of ordinary shares that may be tendered?

A.     Our Memorandum and Articles of Association provide that we may not redeem our ordinary shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of a Business Combination, after giving effect to the completion of the Redemption and any private placement financing. Other than this limitation, our Memorandum and Articles of Association do not provide a specified maximum redemption threshold. In addition, as a result of the Business Combination being consummated concurrently with the redemption of ordinary shares in the Offer, we will have in excess of $5,000,001 in net tangible assets when combined with the net tangible assets of the Glory Star Group, even if all ordinary shareholders tender their shares. As such, there is no effective limitation on the number of outstanding shares held by our public shareholders that may be redeemed in order to close the Business Combination.

Q.     What will happen if I do not tender my ordinary shares?

A.     Shareholders who choose not to tender their ordinary shares will retain their ordinary shares and participate in the Business Combination.

Continuing shareholders that do not tender their ordinary shares will also be subject to several other risks including:

•        reduced public float and therefore reduced liquidity;

•        the ordinary shares could be delisted from Nasdaq if we do not meet applicable requirements;

•        share price declines; and

•        risks related to the operation of Glory Star Group’s business following the consummation of the Business Combination.

See “Description of TKK’s Securities and Material Differences in the Rights of Shareholders Following the Business Combination.”

Q.     If I object to the price being offered for my ordinary shares, will I have appraisal rights?

A.     No appraisal rights will be available to you in connection with the Offer. See “The Offer — Appraisal Rights.”

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RISK FACTORS

You should carefully consider the following risk factors in addition to the other information included or incorporated by reference in this Offer to Purchase, including matters addressed in the section entitled “Forward-Looking Statements” before you decide whether to tender ordinary shares in this Offer. We caution you not to place undue reliance on the forward-looking statements contained in this Offer, which speak only as of the date hereof.

Risks Relating to Glory Star Group’s Business and Industry

There are many risks and uncertainties that may affect Glory Star Group’s operations, performance, development and results. Many of these risks are beyond Glory Star’s control. The following is a description of the important risk factors that may affect Glory Star Group’s business. If any of these risks were to actually occur, Glory Star Group’s business, financial condition or results of operations could be materially adversely affected. Additional risks and uncertainties not currently known to Glory Star Group or that Glory Star Group currently considers to be immaterial may also materially adversely affect its business, financial condition or results of operations.

If Glory Star Group fails to anticipate user preferences and provide high-quality content, especially popular original content, in a cost-effective manner, it may not be able to attract and retain users to remain competitive.

Glory Star Group’s success depends on its ability to maintain and grow users and user time spent on its CHEERS App. To attract and retain users and compete against its competitors, Glory Star Group must continue to offer high-quality content, especially popular original content that provides its users with a superior online entertainment experience. To this end, Glory Star Group must continue to produce new original content and source new talent and producers in a cost effective manner. Given that it operates in a rapidly evolving industry, Glory Star Group must anticipate user preferences and industry trends and respond to such trends in a timely and effective manner. If Glory Star Group fails to fulfill the needs and preferences of its users in order to deliver a superior user experience or control its costs in doing so, it may suffer from reduced user traffic, and its business, financial condition and results of operations may be materially and adversely affected.

Glory Star Group currently relies on its in-house team of employees to generate creative ideas for original content and to supervise the original content origination and production process and intends to continue to invest its human and capital resources in such content production. Glory Star Group faces fierce competition for qualified personnel in a limited pool of high-quality creative talent. If it is not able to compete effectively for highly qualified personnel or attract and retain top talent at reasonable costs, its original content production capabilities would be materially and adversely impacted. If Glory Star Group is unable to offer popular original content that addresses its user’s tastes and preferences in a cost effective manner, it may suffer a reduction in user traffic and its business, financial condition and results of operations may be materially and adversely affected.

Glory Star Group operates in a capital intensive industry and requires a significant amount of cash to fund its operations and to produce or acquire high quality video content. If it fails to obtain sufficient capital to fund its operations, its business, financial condition and future prospects may be materially and adversely affected.

The operation of an internet video streaming content provider and producer of television shows requires significant and continuous investment in content production or acquisition and video production technology. Producing high-quality original content is costly and time-consuming and typically requires a long period of time in order to realize a returns on investment, if at all. If Glory Star Group cannot obtain adequate capital to meet its capital needs, it may not be able to fully execute its strategic plans for growth and its business, financial condition and prospects may be materially and adversely affected. Glory Star anticipates it will need approximately $75 million to support its working capital needs in the next twelve (12) months. Even though Glory Star Group has recognized net income for the years ended December 31, 2017 and 2018, historically Glory Star Group has funded its working capital requirements through profits, bank loans and private placement of capital raise. As of June 30, 2019, Glory Star Group had approximately $38.2 million in working capital.

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If Glory Star Group’s efforts to retain users and attract new users for its mobile andon-line video content and e-commerce products are not successful, its business, financial condition and results of operations will be materially and adversely affected.

In addition to its content production for television shows, Glory Star Group has experienced significant user growth for its mobile and on-line video and e-commerceproducts over the past several years. Glory Star Group’s ability to continue to retain users and attract new users will depend in part on its ability to consistently provide its users with compelling content choices, as well as a quality experience for selecting and viewing video content. If Glory Star Group introduces new features or service offerings, or change the mix of existing features and services offerings, in a manner that is not favorably received by its users, it may not be able to attract and retain users and its business, financial condition and results of operations would be materially and adversely affected.

If Glory Star Group fails to retain existing or attract new advertising customers to advertise within its mobile and online video content or on its e-commerce platform, maintain and increase its wallet share of advertising budget, or if it is unable to collect accounts receivable in a timely manner, its business, financial condition and results of operations may be materially and adversely affected.

Glory Star Group generates a substantial part of its revenues from advertising placed within its mobile and online video content and on its e-commerce platform. With the launch of its e-Mall in 2019, Glory Star Group anticipates that although mobile and online advertising revenue as a percentage of its total revenues is expected to decreased due to the fast growth in revenues generated in its e-Mall, its mobile and online advertising business is still growing and remains one of its largest sources of revenue. However, because its advertising customers are not under long term contracts, Glory Star Group may not be able to retain its advertising customers in the future, attract new advertising customers continuously or be able to retain its advertising customers at all. If its advertising customers find that they can generate better returns elsewhere, or if Glory Star Group’s competitors provide better online advertising services to suit the advertising customers’ goals, Glory Star Group may lose some or all of its advertising customers. In addition, third parties may develop and use certain technologies to block the display of online advertisements, and should this occur Glory Star Group’s members will be able to skip the viewing of its advertising customers’ advertisements, which may in turn cause Glory Star Group to lose advertising customers. If Glory Star Group’s advertising customers determine that their expenditures on internet video streaming platforms or its video content does not generate expected returns, they may allocate a portion or all of their advertising budgets to other advertising channels such as television, newspapers and magazines or other internet channels such as e-commerce and social media platforms, and reduce or discontinue business with us. Since most of Glory Star Group’s advertising customers are not bound by long-term contracts, they may easily reduce or discontinue advertising arrangements without incurring material liabilities. Failure to retain existing advertising customers or attract new advertising customers to advertise within the video content produced by us or on our e-commerce platform may materially and adversely affect Glory Star Group’s business, financial conditions and results of operations.

