Special Note Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q, including the following “Management’s
Discussion and Analysis of Financial Condition and Results of Operations”,
contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Such statements include, among others, those concerning
our expected financial performance and strategic and operational plans, as well
as all assumptions, expectations, predictions, intentions or beliefs about
future events. You are cautioned that any such forward-looking statements are
not guarantees of future performance and that a number of risks and
uncertainties could cause actual results of the Company to differ materially
from those anticipated, expressed or implied in the forward-looking statements.
The words “believe”, “expect”, “anticipate”, “project”, “targets”, “optimistic”,
“intend”, “aim”, “will” or similar expressions are intended to identify
forward-looking statements. All statements other than statements of historical
fact are statements that could be deemed forward-looking statements. Risks and
uncertainties that could cause actual results to differ materially from those
anticipated include risks related to our potential inability to raise additional
capital; changes in domestic and foreign laws, regulations and taxes;
uncertainties related to China’s legal system and economic, political and social
events in China; Securities and Exchange Commission regulations which affect
trading in the securities of “penny stocks”; changes in economic conditions,
including a general economic downturn or a downturn in the securities markets;
and any of the factors and risks mentioned in the “Risk Factors” sections of our
Annual Report on Form 10-K for fiscal year ended December 31, 2021 and in Part
2, Item 1A of this Form 10-Q. The Company assumes no obligation and does not
intend to update any forward-looking statements, except as required by law.

COVID-19 Pandemic

In December 2019, an outbreak of COVID-19 was identified in China and was
subsequently recognized as a global pandemic by the World Health Organization
(“WHO”) on March 11, 2020. Since that time, COVID-19 has spread around the world
and throughout the United States, including in the regions and countries in
which we operate. Federal, state and local governments in the U.S and around the
world have imposed restrictions on travel and business operations and are
advising or requiring individuals to limit or eliminate time outside of their
homes. Temporary closures of businesses have also been ordered in certain
jurisdictions, and other businesses have temporarily closed voluntarily. These
actions expanded significantly in March and April of 2020 throughout the U.S.
Consequently, the COVID-19 outbreak has severely restricted the level of
economic activity in the U.S. and around the world.

The outbreak has resulted in authorities implementing numerous measures to try
to contain the virus, such as quarantines and shelter in place orders. These
measures may remain in place for a significant period of time and adversely
affect our business, operations and financial condition as well as the business,
operations and financial conditions of our business partners. The spread of the
virus has also caused us to modify our business practices (including employee
work locations and cancellation of physical participation in meetings) in ways
that may be detrimental to our business (including working remotely and its
attendant cybersecurity risks). We may take further actions as may be required
by government authorities or that we determine are in the best interests of our
employees. There is no certainty that such measures will be sufficient to
mitigate the risks posed by the virus or otherwise be satisfactory to government
authorities.

There has been no material adverse impact on the Company’s 2021 results of
operations to date. The effect of COVID-19 and related events, those not yet
known or knowable, could have a negative effect on the stock price, business
prospects, financial condition, and results of operations of the Company,
including as a result of quarantines, market volatility, market downturns and
business closures.

For the reasons discussed above, the Company cannot reasonably estimate with any
degree of certainty the future impact COVID-19 may have on the Company’s results
of operations, financial position, and liquidity. Notwithstanding any actions by
national, state, and local governments to mitigate the impact of COVID-19 or by
the Company to address the adverse impacts of COVID-19, there can be no
assurance that any of the foregoing activities will be successful in mitigating
or preventing significant adverse effects on the Company.

