{"url_path":"/sec/cdtg/10-k/2026/item-10","section_key":"item-10","section_title":"Item 10 ADDITIONAL INFORMATION**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1793895/0001731122-26-000740-index.html","accession_number":"0001731122-26-000740","cik":"0001793895","ticker":"CDTG","issuer_name":"CDT Environmental Technology Investment Holdings Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/1793895/0001731122-26-000740-index.html","primary_entity_key":"0001793895","primary_entity_name":"CDT Environmental Technology Investment Holdings Ltd"},"word_count":8482,"has_tables":true,"body_markdown":"**ITEM 10. ADDITIONAL INFORMATION**\n\n \n\n**A. Share Capital**\n\n \n\nNot applicable.\n\n \n\n90\n\n \n\n \n\n**B. Memorandum and Articles of Association**\n\n \n\nWe are an exempted company incorporated\nwith limited liability under the laws of the Cayman Islands and our affairs are governed by:\n\n \n\n \n●\n\nSecond Amended and Restated Memorandum and Articles of Association;\n\n \n\n \n●\nThe Companies Act (as revised) of the Caymans Islands, which is referred to as the Companies Act below; and\n\n \n\n \n●\nCommon law of the Cayman Islands.\n\n \n\nOur authorized share capital is\nUS$250,000 divided into (a) 94,000,000 Class A ordinary shares with a par value of $0.0025 each of which 75,525,000 are issued and outstanding\nand (b) 6,000,000 Class B ordinary shares of par value US$0.0025 each of which none are issued and outstanding..\n\n \n\n The objects for which the\nCompany is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by\nany law as provided by Section 7(4) of the Companies Act (as revised) of the Cayman Islands (“Companies Act”).\n\n \n\nWe have included summaries of material\nprovisions of our second amended and restated memorandum and articles of association insofar as they relate to the material terms of our\nshare capital. The summaries do not purport to be complete and are qualified in their entirety by reference to our second amended and\nrestated memorandum and articles of association, which is filed as Exhibit 1.1 to this annual report.\n\n \n\n**Issuance of Shares and Changes to Capital**\n\n \n\nOur board of directors has general\nand unconditional authority to allot, grant options over, offer or otherwise deal with or dispose of any unissued shares in our capital\nwithout the approval of our shareholders (whether forming part of the original or any increased share capital), either at a premium or\nat par, with or without preferred, deferred or other special rights or restrictions, whether in regard to dividend, voting, return of\ncapital or otherwise and to such persons, on such terms and conditions, and at such times as the directors may decide, but so that no\nshare shall be issued at a discount, except in accordance with the provisions of the Companies Act. We will not issue bearer shares.\n\n \n\nWe may, subject to the provisions\nof the Companies Act and our second amended and restated memorandum and articles of association, from time to time by shareholders resolution\npassed by a simple majority of the voting rights entitled to vote at a general meeting: increase our capital by such sum, to be divided\ninto shares of such amounts, as the relevant resolution shall prescribe; consolidate and divide all or any of our share capital into shares\nof larger amount than our existing shares; convert all or any of our paid up shares into stock and reconvert that stock into paid up shares\nof any denomination; sub-divide our existing shares, or any of them, into shares of smaller amounts than is fixed pursuant to our second\namended and restated memorandum and articles of association; and cancel any shares which at the date of the passing of the resolution\nhave not been taken or agreed to be taken by any person, and diminish the amount of our share capital by the amount of the shares so cancelled.\n\n \n\nWe may also, subject to the provisions\nof the Companies Act and our second amended and restated memorandum and articles of association: issue shares on terms that they are to\nbe redeemed or are liable to be redeemed; purchase our own shares (including any redeemable shares); and make a payment in respect of\nthe redemption or purchase of our own shares in any manner authorized by the Companies Act, including out of our capital.\n\n \n\n**Dividends**\n\n \n\nSubject to the Companies Act, our\nshareholders may, by resolution passed by a simple majority of the voting rights entitled to vote at the general meeting, declare dividends\n(including interim dividends) to be paid to our shareholders but no dividend shall be declared in excess of the amount recommended by\nour board of directors. Dividends may be declared and paid out of funds lawfully available to us. Except as otherwise provided by the\nrights attached to shares, all dividends shall be declared and paid according to the amounts paid up on the shares on which the dividend\nis paid. All dividends shall be paid in proportion to the number of ordinary shares a shareholder holds during any portion or portions\nof the period in respect of which the dividend is paid; but, if any share is issued on terms providing that it shall rank for dividend\nas from a particular date, that share shall rank for dividend accordingly. Our board of directors may also declare and pay dividends out\nof the share premium account or any other fund or account which can be authorized for this purpose in accordance with the Companies Act.\n\n \n\n91\n\n \n\n \n\nIn addition, our board of directors\nmay resolve to capitalize any undivided profits not required for paying any preferential dividend (whether or not they are available for\ndistribution) or any sum standing to the credit of our share premium account or capital redemption reserve; appropriate the sum resolved\nto be capitalized to the shareholders who would have been entitled to it if it were distributed by way of dividend and in the same proportions\nand apply such sum on their behalf either in or towards paying up the amounts, if any, for the time being unpaid on any shares held by\nthem respectively, or in paying up in full unissued shares or debentures of a nominal amount equal to such sum, and allot the shares or\ndebentures credited as fully paid to those shareholders, or as they may direct, in those proportions, or partly in one way and partly\nin the other; resolve that any shares so allotted to any shareholder in respect of a holding by him/her of any partly-paid shares rank\nfor dividend, so long as such shares remain partly paid, only to the extent that such partly paid shares rank for dividend; make such\nprovision by the issue of fractional certificates or by payment in cash or otherwise as they determine in the case of shares or debentures\nbecoming distributable in fractions; and authorize any person to enter on behalf of all our shareholders concerned in an agreement with\nus providing for the allotment of them respectively, credited as fully paid, of any shares or debentures to which they may be entitled\nupon such capitalization, any agreement made under such authority being binding on all such shareholders.