Glory Star Group’s brand advertising customers typically enter into advertising agreements through various third-party advertising agencies. In China’s advertising industry, advertising agencies typically have good relationships and maintain longer periods of cooperation with the brand advertising customers they represent. In addition to entering into advertising contracts directly with advertising customers, Glory Star Group also enters into advertising contracts with third-party advertising agencies, which represent advertising customers, even if Glory Star Group has direct contact with such advertisers. As a result, it relies on third-party advertising agencies for sales to, and collection of payment from, its brand advertisers. The financial soundness of its advertising customers and advertising agencies may affect its collection of accounts receivable. Glory Star Group makes a credit assessment of its advertising customers and advertising agencies to evaluate the collectability of the advertising service fees before entering into an advertising contract. However, Glory Star Group may not be able to accurately assess the creditworthiness of each advertising customer or advertising agency, and any inability of advertising customers or advertising agencies to pay Glory Star Group for its services in a timely manner would negatively our liquidity and cash flows and may materially and adversely affect our business, financial condition and results of operations.

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Glory Star Group operates in a highly competitive market and it may not be able to compete effectively.

Glory Star Group faces significant competition in China in various sub-market it operates, primarily from Alibaba (Nasdaq: BABA), Pin Duouo (Nasdaq:PDD), Douyu (Nasdaq: DOYU), Qu Toutiao (Nasdaq: QTT), Mango Media (SZ.300413), and Zhong Tian Guangze (SH.603721). Glory Star Group competes for users, usage time, advertising customers, and shoppers. Some of its competitors have a longer operating history and significantly greater financial resources than it does, and, in turn, may be able to attract and retain more users, usage time and advertising customers. Glory Star Group’s competitors may compete with it in a variety of ways, including by conducting brand promotions and other marketing activities, and making investments in and acquisitions of its business partners. If any of its competitors achieves greater market acceptance than it does or is able to offer more attractive internet video content, its user traffic and its market share may decrease, which may result in a loss of advertising customers, shoppers, and users, as well as have a material and adverse effect on its business, financial condition and results of operations. Glory Star Group also faces competition for users and user time from major television stations, which are increasing their internet video offerings. Glory Star Group also faces competition from users and user time from other internet media and entertainment services, such as internet and social media platforms that offer content in emerging and innovative media formats..

The success of Glory Star Group’s business depends on its ability to maintain and enhance its brand.

Glory Star Group believes that maintaining and enhancing its brand is of significant importance to the success of its business. Glory Star Group’s well-recognized brand is critical to increasing its user base and, in turn, expanding its shoppers for its e-commerce platform and attractiveness to advertising customers and content providers. Since the internet video industry is highly competitive, maintaining and enhancing its brand depends largely on its ability to become and remain a market leader in China, which may be difficult and expensive to accomplish. To the extent its original content is perceived as low quality or otherwise not appealing to users, Glory Star Group’s ability to maintain and enhance its brand may be adversely impacted which in turn may result in a loss of users for our mobile and online video and e-commerce platform.

Increases in professionally-produced content, or PPC, by others may have a material and adverse effect on Glory Star Group’s business, financial condition and results of operations.

Glory Star Group depends on the quality of its PPC for the success of its business model. The amount of PPC, especially TV series and movies, have recently increased significantly in China and may continue to increase in the future. Due to relatively robust online advertising budgets, internet video streaming platforms are generating more revenues and are competing aggressively to produce and license more PPC in general. As the demand for quality PPC grows, the number of PPC producers will likely grow resulting in an increase in competition for Glory Star Group’s users and usage time, which in turn may result in a loss of advertising customers, users, and shoppers on our e-commerce platform. Any significant loss in advertising customers, users, or shoppers on our e-commerceplatform would have a material and adverse effect on our business, financial condition and results of operations.

The continued and collaborative efforts of Glory Star Group’s senior management and key employees are crucial to its success, and any loss of senior management or key employees may materially and adversely affect our business, financial condition and results of operations.

Glory Star Group’s success depends on the continued and collaborative efforts of its senior management, especially its executive officers, including its founder, Mr. Bing Zhang. If one or more of Glory Star Group’s executives or other key personnel are unable or unwilling to continue to provide their services, Glory Star Group may not be able to find suitable replacements easily or at all. Competition for management and key personnel is intense and the pool of qualified candidates is limited. Glory Star Group may not be able to retain the services of its executives or key personnel, or attract and retain experienced executives or key personnel in the future. If any of its executive officers or key employees joins a competitor or forms a competing business, Glory Star Group may lose crucial business secrets, technological know-how, advertisers and other valuable resources. Each of Glory Star Group’s executive officers and key employees has entered into an employment agreement which contains non-compete provisions. However, Glory Star Group cannot assure you that they will abide by the employment agreements or that Glory Star Group’s efforts to enforce these agreements will be effective enough to protect its interests

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Glory Star does not currently have a chief financial officer and has limited staff with SEC and US GAAP knowledge and experience, and is currently relying on third party consultant with SEC and US GAAP knowledge and experience to assist with its financial statements. As a result of these limitations, Glory Star may be exposed to potential risks relating to its internal controls over financial reporting.

Glory Star does not currently have a chief financial officer, although it is in the process of recruiting a chief financial officer with US GAAP and SEC reporting experience. Further, Glory Star has limited staff with appropriate levels of SEC and US GAAP knowledge and experience to meet the combined company’s future financial reporting requirements. It is currently relying on third party consultants with SEC and US GAAP knowledge and experience to assist with preparation of its consolidated financial statements. As a result of these material weaknesses identified, Glory Star may be exposed to potential risks relating to its internal controls over financial reporting.

In addition, historically, it has been difficult to attract qualified accounting and financial personnel for PRC companies with the requirements that Glory Star seeks. Glory Star can provide no assurance that it will be able to successfully hire a qualified chief financial officer and staff with appropriate levels of SEC and US GAAP knowledge. In the event that the material weaknesses of Glory Star’s internal controls over financial reporting due to the lack of a qualified chief financial officer and accounting staff that cannot be remediated in a timely manner, its internal controls over financial reporting would not be effective which may cause a material misstatement in its financial statements and other information it reports. As a result, these deficiencies and potential misstatements would likely cause investors to lose confidence in the consolidated company’s reported financial and other information and could lead to a decline in the trading price of the company’s common shares.

Glory Star Group’s limited operating history makes it difficult to evaluate its business and prospects.

Glory Star Group expects to continue to grow its user and customer bases and explore new market opportunities. However, due to its limited operating history since 2016, Glory Star Group’s historical growth rate may not be indicative of its future performance. Glory Star Group cannot assure you that its growth rate will be the same as in the past. In addition, Glory Star Group may in the future introduce new services or significantly expand its existing services, including those that currently are of relatively small scale or with which Glory Star Group has little or no prior development or operating experience. If these new or enhanced services fail to engage users and customers, its business and operating results may suffer as a result. Glory Star Group cannot assure you that it will be able to recoup its investments in introducing these new services or enhancing existing smaller business lines, and it may experience significant loss and impairment of asset value due to such efforts. Furthermore, as a technology-based entertainment company, Glory Star Group frequently introduces innovative products and services to its users and advertising customers in order to capture new market opportunities. However, Glory Star Group cannot assure you that its products and services will be well received by its users and advertising customers. If Glory Star Group’s existing or new products and services are not well received by its users and customers, it may suffer damages to its brand image and may not be able to maintain or expand its user and customer base, which in turn may have a material and adverse effect on its business, financial condition and results of operations. You should consider Glory Star Group’s prospects in light of the risks and uncertainties fast-growing companies with limited operating histories in a fast evolving industry.

Glory Star Group may not be able to manage its growth effectively.

Glory Star Group has experienced rapid growth since it launched its services in 2016. To manage the further expansion of its business and the growth of its operations and personnel, it need to continuously expand and enhance its infrastructure and technology, and improve its operational and financial systems, procedures, compliance and controls. Glory Star Group also needs to expand, train and manage its growing employee base. In addition, Glory Star Group’s management will be required to maintain and expand its relationships with distributors, advertising customers, and other third parties. Glory Star Group cannot assure you that its current infrastructure, systems, procedures and controls will be adequate to support its expanding operations. If Glory Star Group fails to manage its expansion effectively, its business, financial condition, results of operations and prospects may be materially and adversely affected.