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Use of Terms

Except as otherwise indicated by the context, references in this report to:

l “BVI” are references to the British Virgin Islands;

l “China” and “PRC” are to the People’s Republic of China;

l the “Company”, “NCN”, “we”, “us”, or “our”, are references to Network CN Inc.,

a Delaware corporation and its direct and indirect subsidiaries: NCN Group

Limited, or NCN Group, a BVI limited company; NCN Media Services Limited, a BVI

limited company; NCN Group Management Limited, or NCN Group Management, a Hong

Kong limited company; Crown Winner International Limited, or Crown Winner, a

Hong Kong Limited company, and its subsidiary, and its variable interest

entity, Xingpin Shanghai Advertising Limited; Crown Eagle Investments Limited,

or Crown Eagle, a Hong Kong limited company, and its subsidiary, and its

variable interest entity, ChenXing (Beijing) Advertising Co., Ltd; NCN Group

(Global) Limited, or NCN Global, a Hong Kong limited company, and its

subsidiary, and its variable interest entity, Ruibo (Shenzhen) Advertising Co.,

Ltd; Cityhorizon Limited, or Cityhorizon Hong Kong, a Hong Kong limited

company, and its subsidiary, Huizhong Lianhe Media Technology Co., Ltd.,

or Lianhe, a PRC limited company; Chuanghua Shanghai advertising Limited, a PRC

limited company; NCN Huamin Management Consultancy (Beijing) Company Limited,

or NCN Huamin, a PRC limited company; and the Company’s variable interest

entity, Beijing Huizhong Bona Media Advertising Co., Ltd., or Bona, a PRC

limited company;

l “NCN Management Services” are references to NCN Management Services Limited, a

BVI limited company;

l “RMB” are to the Renminbi, the legal currency of China;

l the “Securities Act” are to the Securities Act of 1933, as amended; and the

“Exchange Act” are to the Securities Exchange Act of 1934, as amended; and

l “U.S. dollar”, “$” and “US$” are to the legal currency of the United States.

Overview of Our Business

Our mission is to become a nationwide leader in providing out-of-home
advertising in China, primarily serving the needs of branded corporate
customers. Our business direction to not just selling air-time for its media
panels but also started working closely with property developers in media
planning for the property at the very early stage. As a media planner we share
the advertising profits with the property developers without paying significant
rights fees, so we expect to achieve a positive return from these projects.

To address these unfavorable market conditions, we continue to implement
cost-cutting measures, including reductions in our workforce, office rentals,
selling and marketing related expenses and other general and administrative
expenses. We have also re-assessed the commercial viability of each of our
concession rights contracts and have terminated those of our concession rights
that we determined were no longer commercially viable due to high annual fees.
Management has also successfully negotiated some reductions in advertising
operating rights fees under remaining contracts.

For more information relating to our business, please refer to Part I, “Item 1 –
Business” of our Annual Report on Form 10-K for the fiscal year ended December
31, 2021.

Recent development

Issuance of Convertible Promissory Note

On January 18, 2022, the Company entered into a Subscription Agreement under
which the Subscriber agreed to purchase the 1% Senior Unsecured Convertible Note
Agreement from the Company for an agreement purchase price of two million five
hundred thousand US Dollars ($2,500,000). On the same date, the Company signed
the with 1% Senior Unsecured Convertible Note Agreement under which the Company
may sell and issue to the Subscriber up to an aggregate maximum amount of
$2,500,000 in principal amount of Convertible Notes prior to January 19, 2027.
The Convertible Promissory Notes issued to the Investor are convertible at the
holder’s option into shares of Company common stock at $1.25 per share.

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Exercise of conversion option

On October 28, 2021, Keywin Holdings Limited (“Keywin”) exercised its option to
purchase an aggregate of 11,764,756 shares of the Company’ common stock for an
aggregate purchase price of $2,000,000 which for setting off against the
Company’s obligation to repay part of the short-term loan interest payable,
there was no cash proceeds from the exercise of Keywin option.

Private Placement

On May 3, 2021, the Company entered into Common Stock Agreement with the foreign
investor (the “New investor”) that the Company will sell an aggregate of 200,000
shares of the Company’s common stock to the New investor. Pursuant to the terms
of a Common Stock Agreement between the Company and the New investor, the
purchase price paid by the New investor for the shares were $3 per share for an
aggregate sum of six hundred thousand U.S. dollars. The Company received
$459,077 cash proceeds from the investor and $140,923 was settled for the
interest payable of short-term loans.