\n\n \n\nAny dividend which has remained\nunclaimed for six years from the date when it became due for payment shall, if the directors so resolve, be forfeited and cease to remain\nowing by the Company.\n\n  \n\n**Voting Rights**\n\n \n\n**Class A Ordinary Shares**\n\n \n\nEach Class A Ordinary Share shall\nbe entitled to one (1) vote on all matters subject to vote at general meetings of the Company. Unless otherwise approved by the Directors,\na holder of Class A Ordinary Shares shall have no rights to convert Class A Ordinary Shares into Class B Ordinary Shares.\n\n \n\n**Class\nB Ordinary Shares**\n\nEach Class\nB Ordinary Share shall be entitled to twenty (20) votes on all matters subject to vote at general meetings of the Company\n\nEach Class\nB Ordinary Share shall be converted at the option of the holder, at any time after issue and without the payment of any additional sum,\ninto such number of fully paid Class A Ordinary Shares calculated at the conversion rate, which shall be, at any time, on a one-to-one\nbasis in accordance with our second amended and restated memorandum and articles of association.\n\nUpon any\ndirect or in direct sale, transfer, assignment or disposition of Class B Ordinary Shares by a holder thereof to any person or entity which\nis not an affiliate of such holder, such Class B Ordinary Shares validly transferred to the new holder shall be automatically and immediately\nconverted into such number of Class A Ordinary Shares calculated based on the conversion rate, which shall be, at any time, on a one-to-one\nbasis in accordance with our second amended and restated memorandum and articles of association.\n\nClass B Ordinary\nShares have the same rights, including dividend rights, in all circumstances as Class A Ordinary Shares, except for the conversion right,\nthe voting right at general meetings and transfer restrictions described above.\n\n**General\nMeetings**\n\nHolders of Class A Ordinary Shares\nand Class B Ordinary Shares have the right to receive notice of, attend, speak and vote at general meetings of the Company.\n\n \n\nExcept with respect to any matter\nrequiring a separate class vote under the Act or these Articles, holders of Class A Ordinary Shares and Class B Ordinary Shares shall\nat all times vote together as one class on all resolutions submitted to a vote by the Members.\n\n  \n\nAs a Cayman Islands exempted company,\nwe are not obliged by the Companies Act to call annual general meetings. Our second amended and restated memorandum and articles of association\nprovide that we may, but shall not (unless required by the Companies Act) be obliged to, in each year hold a general meeting as its annual\ngeneral meeting. . Also, we may, but are not required to (unless required by Cayman Islands law), hold other extraordinary general meeting.\n\n \n\nThe Companies Act provides shareholders\nwith only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before\na general meeting. However, these rights may be provided in a company’s articles of association. Our second amended and restated\nmemorandum and articles of association provide that upon the requisition of shareholders representing not less than two-thirds in par\nvalue of the issued shares which as at that date carry the right to vote at general meetings of the Company, our board will convene an\nextraordinary general meeting and put the resolutions so requisitioned to a vote at such meeting. However, shareholders may propose only\nordinary resolutions to be put to a vote at such meeting and shall have no right to propose resolutions with respect to the election,\nappointment or removal of directors or with respect to the size of the board. Our second amended and restated memorandum and articles\nof association provide no other right to put any proposals before annual general meetings or extraordinary general meetings. Subject to\nregulatory requirements, our annual general meeting and any extraordinary general meetings must be called by not less than ten (10) clear\ndays’ notice prior to the relevant shareholders meeting and convened by a notice discussed below. Alternatively, upon the prior\nconsent of all holders entitled to attend and vote (with regards to an annual general meeting), and the holders of 95% in par value of\nthe shares entitled to attend and vote (with regard to an extraordinary general meeting), that meeting may be convened by a shorter notice\nand in a manner deemed appropriate by those holders.\n\n \n\nWe will give notice of each general\nmeeting of shareholders by publication on our website and in any other manner that we may be required to follow in order to comply with\nCayman Islands law, Nasdaq and SEC requirements. The holders of registered shares may be convened for a shareholders’ meeting by\nmeans of letters sent to the addresses of those shareholders as registered in our shareholders’ register, or, subject to certain\nstatutory requirements, by electronic means. We will observe the statutory minimum convening notice period for a general meeting of shareholders.\n\n \n\n92\n\n \n\n \n\nA quorum for a general meeting\nconsists of any one or more persons holding or representing by proxy not less than one-third (or 33 1/3%) in nominal of our total issued\nvoting shares entitled to vote upon the business to be transacted.\n\n \n\nA resolution put to the vote of\nthe meeting shall be decided on a poll. An ordinary resolution to be passed by the shareholders requires the affirmative vote of a simple\nmajority of the votes cast by, or on behalf of, the shareholders entitled to vote present in person or by proxy and voting at the meeting.\nA special resolution requires the affirmative vote of no less than two-thirds of the votes cast by the shareholders entitled to vote who\nare present in person or by proxy at a general meeting. Both ordinary resolutions and special resolutions may also be passed by a unanimous\nwritten resolution signed by all the shareholders of our company, as permitted by the Companies Act and our amended and restated memorandum\nand articles of association.