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If Glory Star Group is unable to offer branded products at attractive prices to meet customer needs and preferences on its e-commerce platform, or if its reputation for selling authentic, high-quality products suffers, it may lose customers and its business, financial condition and results of operations may be materially and adversely affected.

Glory Star Group’s future growth on its e-commerce platform partially depends on its ability to continue to attract new customers as well as to increase the spending and repeat purchase rate of existing customers. Constantly changing consumer preferences have historically affected, and will continue to affect, the online retail industry. Consequently, it must stay abreast of emerging lifestyle and consumer preferences and anticipate product trends that will appeal to existing and potential customers.

As Glory Star Group implements its strategy to offer a personalized web-interfacefocusing on deep curation and targeted offerings desired by its customers, Glory Star Group expects to face additional challenges in the selection of products and services. Glory Star Group is focused on offering only authentic products on its e-commerceplatform, as perception by its customers or prospective customers that any of its products are not authentic, or are lacking in quality, could cause its reputation to suffer. This is particularly important for cosmetics products, which it expect to account for an increasing proportion of its revenues. While Glory Star Group’s representatives generally check the products that are offered for sale on its e-commerce platform to confirm their authenticity and quality, there can be no assurance that its suppliers have provided Glory Star Group with authentic products or that all products that it sells are of the quality expected by consumers. If Glory Star Group’s customers cannot find desired products within its product portfolio at attractive prices, or if its reputation for selling authentic, high-quality products suffers, Glory Star Group customers may lose interest in its e-Mall and thus may visit Glory Star Group’s e-commerce platform less frequently or even stop visiting it altogether, which in turn, may materially and adversely affect Glory Star Group’s business, financial condition and results of operations.

User behavior on mobile devices is rapidly evolving, and if Glory Star Group fails to successfully adapt to these changes, its competitiveness and market position may suffer.

Buyers, sellers and other participants are increasingly using mobile devices in China for a wide range of purposes, including for e-commerce. While a significant and growing portion of participants access Glory Star Group’s e-commerce platform through mobile devices, this area is developing rapidly and Glory Star Group may not be able to continue to increase the level of mobile access to, or transactions on, its e-commerce platform by users of mobile devices. The variety of technical and other configurations across different mobile devices and platforms increases the challenges associated with this environment. Glory Star Group’s ability to successfully expand the use of mobile devices to access its e-commerce platform is affected by the following factors:

•        its ability to continue to provide compelling video content on its e-commerce platform and tools in a multiple mobile device environment;

•        its ability to successfully deploy apps on popular mobile operating systems; and

•        the attractiveness of alternative platforms.

If Glory Star Group is unable to attract significant numbers of new mobile buyers and increase levels of mobile engagement, its ability to maintain or grow its business would be materially and adversely affected.

Glory Star Group’s business prospects and financial results may be impacted by its relationship with third-party platforms.

In addition to its own e-commerce platform, Glory Star Group also distributes video content through third-party platforms. However, there can be no assurance that Glory Star Group’s arrangements with those platforms will be extended or renewed after their respective expiration or that Glory Star Group will be able to extend or renew such arrangements on terms and conditions favorable to Glory Star Group. In addition, if any such third-party platforms breach their obligations under any of the agreements entered into with Glory Star Group or refuses to extend or renew such agreements when their term expires, and Glory Star Group cannot find a suitable replacement on a timely basis, or at all, it may suffer significant losses to its user base and revenue streams, or lose the opportunity to expand its business through such platforms. Disputes may arise between Glory Star Group and third-party platforms with which Glory Star Group has used in the past that may adversely affect the relationship with such platforms which in turn may have a material and adverse effect on Glory Star Group’s business, financial condition and results of operations.

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Glory Star Group faces risks, such as unforeseen costs and potential liability in connection with content it produces, licenses and/or distributes through third-party platforms and its e-commerce platform.

As a producer, licensor and distributor of content, Glory Star Group faces potential liability for negligence, copyright and trademark infringement, or other claims based on the content that it produces, licenses, provides and/or distributes. Glory Star Group also may face potential liability for content used in promoting its service, including marketing materials and features on its platform such as user reviews. Glory Star Group is responsible for the production costs and other expenses of its original content. Litigation to defend these claims could be costly and the expenses and damages arising from any liability or unforeseen production risks could harm its business, financial condition and results of operations. Glory Star Group may not be indemnified against claims or costs of these types and it may not have insurance coverage for these types of claims.

Videos and other content produced by Glory Star Group or displayed on its e-commerce platform may be found objectionable by PRC regulatory authorities and may subject it to penalties and other administrative actions.

Glory Star Group is subject to PRC regulations governing internet access and the distribution of videos and other forms of information over the internet. Under these regulations, internet content providers and internet publishers are prohibited from posting or displaying over the internet any content that, among other things, violates PRC laws and regulations, impairs the national dignity of China or the public interest, or is obscene, superstitious, frightening, gruesome, offensive, fraudulent or defamatory. Furthermore, as an internet video streaming producer, Glory Star Group is not allowed to (i) produce or disseminate programs that distort, parody or vilify classic literary works; (ii) re-edit, re-dub or re-caption the subtitles of classic literary works, radio and television programs, and network-based original audio-video programs, (iii) intercept program segments and splice them into new programs; or (iv) disseminate edited pieces of works that distort the originals. Failure to comply with these requirements may result in monetary penalties, revocation of licenses to provide internet content or other licenses, suspension of the concerned platforms and reputational harm. In addition, these laws and regulations are subject to interpretation by the relevant authorities, and it may not be possible to determine in all cases the types of content that could cause Glory Star Group to be held liable as an internet content provider.

To the extent that PRC regulatory authorities find any content produced by Glory Star Group or displayed on its e-commerce platform objectionable, they may require Glory Star Group to limit or eliminate the dissemination of such content on its platform in the form of take-down orders or otherwise.

Glory Star Group operates in a rapidly evolving industry. If Glory Star Group fails to keep up with the technological developments and users’ changing requirements, its business, financial condition, results of operations and prospects may be materially and adversely affected.

The internet video streaming industry is rapidly evolving and subject to continuous technological changes. Glory Star Group’s success will depend on its ability to keep up with the changes in technology and user behavior resulting from the technological developments. As it make its services available across a variety of mobile operating systems and devices, Glory Star Group is dependent on the interoperability of its services with popular mobile devices and mobile operating systems that it does not control, such as Android and iOS. Any changes in such mobile operating systems or devices that degrade the functionality of Glory Star Group’s services or give preferential treatment to competitive services could adversely affect usage of its services. Further, if the number of mobile operating systems and devices increases, which is typically seen in a dynamic and fragmented mobile services market such as China, Glory Star Group will likely incur additional costs and expenses associated with developing tools and software necessary for access to its e-commerce platform by these devices and systems. If Glory Star Group fails to adapt its products and services to such changes in an effective and timely manner, it may suffer from decreased user traffic, which may result in a reduced user base. Furthermore, changes in technologies may require substantial capital expenditures in product development as well as in modification of products, services or infrastructure. Glory Star Group may not execute its business strategies successfully due to a variety of reasons such as technical hurdles, misunderstanding or erroneous prediction of market demand or lack of necessary resources. Failure to keep up with technological development may result in Glory Star Group’s products and services being less attractive, which, in turn, may materially and adversely affect its business, results of operations and prospects.