Increase of authorized capital

On April 28, 2020, the Board of Directors and Majority of stockholders of the
Company approved to increase the total number of authorized shares of Common
Stock from 26,666,667 to 100,000,000,000. On October 11, 2021, we filed a
Certificate of Amendment to our Certificate of Incorporation with the Delaware
Secretary of State to increase our authorized shares of common stock from
26,666,667 to 100,000,000,000 and the increase had approved by Delaware
secretary of state on April 5, 2022

Identification of New projects

On January 14, 2020, the Company entered into a Letter of Intent with Earthasia
Worldwide Holdings Limited (“EWHL”) that the Company will acquire 100% of the
EWHL’s issued and outstanding stock owned by the shareholders of the EWHL and
the EWHL will become a wholly owned subsidiary of the Company.

On July 23, 2020, the Company entered into Share Exchange Agreement with Ease
Global Limited (“Ease Global”), the shareholder of Trade More Global Limited
(‘Trade More”) that the Company will purchase, One Thousand and One Hundred
(1,100) currently issued shares of common stock of Trade More from Ease Global
and in exchange for Forty-nine Million (49,000,000) shares of newly-issued
shares of common stock of the Company. The closing of the Exchange shall occur
on other date as agreed by the parties of the Share Exchange Agreement. Upon
completion of the Exchange, 78% of issued shares of common stock of the Company
shall be held by the Ease Global while all of the shares of capital stock of
Trade More shall be held by the Company. EWHL is a wholly owned subsidiary of
Trade More.

The closing of Exchange was not completed on September 2, 2020 which was due to
the progress of audit. Since Ease Global cannot fulfill the revenue target and
complete the audit, the Company considered the Share Exchange Agreement was
lapsed.

Results of Operations

The following results of operations is based upon and should be read in
conjunction with the Company’s unaudited consolidated financial statements and
the notes thereto included in Part I – Financial Information, “Item 1. Financial
Statement.” All amounts are expressed in U.S. dollars.

Comparison of Three Months Ended March 31, 2022 and March 31, 2021

General and Administrative Expenses – General and administrative expenses
primarily consist of compensation related expenses (including salaries paid to
executive and employees, employee bonuses and other staff welfare and benefits,
rental expenses, depreciation expenses, fees for professional services, travel
expenses and miscellaneous office expenses). General and administrative expenses
for the three months ended March 31, 2022 increased by 146.04% to $165,805, as
compared to $65,680 for the corresponding prior year period. The increase in
general and administrative expenses for the three months ended March 2022
compared to March 31, 2021 was due to increase in salary, depreciation of
right-of-use for Hong Kong office and consultancy fee.

Stock Based Compensation for services – Stock Based Compensation for services
for the three months ended March 31, 2022 was $24,000, compared to $nil for the
corresponding prior year period. The increase was mainly due to increase in
stock based compensation for directors’ service for the three months ended March
31, 2022.

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Interest and Other Debt-Related Expenses – Interest expense and other
debt-related expenses for the three months ended March 31, 2022 decreased to
$83,036, or by 36%, as compared to $129,953 for the corresponding prior year
period. The decrease was mainly due to the decreased in interest to short term
loan result from the conversion of short term loan to convertible note in early
2022.

Income Taxes – The Company derives all of its income in the PRC and is subject
to income tax in the PRC. No income tax was recorded during the three months
ended March 31, 2022 and 2021, because the Company and all of its subsidiaries
and variable interest entities operated at a taxable loss during the respective
periods.

Net Loss – The Company incurred a net loss of $272,841 for the three months
ended March 31, 2022, as compared to a net profit of $195,633 for the
corresponding prior year period. The result was driven by the decrease in gain
from write-off of long aged payables.

Liquidity and Capital Resources

As of March 31, 2022, we had cash of $1,546, as compared to $21,677 as of
December 31, 2021, a decrease of $20,131 which was due to settlement of office
expenses.