\n\n \n\nOur second amended and restated\nmemorandum and articles of association provide that a special resolution shall be required to approve any amendments to any provisions\nof our second amended and restated memorandum and articles of association.\n\n \n\n**Transfers of Shares**\n\n \n\nSubject to any applicable restrictions\nset forth in our second amended and restated memorandum and articles of association, any of our shareholders may transfer all or a portion\nof their ordinary shares by an instrument of transfer in the usual or common form or in the form prescribed by Nasdaq or in any other\nform which our board of directors may approve. Our board of directors may, in its absolute discretion, refuse to register a transfer of\nany share that is not a fully paid up share to a person of whom it does not approve, or any share issued under any share incentive scheme\nfor employees upon which a restriction on transfer imposed thereby still subsists, and it may also, without prejudice to the foregoing\ngenerality, refuse to register a transfer of any share to more than four joint holders or a transfer of any share that is not a fully\npaid up share on which we have a lien. Our board of directors may also decline to register any transfer of any registered share unless:\na fee of such maximum sum as Nasdaq may determine to be payable or such lesser sum as the board of directors may from time to time require\nis paid to us in respect thereof; the instrument of transfer is in respect of only one class of shares; the ordinary shares transferred\nare fully paid and free of any lien; the instrument of transfer is lodged at the registered office or such other place at which the register\nof shareholders is kept (i.e., our transfer agent), accompanied by any relevant share certificate(s) and/or such other evidence as the\nboard of directors may reasonably require to show the right of the transferor to make the transfer; and if applicable, the instrument\nof transfer is duly and properly stamped.\n\n \n\nIf our board of directors refuse\nto register a transfer, they are required, within one month after the date on which the instrument of transfer was lodged, to send to\nthe transferee notice of such refusal.\n\n \n\n**Calls on Ordinary Shares\nand Forfeiture of Ordinary Shares**\n\n \n\nSubject to the terms of allotment,\nour board may from time to time make calls upon our shareholders for any amounts unpaid on their shares (whether in respect of nominal\nvalue or premium) in a notice served to such shareholders at least 14 clear days prior to the specified time and place of payment. The\nshares that have been called upon and remain unpaid are, after a notice period, subject to forfeiture.\n\n \n\n**Variations of Rights of\nShares**\n\n \n\nWhenever our capital is divided\ninto different classes the rights attached to any such class may, subject to any rights or restrictions for the time being attached to\nany class, only be varied with the consent in writing of the holders of two-thirds of all of the issued shares of that class or with the\nsanction of a resolution passed by a majority of two-thirds of the votes cast at a separate meeting of the holders of the shares of that\nclass. The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise\nexpressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation, allotment or issue of further\nshares ranking pari passu with such existing class of shares.\n\n** **\n\n**Directors**\n\n \n\n**Appointment, Disqualification and Removal of\nDirectors**\n\n \n\nOur management is vested in a board\nof directors.\n\n \n\nOur directors shall be appointed\nand removed by an ordinary resolution of our shareholders. Without prejudice to our power to appoint a person to be a director by ordinary\nresolution and subject to the second amended and restated memorandum and articles of association, any vacancies on the board arising other\nthan upon the removal of a director by ordinary resolution can be filled by the remaining director(s). Any such appointment shall be as\nan interim director to fill such vacancy until the next general meeting (and such appointment shall terminate at the commencement of such\ngeneral meeting).\n\n \n\n93\n\n \n\n \n\nIn addition, a director will cease\nto be a director if he (i) becomes prohibited by law from being a director; (ii) becomes bankrupt or makes any arrangement or composition\nwith his creditors generally; (iii) dies or is, in the opinion of all his co-directors, incapable by reason of mental disorder of discharging\nhis duties as director; (iv) resigns his office by notice to us; (v) has for more than six months been absent without permission of the\ndirectors from meetings of directors held during that period and the directors resolve that his office be vacated. Our officers are appointed\nby and serve at the discretion of the board of directors, and may be removed by the board of directors.\n\n \n\nNo shareholding qualification shall\nbe required for a Director.\n\n \n\nThere is no age limit for directors\nof the Company.\n\n \n\nIn the case of an equality of votes\non any matter arising at any meeting of the directors, the chairperson of the board of directors shall exercise a second or casting vote.\n\n \n\n**Borrowing Power of Directors**\n\n \n\nThe board may exercise all the powers\nof the Company to raise capital or borrow money and to mortgage or charge all or any part of the undertaking, property and assets (present\nand future) and uncalled capital of the Company and, subject to the Companies Act, to issue debentures, bonds and other securities, whether\noutright or as collateral security for any debt, liability or obligation of the Company or of any third party.\n\n \n\n**Directors’ Interests**\n\n \n\nA director must disclose any material\ninterest pursuant to our second amended and restated memorandum and articles of association, and such director may not vote at any meeting\nof directors or of a committee of directors on any resolution concerning a matter in which he has, directly or indirectly, an interest\nor duty. The director shall be counted in the quorum present at a meeting when any such resolution is under consideration and such resolution\nmay be passed by a majority of the disinterested directors present at the meeting even if such disinterested directors together constitute\nless than a quorum.