China Trustful Group Limited entered into a non-legally binding memorandum of understanding (the "MOU") with Zuver X-Sportain Holdings Limited ("Zuver X-Sportain") in relation to, among other things, the proposed formation of a joint venture company (the "Proposed Joint Venture") for the purpose conducting, operating, promoting and investing into China Endurance Series Motorsport Racing events and projects. Pursuant to the MOU, it is agreed that the shareholding ratio of the Proposed Joint Venture, if established, shall be 60% to the Company and 40% to Zuver X-Sportain. Zuver X-Sportain undertakes to satisfy the consideration by granting and licensing the Business to the Proposed Joint Venture. The Company shall deliver to the Proposed Joint Venture an unconditional application in writing for the allotment to it for cash of 60% shareholding, such application being accompanied by a banker's draft for HKD 18,000,000. The MOU was intended to record the preliminary mutual understanding between the parties to the MOU and to serve as a platform for further negotiations and no legally binding agreement in relation to the Proposed Joint Venture has been entered into by the relevant parties.