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Glory Star Group may not be able to adequately protect its intellectual property rights, and any failure to protect its intellectual property rights could adversely affect its revenues and competitive position.

Glory Star Group believes that trademarks, trade secrets, copyrights, and other intellectual property it uses are critical to its business. Glory Star Group relies on a combination of trademark, copyright and trade secret protection laws in China and other jurisdictions, as well as confidentiality procedures and contractual provisions to protect its intellectual property and its brand. Protection of intellectual property rights in China may not be as effective as in the United States or other jurisdictions, and as a result, it may not be able to adequately protect its intellectual property rights, which could adversely affect its revenues and competitive position. In addition, any unauthorized use of its intellectual property by third parties may adversely affect its revenues and its reputation. Further, Glory Star Group may have difficulty addressing the threats to its business associated with piracy of its copyrighted content, particularly its original content. Glory Star Group’s content and streaming services may be potentially subject to unauthorized consumer copying and illegal digital dissemination without an economic return to Glory Star Group.

Furthermore, policing unauthorized use of proprietary technology is difficult and expensive, and it may need to resort to litigation to enforce or defend intellectual property or to determine the enforceability, scope and validity of its proprietary rights or those of others. Such litigation and an adverse determination in any such litigation could result in substantial costs and diversion of resources and management attention.

Glory Star Group’s business generates and processes a large amount of data, and the improper use or disclosure of such data could harm its reputation as well as have a material adverse effect on its business and prospects.

Glory Star Group’s e-commerce platform generates and processes a large quantity of personal, transaction, demographic and behavioral data. Glory Star Group faces risks inherent in handling large volumes of data and in protecting the security of such data. In particular, Glory Star Group faces a number of challenges relating to data from transactions and other activities on its platform, including:

•        protecting the data in and hosted on its system, including against attacks on its system by outside parties or fraudulent behavior by its employees;

•        addressing concerns related to privacy and sharing, safety, security and other factors; and

•        complying with applicable laws, rules and regulations relating to the collection, use, disclosure or security of personal information, including any requests from regulatory and government authorities relating to such data.

Any systems failure or security breach or lapse that results in the release of user data could harm Glory Star Group’s reputation and brand and, consequently, its business, in addition to exposing Glory Star Group to potential legal liability.

Failure to maintain or improve its technology infrastructure could harm its business and prospects.

Adopting new software and upgrading Glory Star Group’s online infrastructure requires significant investments of time and resources, including adding new hardware, updating software and recruiting and training new engineering personnel. Maintaining and improving its technology infrastructure require significant levels of investment. Adverse consequences could include unanticipated system disruptions, slower response times, impaired quality of buyers’ and sellers’ experiences and delays in reporting accurate operating and financial information. In addition, much of the software and interfaces Glory Star Group uses are internally developed and proprietary technology. If Glory Star Group experiences problems with the functionality and effectiveness of its software, or are unable to maintain and constantly improve its technology infrastructure to handle its business needs, Glory Star Group’s business, financial condition, results of operation and prospects, as well as its reputation, could be materially and adversely affected.

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Glory Star Group is subject to payment processing risk.

Glory Star Group’s e-commerce customers pay for their services using a variety of different online payment methods. Glory Star Group relies on third parties to process such payments. Acceptance and processing of these payment methods are subject to certain rules and regulations and require payment of interchange and other fees. To the extent there are increases in payment processing fees, material changes in the payment ecosystem, such as delays in receiving payments from payment processors and/or changes to rules or regulations concerning payment processing, Glory Star Group’s revenues, operating expenses and results of operations could be adversely impacted.

The successful operation of Glory Star Group’s business depends upon the performance and reliability of the Internet infrastructure in China.

Other than the production of television shows that are transmitted via satellite television in China, Glory Star Group’s business depends on the performance and reliability of the Internet infrastructure in China. Almost all access to the Internet is maintained through state-owned telecommunications operators under the administrative control and regulatory supervision of the Ministry of Industry and Information Technology of China. In addition, the national networks in China are connected to the Internet through state-owned international gateways, which are the only channels through which a domestic user can connect to the Internet outside of China. Glory Star Group may not have access to alternative networks in the event of disruptions, failures or other problems with China’s Internet infrastructure. In addition, the Internet infrastructure in China may not support the demands associated with continued growth in Internet usage.

Security breaches and attacks against Glory Star Group’s internal systems and network, and any potential resulting breach or failure to otherwise protect confidential and proprietary information, could damage Glory Star Group’s reputation and negatively impact its business, as well as materially and adversely affect its financial condition and results of operations.

Although Glory Star Group has employed resources to develop security measures against unauthorized access to its systems and networks, its cybersecurity measures may not successfully detect or prevent all unauthorized attempts to access the data on its network or compromise and disable its systems. Unauthorized access to its network and systems may result in the misappropriation of information or data, deletion or modification of user information, or a denial-of-service or other interruption to its business operations. As techniques used to obtain unauthorized access to or sabotage systems change frequently and may not be known until launched against Glory Star Group or its third-party service providers, it may be unable to anticipate, or implement adequate measures to protect against these attacks. If Glory Star Group is unable to avert these attacks and security breaches, it could be subject to significant legal and financial liability, its reputation would be harmed and it could sustain substantial revenue loss from user dissatisfaction. Glory Star Group may not have the resources or technical sophistication to anticipate or prevent rapidly evolving types of cyber-attacks. Actual or anticipated attacks and risks may cause Glory Star Group to incur significantly higher costs, including costs to deploy additional personnel and network protection technologies, train employees, and engage third-party experts and consultants. Cybersecurity breaches would not only harm its reputation and business, but also could materially decrease its revenue and net income.

Glory Star Group relies upon its partners to make its service available throughInternet Protocol Television (IPTV).

In the IPTV video streaming market, only a small number of qualified license holders can provide internet audio and visual program services to the TV terminal users via IPTV , set-top boxes and other electronic products. Most of those license holders are radio or TV stations. Private companies that wish to operate such business need to cooperate with those license holders to legally provide relevant services. If Glory Star Group is not successful in maintaining existing or creating new relationships, or if it encounters technological, content licensing, regulatory or other impediments to delivering its streaming content to its members via these devices, Glory Star Group’s ability to grow its business may be adversely impacted.

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Disruption or failure of Glory Star Group’s IT systems could impair its users’ online entertainment experience and adversely affect its reputation.

Glory Star Group’s ability to provide users with a high-quality online entertainment experience on its e-commerce platform depends on the continuous and reliable operation of its IT systems. Glory Star Group cannot assure you that it will be able to procure sufficient bandwidth in a timely manner or on acceptable terms or at all. Failure to do so may significantly impair user experience on its platform and decrease the overall effectiveness of its platform to both users and advertisers.

If Glory Star Group experiences frequent or persistent service disruptions, whether caused by failures of its own systems or those of third-party service providers, Glory Star Group’s users’ experience may be negatively affected, which in turn, may have a material and adverse effect on its reputation. Glory Star Group cannot assure you that it will be successful in minimizing the frequency or duration of service interruptions.

Undetected programming errors could adversely affect Glory Star Group’s user experience and market acceptance of its video content, which may materially and adversely affect its business, financial condition and results of operations.

Video content produced by Glory Star Group or displayed on its e-commerce platform may contain programming errors that may only become apparent after its release. Glory Star Group generally has been able to resolve such programming errors in a timely manner. However, Glory Star Group cannot assure you that it will be able to detect and resolve all these programming errors effectively. Undetected audio or video programming errors or defects may adversely affect user experience which in turn may have a material and adverse effect on Glory Star Group’s business, financial condition and results of operation.