\n\n \n\n**Liquidation**\n\n \n\nSubject to any special rights,\nprivileges or restrictions as to the distribution of available surplus assets on liquidation applicable to any class or classes of shares\n(1) if we are wound up and the assets available for distribution among our shareholders are more than sufficient to repay the whole of\nthe capital paid up at the commencement of the winding up, the excess shall be distributed pari passu among our shareholders in proportion\nto the amount paid up at the commencement of the winding up on the shares held by them, respectively, and (2) if we are wound up and the\nassets available for distribution among our shareholders as such are insufficient to repay the whole of the paid-up capital, those assets\nshall be distributed so that, as nearly as may be, the losses shall be borne by our shareholders in proportion to the capital paid up,\nor which ought to have been paid up, at the commencement of the winding up on the shares held by them, respectively.\n\n \n\nIf we are wound up, the liquidator\nmay with the sanction of a special resolution and any other sanction required by the Companies Act, divide among our shareholders in specie\nthe whole or any part of our assets and may, for such purpose, value any assets and determine how such division shall be carried out as\nbetween the shareholders or different classes of shareholders. The liquidator may also, with the sanction of a special resolution, vest\nany part of these assets in trustees upon such trusts for the benefit of our shareholders as the liquidator shall think fit, but so that\nno shareholder will be compelled to accept any assets, shares or other securities upon which there is a liability.\n\n \n\n94\n\n \n\n \n\n**Anti-Takeover Provisions**\n\n \n\nSome provisions of our amended\nand restated memorandum and articles of association may discourage, delay or prevent a change of control of our company or management\nthat shareholders may consider favorable, including provisions that authorize our board of directors to issue preferred shares in one\nor more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further\nvote or action by our shareholders.\n\n \n\n**Inspection of Books and Records**\n\n \n\nHolders of ordinary shares have\nno general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records (other than\nthe memorandum and articles of association, the register of mortgages and charges, and special resolutions of our shareholders). Our directors\nhave discretion under our second amended and restated memorandum and articles of association to determine whether or not, and under what\nconditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders\nunless required by the Companies Act, Nasdaq rules, or other applicable law or authorized by the directors or by ordinary resolution.\n\n \n\n**Register of Shareholders**\n\n \n\nUnder Cayman Islands law, we must\nkeep a register of shareholders that includes: the names and addresses of the shareholders, a statement of the shares held by each member,\nand of the amount paid or agreed to be considered as paid, on the shares of each member; the date on which the name of any person was\nentered on the register as a member; and the date on which any person ceased to be a member.\n\n \n\n**Exempted Company**\n\n \n\nWe are an exempted company with\nlimited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies.\nAny company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered\nas an exempted company. An exempted company:\n\n \n\n \n●\ndoes not have to file an annual return of its shareholders with the Registrar of Companies;\n\n \n\n \n●\nis not required to open its register of members for inspection;\n\n \n\n \n●\ndoes not have to hold an annual general meeting;\n\n \n\n \n●\nmay issue shares with no par value;\n\n \n\n \n●\nmay obtain an undertaking against the imposition of any future taxation;\n\n \n\n \n●\nmay register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;\n\n \n\n \n●\nmay register as a limited duration company; and\n\n \n\n \n●\nmay register as a segregated portfolio company.\n\n \n\n“Limited liability”\nmeans that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company (except in\nexceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other\ncircumstances in which a court may be prepared to pierce or lift the corporate veil).\n\n \n\n95\n\n \n\n**Preferred Shares**\n\n \n\nOur board of directors is empowered\nto designate and issue from time to time one or more classes or series of preferred shares and to fix the designations, powers, preferences\nand relative, participating, optional and other rights, if any, and the qualifications, limitations and restrictions thereof, if any,\nincluding, without limitation, the number of shares constituting each such class or series, dividend rights, conversion rights, redemption\nprivileges, voting powers, full or limited or no voting powers, and liquidation preferences, and to increase or decrease the size of any\nsuch class or series (but not below the number of shares of any class or series of preferred shares then outstanding) to the extent permitted\nby the Companies Act (As Revised) of the Cayman Islands.\n\n \n\n**C. Material Contracts**\n\n \n\nWe have not entered into any material\ncontracts other than in the ordinary course of business and other than those described in “Item 4. Information on the Company”\nor elsewhere in this annual report on Form 20-F.\n\n \n\n**D. Exchange Controls**\n\n \n\nSee “Item 4. Information\non the Company-B. Business Overview-Regulations-Regulations on Foreign Exchange Foreign Currency Exchange” and “Item 4. Information\non the Company-B. Business Overview-Dividend Distributions.”\n\n \n\n**E. Taxation**\n\n \n\nThe following summary of the material\nCayman Islands, PRC and U.S. federal income tax consequences of an investment in our ordinary shares is based upon laws and relevant interpretations\nthereof in effect as of the date of this annual report, all of which are subject to change. This summary does not deal with all possible\ntax consequences relating to an investment in our ordinary shares, such as the tax consequences under U.S. state and local tax laws or\nunder the tax laws of jurisdictions other than the Cayman Islands, the People’s Republic of China and the United States.\n\n \n\n**Material U.S. Federal Income Tax Considerations\nfor U.S. Holders**\n\n \n\nThe following discussion describes\nthe material U.S. federal income tax consequences relating to the ownership and disposition of our ordinary shares by U.S. Holders (as\ndefined below). This discussion applies to U.S. Holders that purchase our ordinary shares and hold such ordinary shares as capital assets.