The following table sets forth a summary of our cash flows for the periods
indicated:



                                                             For the Three Months Ended
                                                       March 31, 2022         March 31, 2021
Net cash (used in)/provided by operating activities   $       (105,227 )     $             123
Net cash used in investing activities                           (1,078 )                     -
Net cash provided by financing activities                       86,174                       -
Effect of exchange rate changes on cash                              -                     (17 )
Net (decrease)/increase in cash                                (20,131 )                   106
Cash, beginning of period                                       21,677                   5,967
Cash, end of period                                   $          1,546       $           6,073




Operating Activities

Net cash used in operating activities for the three months ended March 31, 2022
was $105,227, as compared to net cash provided by operating activities amounting
to $123 for the corresponding prior year period. This was mainly attributable
to increase in repayment for accounts payable during the three months ended
March 31, 2021.

Our cash flow projections indicate that our current assets and projected
revenues from our existing project will not be sufficient to fund operations
over the next twelve months. This raises substantial doubt about our ability to
continue as a going concern. We intend to rely on the issuance of additional
equity and debt securities as well as on our note holders’ exercise of their
conversion option to convert our notes to our common stock, in order to fund our
operations. However, it may be difficult for us to raise funds in the current
economic environment. We cannot give assurance that we will be able to generate
sufficient revenue or raise new funds, and our note holders will exercise their
conversion option before the note is due. In any such case, we may not be able
to continue as a going concern.

Investing Activities

Net cash used in investing activities for the three months ended March 31, 2022
was $1,078 from the purchase of office equipment.

Financing Activities

Net cash provided by financing activities was $86,174 for the three months ended
March 31, 2022, as compared to $nil for the corresponding prior year period. The
increase was mainly due to proceeds from short term loans during the three
months ended March 31, 2022.

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Short-term Loan

As of March 31, 2022 and December 31, 2021, the Company recorded an aggregated
amount of $1,054,385 and $2,973,211 of short-term loans, respectively. Those
loans were borrowed from a shareholder and an unrelated individual. Except for
loan of $128,205 from an unrelated individual that are unsecured, bearing yearly
interest of 1% and are repayable on demand, the remaining loans are unsecured,
bear a monthly interest of 1.5% and are repayable on demand. However, according
to the agreement, the Company shall have the option to shorten or extend the
life of those short-term loans if the need arises and the Company has agreed
with the lender to extend the short-term loans on the due date. On January 18,
2022, the Company issued convertible notes of US$2,500,000 which is for setting
off against the short-term loans and interest payable. As of the date of this
report, the balance of $1,054,385 have not yet been repaid.

Capital Expenditures

During the three months ended March 31, 2022, we acquired office equipment of
$1,078.

Contractual Obligations and Commercial Commitments

The following table presents certain payments due under contractual obligations
with minimum firm commitments as of March 31, 2022:

                                                 Payments due by period
                                         Due in          Due in          Due in
                          Total           2022          2023-2024      2024-2025      Thereafter

Debt Obligations (a) $ 645,000 $ – $ – $ 645,000 $ –
Debt Obligations (a) 2,500,000

               -               -              -       2,500,000
Short Term Loan (b)    $ 1,054,385     $ 1,054,385     $         -     $        -               -

(a) Debt Obligations. We issued an aggregate of $645,000 in 1% Convertible
Promissory Notes in January 2020 and such 1% Convertible Promissory Notes
matured in January 2025 and we issued an aggregate of $2,500,000 in 1%
Convertible Promissory Notes in January 2022 and such 1% Convertible Promissory
Notes matured in January 2027.. For details, please refer to the Note 7 of the
consolidated financial statements.

(b) Short Term Loan. We have entered into short-term loan agreements with
unrelated individuals. Those loans with an aggregate amount of $926,178 are
unsecured, bear a monthly interest of 1.5% and shall be repayable in one month
and loan with an aggregate amount of $128,205 is unsecured, bear a yearly
interest of 1% and shall be repayable in one month. However, according to the
agreement, the Company shall have the option to shorten or extend the life of
those short-term loans if the need arises and the Company has agreed with the
lender to extend the short-term loans on the due date. Up to the date of this
report, those loans have not yet been repaid.

Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in
effect. These pronouncements did not have any material impact on the
consolidated financial statements unless otherwise disclosed, and we do not
believe that there are any other new accounting pronouncements that have been
issued that might have a material impact on our financial position or results of
operations.

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that are material to our investors.

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