Glory Star Group’s revenue and net income may be materially and adversely affected by any economic slowdown in China and indirectly by trade disputes between the United States and China that may contribute to uncertainties in economic outlook.

The success of Glory Star Group’s business depends on consumers spending from e-commerce, advertising fees, production costs and copyright payments from third parties which may be affected by consumer confidence and uncertainties in the outlook for economic growth within China. Glory Star Group derives substantially all of its revenue from China. As a result, its revenue and net income are impacted to a significant extent by economic conditions in China and globally, as well as economic conditions specific to online and mobile commerce and advertising of brands. The PRC government has in recent years implemented a number of measures to control the rate of economic growth, including by raising and lowering of interest rates and adjusting deposit reserve ratios for commercial banks as well as by implementing other measures designed to tighten or loosen credit and liquidity. In the past, these measures have contributed to a slowdown of the PRC economy and although recently the PRC has taken steps to reduce interest rates and adjusting deposit reserve ratios to increase the availability of credit in response to a weakening economy cause, in part, by the continuing trade dispute with the United States, no assurances can be given that the PRC’s efforts will result in more certainty in domestic economic outlook or an increase in consumer confidence. Any continuing or worsening slowdown could significantly reduce domestic commerce in China, including through the Internet generally and within its ecosystem. An economic downturn, whether actual or perceived, a further decrease in economic growth rates or an otherwise uncertain economic outlook in China or any other market in which Glory Star Group may operate could have a material adverse effect on its business, financial condition and results of operations.

Glory Star Group faces risks related to natural disasters, health epidemics and other outbreaks, which could significantly disrupt its operations.

Glory Star Group is vulnerable to natural disasters and other calamities. Fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks or similar events may give rise to server interruptions, breakdowns, system failures, technology platform failures or internet failures, which could cause the loss or corruption of data or malfunctions of software or hardware as well as adversely affect its ability to produce video content or provide products and services on its e-commerce platform.

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Glory Star Group’s business operations could be disrupted if any of its employees are suspected of having Ebola virus disease, H1N1 flu, H7N9 flu, avian flu, SARS or other epidemic, since it could require its employees to be quarantined and/or its offices to be disinfected. In addition, Glory Star Group’s business, financial condition or results of operations could be materially and adversely affected to the extent that any of these epidemics harms the Chinese economy in general.

Glory Star Group’s quarterly operating results may fluctuate, which makes its results of operations difficult to predict and may cause its quarterly results of operations to fall short of expectations.

Glory Star Group’s quarterly operating results have fluctuated in the past and may continue to fluctuate depending upon a number of factors, many of which are out of its control. Its operating results tend to be seasonal. As a result, comparing Glory Star Group’s operating results on a period-to-period basis may not be meaningful. For example, online user numbers tend to be lower during school holidays and certain parts of the school year, and advertising revenues tend to be lower during the Chinese New Year season, which may negatively affects Glory Star Group’s cash flow for those periods.

Glory Star Group requires highly qualified personnel to generate high quality video content and if it is unable to hire or retain qualified personnel, it may not be able to grow effectively and its business, financial condition, and results of operation may be materially and adversely affected.

Glory Star Group currently relies on its in-house team of employees to generate creative ideas for original content and to supervise the original content origination and production process and intends to continue to invest its human and capital resources in such content production. Glory Star Group faces fierce competition for qualified personnel in a limited pool of high-quality creative talent. If it is not able to compete effectively for highly qualified personnel or attract and retain top talent at reasonable costs, its original content production capabilities would be materially and adversely impacted. If Glory Star Group is unable to offer popular original content that addresses its user’s tastes and preferences in a cost effective manner, it may suffer a reduction in user traffic and its business, financial condition and results of operations may be materially and adversely affected.

Glory Star Group’s future success also depends upon its ability to attract and retain highly qualified management personnel. Expansion of Glory Star Group’s business and its management will require additional managers and employees with industry experience, and its success will be highly dependent on its ability to attract and retain skilled management personnel and other employees. Glory Star Group may not be able to attract or retain highly qualified personnel. Competition for skilled management personnel is significant in China. This competition may make it more difficult and expensive to attract, hire and retain qualified managers and employees.

Glory Star’s controlling shareholder will have substantial influence over Glory Star and its interests may not be aligned with the interests of its other shareholders.

As of September 22, 2019, Glory Star has 2,000,000 issued and outstanding ordinary shares. 797,584 ordinary shares are held by Happy Starlight Limited, which is controlled by Mr. Bing Zhang, Glory Star’s sole director and Chief Executive Officer. As such, Mr.Zhang will have substantial influence over Glory Star’s business, including decisions regarding mergers, consolidations, the sale of all or substantially all of its assets, election of directors, declaration of dividends and other significant corporate actions. As the controlling shareholder, he may take actions that are not in the best interests of Glory Star’s other shareholders. These actions may be taken in many cases even if they are opposed by Glory Star’s other shareholders. In addition, this concentration of ownership may discourage, delay or prevent a change in control which could deprive you of an opportunity to receive a premium for your ordinary shares as part of a sale of its company.

Glory Star does not foresee paying cash dividends in the foreseeable future and, as a result, its investors’ sole source of gain will depend on capital appreciation, if any.

Glory Star does not plan to declare or pay any cash dividends on its shares of ordinary shares in the foreseeable future and currently intends to retain any future earnings for funding growth. As a result, investors should not rely on an investment in its securities if they require the investment to produce dividend income. Capital appreciation, if any, of Glory Star’s shares may be its investors’ sole source of gain for the foreseeable future.

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Glory Star’s bank accounts are in China and are not insured or protected against loss.

Glory Star maintains its cash primarily with major banks in China which is primarily owned by the Chinese government. Glory Star’s cash accounts are not insured or otherwise protected. Should any bank or trust company holding its cash deposits become insolvent, or if it is otherwise unable to withdraw funds, it could lose the cash on deposit with that particular bank or trust company or have its account frozen.

Glory Star Group’s failure to protect its intellectual property rights could have a negative impact on its business.

Glory Star Group believes its brand, trade names, trademarks and other intellectual property are critical to its success. The success of its business depends substantially upon its continued ability to use its brand, trade names and trademarks to increase brand awareness and to further develop its brand. The unauthorized reproduction of its trade names or trademarks could diminish the value of its brand and its market acceptance, competitive advantages or goodwill. In addition, its proprietary information, which has not been patented or otherwise registered as its property, is a component of its competitive advantage and its growth strategy.

Monitoring and preventing the unauthorized use of its intellectual property is difficult. The measures Glory Star Group takes to protect its brand, trade names, trademarks and other intellectual property rights may not be adequate to prevent their unauthorized use by third parties. In addition, the application of laws governing intellectual property rights in China and abroad is uncertain and evolving, and could involve substantial risks to Glory Star Group. To Glory Star Group’s knowledge, the relevant authorities in China historically have not protected intellectual property rights to the same extent as the United States. If Glory Star Group is unable to adequately protect its brand, trade names, trademarks and other intellectual property rights, it may lose these rights and its business may suffer materially. Further, unauthorized use of Glory Star Group brands, trade names or trademarks could cause brand confusion among advertisers and harm its reputation as a provider of high quality and comprehensive advertising services. If Glory Star Group’s brand recognition decreases, it may lose advertisers and fail in its expansion strategies, and its business, results of operations, financial condition and prospects could be materially and adversely affected.

Glory Star Group may be named as a defendant in litigation, or may be joined as a defendant in litigation brought against its customers by third parties, its customers’ competitors, governmental or regulatory authorities or consumers, which could result in judgments against Glory Star Group and materially disrupt its business. These actions could involve claims alleging, among other things, that:

•        advertising claims made with respect to its customers’ products or services are false, deceptive or misleading;

•        its customers’ products are defective or injurious and may be harmful to others; or

•        marketing, communicating or advertising materials created for its customers infringe on the proprietary rights of third parties.