\nThis discussion is based on the U.S. Internal Revenue Code of 1986, as amended, U.S. Treasury regulations promulgated thereunder and administrative\nand judicial interpretations thereof, all as in effect on the date hereof and all of which are subject to change, possibly with retroactive\neffect. This discussion does not address all of the U.S. federal income tax consequences that may be relevant to specific U.S. Holders\nin light of their particular circumstances or to U.S. Holders subject to special treatment under U.S. federal income tax law (such as\ncertain financial institutions, insurance companies, dealers or traders in securities or other persons that generally mark their securities\nto market for U.S. federal income tax purposes, tax-exempt entities or governmental organizations, retirement plans, regulated investment\ncompanies, real estate investment trusts, grantor trusts, brokers, dealers or traders in securities, commodities, currencies or notional\nprincipal contracts, certain former citizens or long-term residents of the United States, persons who hold our ordinary shares as part\nof a “straddle,” “hedge,” “conversion transaction,” “synthetic security” or integrated\ninvestment, persons that have a “functional currency” other than the U.S. dollar, persons that own directly, indirectly or\nthrough attribution 10% or more of the voting power of our ordinary shares, corporations that accumulate earnings to avoid U.S. federal\nincome tax, partnerships and other pass-through entities, and investors in such pass-through entities). This discussion does not address\nany U.S. state or local or non-U.S. tax consequences or any U.S. federal estate, gift or alternative minimum tax consequences.\n\n \n\nAs used in this discussion, the\nterm “U.S. Holder” means a beneficial owner of our ordinary shares who is, for U.S. federal income tax purposes, (1) an individual\nwho is a citizen or resident of the United States, (2) a corporation (or entity treated as a corporation for U.S. federal income tax purposes)\ncreated or organized in or under the laws of the United States, any state thereof, or the District of Columbia, (3) an estate the income\nof which is subject to U.S. federal income tax regardless of its source or (4) a trust (x) with respect to which a court within the United\nStates is able to exercise primary supervision over its administration and one or more United States persons have the authority to control\nall of its substantial decisions or (y) that has elected under applicable U.S. Treasury regulations to be treated as a domestic trust\nfor U.S. federal income tax purposes.\n\n \n\n96\n\n \n\nIf an entity treated as a partnership\nfor U.S. federal income tax purposes holds our ordinary shares, the U.S. federal income tax consequences relating to an investment in\nsuch ordinary shares will depend in part upon the status and activities of such entity and the particular partner. Any such entity should\nconsult its own tax advisor regarding the U.S. federal income tax consequences applicable to it and its partners of the purchase, ownership\nand disposition of our ordinary shares.\n\n \n\nPersons considering an investment\nin our ordinary shares should consult their own tax advisors as to the particular tax consequences applicable to them relating to the\npurchase, ownership and disposition of our ordinary shares including the applicability of U.S. federal, state and local tax laws and non-U.S.\ntax laws.\n\n \n\n**Passive Foreign Investment Company Consequences**\n\n \n\nIn general, a corporation organized\noutside the United States will be treated as a PFIC for any taxable year in which either (1) at least 75% of its gross income is “passive\nincome”, or the PFIC income test, or (2) on average at least 50% of its assets, determined on a quarterly basis, are assets that\nproduce passive income or are held for the production of passive income, or the PFIC asset test. Passive income for this purpose generally\nincludes, among other things, dividends, interest, royalties, rents, and gains from the sale or exchange of property that gives rise to\npassive income. Assets that produce or are held for the production of passive income generally include cash, even if held as working capital\nor raised in a public offering, marketable securities, and other assets that may produce passive income. Generally, in determining whether\na non-U.S. corporation is a PFIC, a proportionate share of the income and assets of each corporation in which it owns, directly or indirectly,\nat least a 25% interest (by value) is taken into account.\n\n \n\nAlthough PFIC status is determined\non an annual basis and generally cannot be determined until the end of a taxable year, based\non the nature of our current and expected income and the current and expected value and composition of our assets, we do not presently\nexpect to be a PFIC for our current taxable year or the foreseeable future. However, there\ncan be no assurance given in this regard because the determination of whether we are or will become a PFIC is a fact-intensive inquiry\nmade on an annual basis that depends, in part, upon the composition of our income and assets. In addition, there can be no assurance that\nthe IRS will agree with our conclusion or that the IRS would not successfully challenge our position.\n\n \n\nIf we are a PFIC in any taxable\nyear during which a U.S. Holder owns our ordinary shares, the U.S. Holder could be liable for additional taxes and interest charges\nunder the “PFIC excess distribution regime” upon (1) a distribution paid during a taxable year that is greater than\n125% of the average annual distributions paid in the three preceding taxable years, or, if\nshorter, the U.S. Holder’s holding period\nfor our ordinary shares, and (2) any gain recognized on a sale, exchange or other disposition, including a pledge, of our ordinary shares,\nwhether or not we continue to be a PFIC. Under the PFIC excess distribution regime, the tax on such distribution or gain would be determined\nby allocating the distribution or gain ratably over the U.S. Holder’s holding period\nfor our ordinary shares. The amount allocated to the current taxable year (i.e., the year in which the distribution occurs or the gain\nis recognized) and any year prior to the first taxable year in which we are a PFIC will be taxed as ordinary income earned in the current\ntaxable year. The amount allocated to other taxable years will be taxed at the highest marginal\nrates in effect for individuals or corporations, as applicable, to ordinary income\nfor each such taxable year, and an interest charge,\ngenerally applicable to underpayments of tax, will be added to the tax.\n\n \n\nIf we are a PFIC for any year during\nwhich a U.S. Holder holds our ordinary shares, we must generally continue to be treated as a PFIC by that holder for all succeeding years\nduring which the U.S. Holder holds such ordinary shares, unless we cease to meet the requirements for PFIC status and the U.S. Holder\nmakes a “deemed sale” election with respect to our ordinary shares. If the election is made, the U.S. Holder will be deemed\nto sell our ordinary shares it holds at their fair market value on the last day of the last taxable year in which we qualified as a PFIC,\nand any gain recognized from such deemed sale would be taxed under the PFIC excess distribution regime. After the deemed sale election,\nthe U.S. Holder’s ordinary shares would not be treated as shares of a PFIC unless we subsequently become a PFIC.\n\n \n\n97\n\n \n\n \n\nIf we are a PFIC for any taxable\nyear during which a U.S. Holder holds our ordinary shares and one of our non-United States subsidiaries is also a PFIC (i.e., a lower-tier\nPFIC), such U.S. Holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC and would be\ntaxed under the PFIC excess distribution regime on distributions by the lower-tier PFIC and on gain from the disposition of shares of\nthe lower-tier PFIC even though such U.S. Holder would not receive the proceeds of those distributions or dispositions. Any of our non-United\nStates subsidiaries that have elected to be disregarded as entities separate from us or as partnerships for U.S. federal income tax purposes\nwould not be corporations under U.S. federal income tax law and accordingly, cannot be classified as lower-tier PFICs. However, non-United\nStates subsidiaries that have not made the election may be classified as a lower-tier PFIC if we are a PFIC during your holding period\nand the subsidiary meets the PFIC income test or PFIC asset test. Each U.S. Holder is advised to consult its tax advisors regarding the\napplication of the PFIC rules to any of our non-United States subsidiaries.\n\n \n\nIf we are a PFIC, a U.S. Holder\nwill not be subject to tax under the PFIC excess distribution regime on distributions or gain recognized on our ordinary shares if a valid\n“mark-to-market” election is made by the U.S. Holder for our ordinary shares. An electing U.S. Holder generally would take\ninto account as ordinary income each year, the excess of the fair market value of our ordinary shares held at the end of such taxable\nyear over the adjusted tax basis of such ordinary shares. The U.S. Holder would also take into account, as an ordinary loss each year,\nthe excess of the adjusted tax basis of such ordinary shares over their fair market value at the end of the taxable year, but only to\nthe extent of the excess of amounts previously included in income over ordinary losses deducted as a result of the mark-to-market election.\nThe U.S. Holder’s tax basis in our ordinary shares would be adjusted to reflect any income or loss recognized as a result of the\nmark-to-market election. Any gain from a sale, exchange or other disposition of our ordinary shares in any taxable year in which we are\na PFIC would be treated as ordinary income and any loss from such sale, exchange or other disposition would be treated first as ordinary\nloss (to the extent of any net mark-to-market gains previously included in income) and thereafter as capital loss. If, after having been\na PFIC for a taxable year, we cease to be classified as a PFIC because we no longer meet the PFIC income or PFIC asset test, the U.S.\nHolder would not be required to take into account any latent gain or loss in the manner described above and any gain or loss recognized\non the sale or exchange of the ordinary shares would be classified as a capital gain or loss.\n\n \n\nA mark-to-market election is available\nto a U.S. Holder only for “marketable stock.” Generally, stock will be considered marketable stock if it is “regularly\ntraded” on a “qualified exchange” within the meaning of applicable U.S. Treasury regulations. A class of stock is regularly\ntraded during any calendar year during which such class of stock is traded, other than in de minimis quantities, on at least 15 days during\neach calendar quarter.\n\n \n\nOur ordinary shares will be marketable\nstock as long as they remain listed on the Nasdaq Capital Market and are regularly traded. A mark-to-market election will not apply to\nthe ordinary shares for any taxable year during which we are not a PFIC, but will remain in effect with respect to any subsequent taxable\nyear in which we become a PFIC. Such election will not apply to any of our non-U.S. subsidiaries. Accordingly, a U.S. Holder may continue\nto be subject to tax under the PFIC excess distribution regime with respect to any lower-tier PFICs notwithstanding the U.S. Holder’s\nmark-to-market election for the ordinary shares.\n\n \n\nThe Cayman Islands currently have\nno form of income, corporate or capital gains tax and no estate duty, inheritance tax or gift tax. There are currently no Cayman Islands’\ntaxes or duties of any nature on gains realized on a sale, exchange, conversion, transfer or redemption of the ordinary shares. Payments\nof dividends and capital in respect of the ordinary shares will not be subject to taxation in the Cayman Islands and no withholding will\nbe required on the payment of interest and principal or a dividend or capital to any holder of the ordinary shares, nor will gains derived\nfrom the disposal of the ordinary shares be subject to Cayman Islands income or corporation tax as the Cayman Islands currently have no\nform of income or corporation taxes.\n\n \n\nThe tax consequences that would\napply if we are a PFIC would also be different from those described above if a U.S. Holder were able to make a valid qualified electing\nfund, or QEF, election. As we do not expect to provide U.S. Holders with the information necessary for a U.S. Holder to make a QEF election,\nprospective investors should assume that a QEF election will not be available.