The damages, costs, expenses and attorneys’ fees arising from any of these claims could have a material and adverse affect on Glory Star Group’s business, financial condition, results of operations, and prospects to the extent that it is not adequately indemnified by its customers. In any case, Glory Star Group’s reputation may be negatively affected by these allegations.

Glory Star Group relies on computer software and hardware systems in its operations, the failure of which could adversely affect its business, financial condition, and results of operations.

Glory Star Group is dependent upon its computer software and hardware systems in designing its advertisements and keeping important operational and market information. In addition, Glory Star Group relies on its computer hardware for the storage, delivery and transmission of data. Any system failure that causes interruptions to the input, retrieval and transmission of data or increase in service time could disrupt its normal operations. Although Glory Star Group has a disaster recovery plan that is designed to address the failures of its computer software and hardware systems, it may not be able to effectively carry out this disaster recovery plan or restore its operations within a sufficiently short time frame to avoid business disruptions. Any failure in Glory Star Group’s computer software or hardware systems could decrease its revenues and harm its relationships with advertisers, television channels and other media companies, which in turn could have a material adverse effect on its business, results of operations and financial condition.

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Glory Star Group does not maintain business liability or disruption, litigation or property insurance and any business liability or disruption, litigation or property damage it experience may result in substantial costs to it and the diversion of its resources.

The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business disruption, business liability or similar business insurance products. Glory Star Group has determined that the risks of disruption or liability from its business, the potential loss or damage to its property, including its facilities, equipment and office furniture, the cost of obtaining insurance coverage for these risks and the difficulties associated with obtaining such insurance on commercially reasonable terms, make it impractical for Glory Star Group to have obtained such insurance on terms and conditions that are commercially reasonable. As a result, Glory Star Group did not purchase any business liability, disruption, litigation or property insurance coverage for its operations in China. Any occurrence of an uninsured loss or damage to its property or litigation or business disruption may result in substantial costs to Glory Star Group and the diversion of its resources, which could have an adverse effect on its operating results.

Risks Related to Glory Star Group’s Corporate Structure

The PRC government may determine that the VIE Contracts are not in compliance with applicable PRC laws, rules and regulations.

To comply with applicable PRC laws, rules and regulations, Glory Star Group conducts its operations in the PRC through the VIE Contracts, a series of contractual arrangements entered into among (i) WFOE, (ii) Glory Star and certain shareholders of Glory Star, (iii) Xing Cui Can and its shareholders, and (iv) Horgos and its shareholder, which consist of the Business Cooperation Agreement, Exclusive Option Agreement, Proxy Agreement and Power of Attorney, and Share Pledge Agreement. As a result of these VIE Contracts, Glory Star manages and operates its value-added telecommunication services and certain other business through the WFOE, Xing Cui Can and Horgos pursuant to the rights it holds under the VIE Contracts. A majority of the economic benefit and almost all of the risks arising from the operations of Xing Cui Can and Horgos are ultimately enjoyed and undertaken by Glory Star under these agreements.

There are risks involved with the operation of its business in reliance on the VIE Contracts, including the risk that the VIE Contracts may be determined by PRC regulators or courts to be unenforceable. Although Glory Star believes it is in compliance with current PRC regulations in the execution and implementation of the VIE Contracts, it cannot assure you the PRC government would agree that the VIE Contracts fully comply with existing PRC policies or with policies that may be adopted in the future. PRC laws and regulations governing the validity of these VIE Contracts are uncertain. If the VIE Contracts were for any reason determined to be in breach of any existing or future PRC laws or regulations, the relevant regulatory authorities would have broad discretion in dealing with such breach, including:

•        imposing economic penalties;

•        discounting or restricting the operations of Horgos and Xing Cui Can;

•        imposing conditions or requirements in respect of the VIE Contracts with which Horgos, Xing Cui Can or WFOE may not be able to comply;

•        requiring Glory Star to restructure the relevant ownership structure or operations;

•        taking other regulatory or enforcement actions that could adversely affect its business; and

•        revoking the business licenses and/or the licenses or certificates of Horgos, Xing Cui Can or WFOE, and/or voiding the VIE Contracts.

Any of these actions would adversely affect its ability to manage, operate and gain the financial benefits of Horgos and Xing Cui Can, which would have a material adverse impact on its business, financial condition and results of operations.

Glory Star’s ability to manage and operate Horgos and Xing Cui Can under the VIE Contracts may not be as effective as direct ownership.

Glory Star Group conducts its advertising operation, e-commerce and certain other business in the PRC and generates virtually all of its revenues for its business through the VIE Contracts. Glory Star’s plans for future growth

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are based substantially on growing the operations of Horgos and Xing Cui Can. However, the VIE Contracts may not be as effective in providing Glory Star with control over Horgos and Xing Cui Can as direct ownership. Under the current VIE Contracts, if Horgos, Xing Cui Can or their shareholders fail to perform their obligations under these contractual arrangements, Glory Star may have to incur substantial costs and resources to enforce such arrangements, and rely on legal remedies under PRC law, which it cannot be sure would be effective. Therefore, if Glory Star is unable to effectively control Horgos and Xing Cui Can, it may have an adverse effect on Glory Star’s ability to achieve its business objectives and grow its revenues.

As the VIE Contracts are governed by PRC law, Glory Star would be required to rely on PRC law to enforce its rights and remedies under them; PRC law may not provide Glory Star with the same rights and remedies as are available in contractual disputes governed by the law of other jurisdictions.

The VIE Contracts are governed by PRC law and provide for the resolution of disputes through arbitral proceedings. If Horgos, Xing Cui Can or their shareholders fail to perform their obligations under the VIE Contracts, Glory Star would be required to resort to legal remedies available under PRC law, including seeking specific performance or injunctive relief, or claiming damages. Glory Star cannot be sure that such remedies would provide Glory Star with effective means of causing Horgos or Xing Cui Can to meet their obligations, or recovering any losses or damages as a result of non-performance. Further, the legal environment in the PRC is not as developed as in some other jurisdictions. Uncertainties in the application of various laws, rules, regulations or policies in the PRC legal system could limit its liability to enforce the VIE Contracts and protect its interests.

The payment arrangement under the VIE Contracts may be challenged by the PRC tax authorities.

Glory Star Group generates its revenues through the payments it receive pursuant to the VIE Contracts. Glory Star Group could face adverse tax consequences if the PRC tax authorities determine that the VIE Contracts were not entered into based on arm’s length negotiations. For example, PRC tax authorities may adjust its income and expenses for PRC tax purposes, which could result in its being subject to higher tax liability, or cause other adverse financial consequences. According to the PRC Tax Administration and Collection Law, (中华人民共和国税收征收管理法), and Implementation Regulations for the Law of the PRC Tax Administration and Collection Law 《中华人民共和国税收征收管理法实施细则(2016修订 )》, in the case of a transfer pricing related adjustment, the statute of limitation is three years normally and 10 years in special instances.

Glory Star Group relies on the approval certificates and business license held by it for its advertising operation, e-commerce and certain other business and any deterioration of the relationship between Horgos and Xing Cui Can could materially and adversely affect its business operations.

Glory Star Group operates its advertising operation, e-commerce and certain other business in the PRC on the basis of the approval certificates, business license and other requisite licenses held by Glory Star. There is no assurance that Glory Star Group will be able to renew its licenses or certificates when their terms expire with substantially similar terms as the ones it currently holds.