\n\n \n\n98\n\n \n\n \n\n**The U.S. federal income tax\nrules relating to PFICs are very complex. Prospective U.S. investors are strongly urged to consult their own tax advisors with respect\nto the impact of PFIC status on the purchase, ownership and disposition of our ordinary shares, the consequences to them of an investment\nin a PFIC, any elections available with respect to the ordinary shares and the IRS information reporting obligations with respect to the\npurchase, ownership and disposition of ordinary shares of a PFIC.**\n\n \n\n**Distributions**\n\n \n\nSubject to the discussion above\nunder “Item 10. Additional Information-E. Taxation-Passive Foreign Investment Company Consequences,” a U.S. Holder that receives\na distribution with respect to our ordinary shares generally will be required to include the gross amount of such distribution in gross\nincome as a dividend when actually or constructively received to the extent of the U.S. Holder’s pro rata share of our current and/or\naccumulated earnings and profits (as determined under U.S. federal income tax principles). To the extent a distribution received by a\nU.S. Holder is not a dividend because it exceeds the U.S. Holder’s pro rata share of our current and accumulated earnings and profits,\nit will be treated first as a tax-free return of capital and reduce (but not below zero) the adjusted tax basis of the U.S. Holder’s\nordinary shares. To the extent the distribution exceeds the adjusted tax basis of the U.S. Holder’s ordinary shares, the remainder\nwill be taxed as capital gain. Because we may not account for our earnings and profits in accordance with U.S. federal income tax principles,\nU.S. Holders should expect all distributions to be reported to them as dividends.\n\n \n\nDistributions on our ordinary shares\nthat are treated as dividends generally will constitute income from sources outside the United States for foreign tax credit purposes\nand generally will constitute passive category income. Such dividends will not be eligible for the “dividends received’’\ndeduction generally allowed to corporate shareholders with respect to dividends received from U.S. corporations. Dividends paid by a “qualified\nforeign corporation’’ to certain non-corporate U.S. Holders may be are eligible for taxation at a reduced capital gains rate\nrather than the marginal tax rates generally applicable to ordinary income provided that a holding period requirement (more than 60 days\nof ownership, without protection from the risk of loss, during the 121-day period beginning 60 days before the ex-dividend date) and certain\nother requirements are met. Each U.S. Holder is advised to consult its tax advisors regarding the availability of the reduced tax rate\non dividends to its particular circumstances. However, if we are a PFIC for the taxable year in which the dividend is paid or the preceding\ntaxable year (see discussion above under “Item 10. Additional Information-E. Taxation-Passive Foreign Investment Company Consequences’’),\nwe will not be treated as a qualified foreign corporation, and therefore the reduced capital gains tax rate described above will not apply.\n\n \n\nDividends will be included in a\nU.S. Holder’s income on the date of the depositary’s receipt of the dividend. The amount of any dividend income paid in Cayman\nIslands dollars will be the U.S. dollar amount calculated by reference to the exchange rate in effect on the date of receipt, regardless\nof whether the payment is in fact converted into U.S. dollars. If the dividend is converted into U.S. dollars on the date of receipt,\na U.S. Holder should not be required to recognize foreign currency gain or loss in respect to the dividend income. A U.S. Holder may have\nforeign currency gain or loss if the dividend is converted into U.S. dollars after the date of receipt.\n\n \n\nA non-United States corporation\n(other than a corporation that is classified as a PFIC for the taxable year in which the dividend is paid or the preceding taxable year)\ngenerally will be considered to be a qualified foreign corporation with respect to any dividend it pays on ordinary shares that are readily\ntradable on an established securities market in the United States.\n\n \n\n**Sale, Exchange or Other Disposition of Our Ordinary\nShares**\n\n \n\nSubject to the discussion above\nunder “Item 10. Additional Information-E. Taxation-Passive Foreign Investment Company Consequences’’ a U.S. Holder generally\nwill recognize capital gain or loss for U.S. federal income tax purposes upon the sale, exchange or other disposition of our ordinary\nshares in an amount equal to the difference, if any, between the amount realized (i.e., the amount of cash plus the fair market value\nof any property received) on the sale, exchange or other disposition and such U.S. Holder’s adjusted tax basis in the ordinary shares.\nSuch capital gain or loss generally will be long-term capital gain taxable at a reduced rate for non-corporate U.S. Holders or long-term\ncapital loss if, on the date of sale, exchange or other disposition, the ordinary shares were held by the U.S. Holder for more than one\nyear. Any capital gain of a non-corporate U.S. Holder that is not long-term capital gain is taxed at ordinary income rates. The deductibility\nof capital losses is subject to limitations. Any gain or loss recognized from the sale or other disposition of our ordinary shares will\ngenerally be gain or loss from sources within the United States for U.S. foreign tax credit purposes.\n\n \n\n99\n\n \n\n \n\n**Medicare Tax**\n\n \n\nCertain U.S. Holders that are individuals,\nestates or trusts and whose income exceeds certain thresholds generally are subject to a 3.8% tax on all or a portion of their net investment\nincome, which may include their gross dividend income and net gains from the disposition of our ordinary shares. If you are a United States\nperson that is an individual, estate or trust, you are encouraged to consult your tax advisors regarding the applicability of this Medicare\ntax to your income and gains in respect of your investment in our ordinary shares.\n\n \n\n**Information Reporting and Backup Withholding**\n\n \n\nU.S. Holders may be required to\nfile certain U.S. information reporting returns with the IRS with respect to an investment in our ordinary shares, including, among others,\nIRS Form 8938 (Statement of Specified Foreign Financial Assets). As described above under “Item 10. Additional Information-E. Taxation-Passive\nForeign Investment Company Consequences”, each U.S. Holder who is a shareholder of a PFIC must file an annual report containing\ncertain information. U.S. Holders paying more than $100,000 for our ordinary shares may be required to file IRS Form 926 (Return by a\nU.S. Transferor of Property to a Foreign Corporation) reporting this payment. Substantial penalties may be imposed upon a U.S. Holder\nthat fails to comply with the required information reporting.\n\n \n\nDividends on and proceeds from\nthe sale or other disposition of our ordinary shares may be reported to the IRS unless the U.S. Holder establishes a basis for exemption.\nBackup withholding may apply to amounts subject to reporting if the holder (1) fails to provide an accurate U.S. taxpayer identification\nnumber or otherwise establish a basis for exemption, or (2) is described in certain other categories of persons. However, U.S. Holders\nthat are corporations generally are excluded from these information reporting and backup withholding tax rules.\n\n \n\nBackup withholding is not an additional\ntax. Any amounts withheld under the backup withholding rules generally will be allowed as a refund or a credit against a U.S. Holder’s\nU.S. federal income tax liability if the required information is furnished by the U.S. Holder on a timely basis to the IRS.\n\n \n\nU.S. Holders should consult their\nown tax advisors regarding the backup withholding tax and information reporting rules.\n\n \n\n**EACH PROSPECTIVE INVESTOR IS\nURGED TO CONSULT ITS OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES TO IT OF AN INVESTMENT IN OUR ORDINARY SHARES IN LIGHT OF THE INVESTOR’S\nOWN CIRCUMSTANCES.**\n\n \n\nProspective investors should consult\ntheir professional advisers on the possible tax consequences of buying, holding or selling any ordinary shares under the laws of their\ncountry of citizenship, residence or domicile.\n\n \n\nThe following is a discussion on\ncertain Cayman Islands income tax consequences of an investment in the ordinary shares. The discussion is a general summary of present\nlaw, which is subject to prospective and retroactive change. It is not intended as tax advice, does not consider any investor’s\nparticular circumstances, and does not consider tax consequences other than those arising under Cayman Islands law.\n\n \n\n**Cayman Islands Taxation**\n\n \n\nThe Cayman Islands currently levies\nno taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance\ntax or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp\nduties which may be applicable on instruments executed in, or brought within the jurisdiction of the Cayman Islands. In addition, the\nCayman Islands does not impose withholding tax on payments of dividends. There are no exchange control regulations or currency restrictions\nin the Cayman Islands.\n\n \n\n100\n\n \n\n \n\n**PRC Taxation**\n\n \n\nUnder the Enterprise Income Tax\nLaw, an enterprise established outside the PRC with a “de facto management body” within the PRC is considered a PRC resident\nenterprise for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide\nincome as well as tax reporting obligations. Under the Implementation Rules, a “de facto management body” is defined as a\nbody that has material and overall management and control over the manufacturing and business operations, personnel and human resources,\nfinances and properties of an enterprise.\n\n \n\nUnder the PRC Enterprise Income\nTax Law and its implementation rules, an enterprise established outside China with “de facto management body” within China\nis considered a resident enterprise. The implementation rules define the term “de facto management body” as the body that\nexercises full and substantial control and overall management over the business, productions, personnel, accounts and properties of an\nenterprise. In April 2009, the State Administration of Taxation issued a circular, known as Circular 82, which provides certain specific\ncriteria for determining whether the “de facto management body” of a PRC-controlled enterprise that is incorporated offshore\nis located in China. Although this circular only applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups,\nnot those controlled by PRC individuals or foreigners, the criteria set forth in the circular may reflect the State Administration of\nTaxation’s general position on how the “de facto management body” text should be applied in determining the tax resident\nstatus of all offshore enterprises. According to Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a\nPRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China only\nif all of the following conditions are met: (i) the primary location of the day-to-day operational management is in China; (ii) decisions\nrelating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel\nin China; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions,\nare located or maintained in China; and (iv) at least 50% of voting board members or senior executives habitually reside in China.\n\n \n\nSee Note 12 of the notes to the\nconsolidated financial statements included elsewhere in this annual report on Form 20-F for a discussion of taxation.\n\n \n\n**F. Dividends and Paying Agents**\n\n \n\nNot applicable.\n\n \n\n**G. Statement by Experts**\n\n \n\nNot applicable.\n\n \n\n**H. Documents on Display**\n\n \n\nWe previously filed with the SEC\nour registration statement on Form F-1 (Registration No. 333-252127), as amended, including the prospectus contained therein, to register\nour ordinary shares in relation to our initial public offering. As a “foreign private issuer,” we are subject to periodic\nreporting and other informational requirements of the Exchange Act that are applicable to foreign private issuers, and under those requirements\nfile reports and other information with the SEC, including annual reports on Form 20-F and reports on Form 6-K. Specifically, we are required\nto file annually a Form 20-F no later than four months after the close of each fiscal year.\n\n \n\nThe SEC maintains a website at\nhttp://www.sec.gov that contains reports, proxy and information statements and other information regarding issuers, like us, that file\nelectronically with the SEC.\n\n \n\nWe maintain a website at http://www.cdthb.cn.\nInformation contained on, or that can be accessed through, our website is not a part of, and shall not be incorporated by reference into,\nthis annual report on Form 20-F.\n\n \n\n**I. Subsidiary Information**\n\n \n\nFor information on our subsidiaries,\nsee “Item 4. Information on the Company-A. History and Development of the Company and C. Organizational Structure”, Note 1\nto our consolidated financial statements included in “Item 18. Financial Statements” and Exhibit 8.1 to this annual report.\n\n \n\n101"}