Further, its relationship with Horgos and Xing Cui Can is governed by the VIE Contracts, which is intended to provide Glory Star with effective control over the business operations of Horgos and Xing Cui Can. However, the VIE Contracts may not be effective in providing control over the application for and maintenance of the licenses required for Glory Star Group’s business operations. Glory Star could violate the VIE Contracts, go bankrupt, suffer from difficulties in its business or otherwise become unable to perform its obligations under the VIE Contracts and, as a result, its operations, reputations and business could be severely harmed.

If the WFOE exercises the purchase option it holds over the share capital of Horgos or Xing Cui Can pursuant to the Exclusive Option Agreement, the payment of the purchase price could materially and adversely affect its financial position.

Under the Exclusive Option Agreement, the WFOE has the option to purchase up to 100% of the equity interest in Horgos and Xing Cui Can at a price equivalent to the lowest price then permitted under PRC law, provided that the acquisition will not violate any PRC laws or regulations in effect. As Horgos and Xing Cui Can are already Glory Star’s contractually controlled affiliates, the WFOE’s exercising of the options would not bring immediate benefits to it, and payment of the purchase price could adversely affect Glory Star Group’s financial position.

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Risks Relating to Doing Business in China

Glory Star Group is subject to PRC laws or regulations that govern its industry.

Glory Star Group is subject to administrative regulatory authorities and applicable laws in the PRC to operate its business. In order to operate its business Glory Star Group is required to obtain licenses and permits by various governmental agencies. Glory Star Group will not be able to operate some of businesses if it loses its licenses and permits, which will adversely affect its business.

Glory Star Group is subject to risks relating to the nature of China’s advertising industry, including frequent and sudden changes in advertising proposals.

The nature of the advertising business in China is such that sudden changes in advertising proposals and actual advertisements are frequent. In China, television stations, as the advertising publisher, remain responsible for the content of advertisements, and as a result, television stations may reject or recommend changes to the content of advertisements. Glory Star Group strives to minimize problems related to work for clients by encouraging the conclusion of basic written agreements, but it is exposed to the risk of unforeseen incidents or disputes with advertising clients. In addition, similar to other companies in its industry in the PRC where relationships between advertising clients within a particular industry and advertising companies are not typically exclusive, Glory Star Group is currently acting for multiple clients within a single industry in a number of industries. If this practice in China is to change in favor of exclusive relationships and if Glory Star Group’s efforts to respond to this change are ineffective, its business, results of operations and financial condition could be materially and adversely affected.

China regulates media content extensively and it may be subject to government actions based on the advertising content it design for advertising clients or services it provide to them.

PRC advertising laws and regulations require advertisers, advertising operators and advertising publishers, including Glory Star Group’s businesses, to ensure that the advertisements shall not contain any false or misleading content and their advertising activities shall be in full compliance with applicable laws, rules and regulations. Violation of these laws, rules or regulations may result in penalties, including fines, confiscation of advertising fees, orders to cease dissemination of the advertisements and orders to publish an advertisement correcting the misleading information. In circumstances involving serious violations, the PRC government may revoke its business license. In addition, such non-compliance can constitute a violation of criminal law and criminal proceedings could be brought against Glory Star Group as a result.

Glory Star Group’s business includes assisting advertising clients in designing and producing advertisements, as well as executing their advertising campaigns. Glory Star Group acts as agent for its clients in dealing with television channels, or other media on whose platform its clients want to display their advertisements. Under Glory Star Group’s agreements with television stations, it is typically responsible for the compliance with applicable laws, rules and regulations with respect to advertising content that it provide to the media. In addition, some of its advertising clients provide completed advertisements for Glory Star Group to display on the television channels. Although these advertisements are subject to internal review and verification, their content may not fully comply with applicable laws, rules and regulations. Further, for advertising content related to special types of products and services, such as pharmaceuticals and medical procedures, pesticides and health products, it is required to confirm that Glory Star Group’s clients have obtained requisite government approvals. Glory Star Group endeavors to comply with such requirements, including by requesting relevant documents from the advertising clients and employing qualified advertising inspectors who are trained to review advertising content for compliance with applicable PRC laws, rules and regulations. However, Glory Star Group cannot assure you that violations or alleged violations of the content requirements will not occur with respect to its operations. If the relevant PRC governmental agencies determine the content of the advertisements that Glory Star Group represents violated any applicable laws, rules or regulations, Glory Star Group could be subject to penalties, which may harm its reputation and may divert significant amounts of its management’s time and other resources. It may be difficult and expensive to defend against such proceedings. Although Glory Star Group’s agreements with its clients normally require them to warrant the fairness, accuracy and compliance with relevant laws and regulations of their advertising content and agree to indemnify Glory Star Group for violations of these warranties, these contractual remedies may not cover all of its losses resulting from governmental penalties. Violations or alleged violations of the content requirements could also harm Glory Star Group’s reputation and impair its ability to conduct and expand its business.

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Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to Glory Star Group.

The PRC legal system is a civil law system based on written statutes. Unlike common law systems, it is a system in which legal decisions have limited value as precedents. In the late 1970s, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The overall effect of legislation over the past three decades has significantly increased the protections afforded to various forms of foreign or private-sector investment in the PRC. WFOE, Glory Star’s PRC operating subsidiary, is a wholly foreign-owned enterprise and is subject to laws and regulations applicable to foreign investment in the PRC as well as laws and regulations applicable to foreign-invested enterprises. WFOE is a privately owned company and is subject to various PRC laws and regulations that are generally applicable to companies in the PRC. These laws and regulations are still evolving, and their interpretation and enforcement involve uncertainties. For example, Glory Star may have to resort to administrative and court proceedings to enforce the legal protections that it enjoy either by law or contract. However, since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection Glory Star may enjoy in the PRC legal system than in more developed legal systems. These uncertainties may also impede its ability to enforce the contracts Glory Star has entered into. As a result, these uncertainties could materially and adversely affect its business and operations.

Delays in issuing invoices due to China taxing authorities may materially and adversely affect its cash flow.

Companies operating in China may be required to obtain VAT invoices in advance from the Chinese tax authorities in order to collect the dues from its customers according to their contractual arrangement. To accomplish this, companies submit invoices to the Chinese tax authorities and awaits for the VAT invoices to be issued. Upon receipt, it sends the VAT invoices to the customers for payment. From time to time, the Chinese tax authority may delay issuing the VAT invoices because the amount of the company’s invoices exceeded the quotas previously granted for the VAT invoices for that period of time. Such quotas are set by the Chinese tax authorities based on the amount of invoices issued by the company over a period of time pursuant to the company’s past business operation, which quotas are adjusted periodically. As such, for fast growing companies like Glory Star, its invoices may periodically exceed the current quota granted which results in a delay in obtaining VAT invoices impacting its ability to timely invoice and collect its accounts receivable from its clients. To address this challenge, Glory Star has taken an active role in reaching out to the Chinese tax authorities to explain the company’s fast growth which is outpacing the quota needed to timely obtain VAT invoices. In addition, Glory Star is working closely with its clients to receive payments before VAT invoices are issued. However, if Glory Star is unable to timely increase its quota resulting in delays in issuing VAT invoices or its clients are unable or unwilling to make payments before receipt of VAT invoices, it may suffer delays in collecting its accounts receivable and hence affect its cash flow.

Competition in its industry is growing and could cause Glory Star Group to lose market share and revenues in the future.

Glory Star Group may face growing competition in its industry and it believes that the market is becoming more competitive as this industry matures and begins to consolidate. Some of its competitors have larger and more established borrower bases and substantially greater financial, marketing and other resources than Glory Star Group. As a result, Glory Star Group could lose market share and its revenues could decline, thereby affecting its earnings and potential for growth.

Glory Star Group’s business depends on the continuing efforts of its management. If it loses their services, its business may be severely disrupted.

Glory Star Group’s business operations depend on the continuing efforts of its management, particularly the executive officers named in this document. If one or more of its management were unable or unwilling to continue their employment with Glory Star Group, it might not be able to replace them in a timely manner, or at all. Glory Star Group may incur additional expenses to recruit and retain qualified replacements. Glory Star Group’s business may be severely disrupted and its financial condition and results of operations may be materially and adversely affected. In addition, its management may join a competitor or form a competing company. Glory Star Group may not be able to successfully enforce any contractual rights it has with its management team, in particular in China, where all of these

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individuals reside and where its business is operated through Glory Star Group through a series of subsidiaries and the VIE Contracts. As a result, Glory Star Group’s business may be negatively affected due to the loss of one or more members of its management.

Failure to maintain an effective internal control over financial reporting may cause the combined company’s investors to lose confidence in its financial and other reports.

As a public company, the combined company will be subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002. The Exchange Act requires, among other things, that the combined company file annual reports with respect to its business and financial condition. Section 404 of the Sarbanes-Oxley Act requires, among other things, that the combined company include a report of its management on the combined company’s internal control over financial reporting. The combined company is also required to include certifications of its management regarding the effectiveness of its disclosure controls and procedures. If the combined company cannot effectively maintain its controls and procedures, the combined company could suffer material misstatements in its financial statements and other information it reports which would likely cause investors to lose confidence. This lack of confidence could lead to a decline in the trading price of the combined company’s common shares.

Glory Star Group’s business may be materially adversely impacted by the global financial crisis and economic downturn.

Glory Star Group operates its business in the PRC. Any future global financial crisis and economic downturn may materially adversely impact Glory Star Group’s business, financial condition, results of operations and prospects in a number of ways, including:

•        it may face severe challenges, loss of customers and other operation risks during the global financial crisis and economic downturn;

•        financing and other sources of liquidity may not be available on reasonable terms or at all.

These risks may be exacerbated in the event of a prolonged economic downturn or financial crisis.

A severe and prolonged global economic recession and the slowdown in the Chinese economy may adversely affect Glory Star Group’s business, results of operations and financial condition.

The growth of the Chinese economy has slowed down since 2012 compared to the previous decade and the trend may continue. According to the National Bureau of Statistics of China, China’s gross domestic product (GDP) growth was 6.6% in 2018. There is considerable uncertainty over the long-term effects of the monetary and fiscal policies adopted by the central banks and financial authorities of some of the world’s leading economies, including the United States and China. In addition, there have also been concerns on the relationship between China and the U.S. following rounds of tariffs imposed by the U.S. and retaliatory tariffs imposed by China and concerns on the relationship among China and other Asian countries, which may result in or intensify potential conflicts in relation to territorial disputes. It is unclear whether these challenges and uncertainties will be contained or resolved, and what effects they may have on the global political and economic conditions in the long term. Economic conditions in China are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. Any prolonged slowdown in the global or Chinese economy may have a negative impact on Glory Star Group’s business, results of operations and financial condition, and continued turbulence in the international markets may adversely affect its ability to access the capital markets to meet liquidity needs.

Any adverse changes in political policies of the PRC government could negatively impact China’s overall economic growth, which could materially adversely affect Glory Star Group’s business.

Glory Star is a holding company and all of its operations are entirely conducted in the PRC. China’s economy differs from the economies of most other countries in many respects, including the amount of government involvement in the economy, the general level of economic development, growth rates and government control of foreign exchange and the allocation of resources. The PRC government exercises significant control over China’s economic growth by allocating resources, controlling the payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies. Any actions and policies adopted by the PRC government could negatively impact the Chinese economy, which could materially adversely affect Glory Star Group’s business.

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Substantial uncertainties and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact upon the business Glory Star Group may be able to conduct in the PRC and accordingly on the results of its operations and financial condition.

Glory Star Group’s business operations may be adversely affected by the current and future political environment in the PRC. The Chinese government exerts substantial influence and control over the manner in which Glory Star Group must conduct its business activities. Glory Star Group’s ability to operate in China may be adversely affected by changes in Chinese laws and regulations. Under the current government leadership, the government of the PRC has been pursuing economic reform policies that encourage private economic activities and greater economic decentralization. However, the government of the PRC may not continue to pursue these policies, or may significantly alter these policies from time to time without notice.

There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws and regulations governing Glory Star Group’s business, or the laws and regulations applicable to foreign investments in China. Only after 1979 did the Chinese government begin to promulgate a comprehensive system of laws that regulate economic affairs in general, deal with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade, as well as encourage foreign investment in China. Although the influence of the law has been increasing, 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. Also, because these laws and regulations are relatively new, and because of the limited volume of published cases and judicial interpretation and their lack of force as precedents, interpretation and enforcement of these laws and regulations involve significant uncertainties. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. In addition, there have been constant changes and amendments of laws and regulations over the past 30 years in order to keep up with the rapidly changing society and economy in China. Because government agencies and courts provide interpretations of laws and regulations and decide contractual disputes and issues, their inexperience in adjudicating new business and new polices or regulations in certain less developed areas causes uncertainty and may affect Glory Star Group’s business. Consequently, Glory Star Group cannot clearly foresee the future direction of Chinese legislative activities with respect to either businesses with foreign investment or the effectiveness on enforcement of laws and regulations in China. The uncertainties, including new laws and regulations and changes of existing laws, as well as judicial interpretation by inexperienced officials in the agencies and courts in certain areas, may cause possible problems to foreign investors.

The Second Session of the Thirteen National People’s Congress of the People’s Republic of China voted to adopt the Foreign Investment Law of the People’s Republic of China (“the Foreign Investment Law”) on March 15, 2019, which shall come into effect on January 1, 2020. The current three major foreign investment laws (the Sino-Foreign Equity Joint Venture Law, Sino-Foreign Cooperative Joint Venture Law and Wholly Foreign Owned Enterprise Law) shall be replaced by the Foreign Investment Law on January 1, 2020.

The Foreign Investment Law expressly stipulated that “the State protects foreign investors’ investment, earnings and other legitimate rights and interests within the territory of China pursuant to the present Law;” “foreign investors may, according to the present Law, freely remit into or out of China, in Renminbi or any other foreign currency, their contributions, profits, capital gains, income from asset proposal, intellectual property royalties, lawfully acquired compensation, indemnity or liquidation income and so on within the territory of China;” “Foreign investors shall not invest in any field with investment prohibited by the negative list for foreign investment access. Foreign investors shall meet the investment conditions stipulated under the negative list for any field with investment restricted by the negative list for foreign investment access;” “In formulating normative documents concerning foreign investment, the people’s governments at all levels and their departments concerned shall comply with laws and regulations, and if there are no laws or administrative regulations to serve as the basis, they shall not impair foreign-invested enterprises’ legitimate rights and interests or increase their obligations, set any market access and exit conditions, or intervene the normal production and operation activities of any foreign-investedenterprise.”

It is unclear how the Foreign Investment Law will be implemented in practice by the PRC government authorities. Comparing with the Draft Foreign Investment Law of the People’s Republic of China published in 2015, the Foreign Investment Law does not include the following expression of ‘control or acquire equities of an enterprise within the territory of China through contractual arrangements, including but not limited to contracts and trust agreements.’ Whether the offshore companies controlled by the PRC investors through variable interest entities structure be deemed as foreign investment remains to be seen.

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Fluctuations in the foreign currency exchange rate between U.S. Dollars and Renminbi could adversely affect Glory Star Group’s financial condition.

The value of the RMB against