Washington, D. C. Securities and Exchange CommissionC. 20549FORM 10-K(Mark One) Annual Report submitted under Section 13 or 15 (d) According to Section 13 or 15, the transition report of the Securities Trading Act of fiscal 1934 31 and 2018 (d) 1934 Commission File Number: 001-securities trading law China steel partner Holding Co. , Ltd. P. ( The exact name of the registrant specified in the articles of association)Delaware13-3727655( Registration status)(I. R. S. Employer identity number) New York, New York 590, 32 Madison Avenue ( Main executive office address)(Zip code) The registrant\'s telephone number, including the area code :(212)520- 2300 securities registered under article 12 (b) Key points of the act: each exchange name for each class of registered public units, the price of the New York Stock Exchange registered under section 12th is $0 (g) Part of the act: ordinary units, if the registrant is a well, no par value is indicated by a check mark Well-known experienced issuers as defined in Rule 405 of the Securities Act. If the registrant does not need to submit a report under Section 13 or Section 15, please indicate by check mark (d)of the Act. Indicate by check mark whether the registrant is :(1) All reports requested by Article 13 or 15 have been submitted (d) Securities Trading Act of 1934 within the first 12 months ( Or a short period of time required for the registrant to submit such reports), and (2) This filing requirement has been bound for the last 90 days. Indicate by check mark whether the registrant has electronically submitted each Interactive Data File as required under S-regulation 405thT (§232. This Chapter 405) Within the first 12 months ( Or within a shorter period of time when the registrant is required to submit such documents). Disclosure under S-Regulation section 405th whether the declarant in arrears is indicated by a check markK (§229. This Chapter 405) As the registrant is aware, it is not included here and will not be included in the final proxy or information statement referenced in Part 3 of this form -- K or any amendments to this form 10K. Indicate by check mark whether the registrant is a large accelerated declarant, a non-accelerated declarant A smaller reporting company, or an emerging growth company. See the definition of \"large accelerated reporting companies\", \"Small reporting companies\" and \"emerging growth companies\" in rule 12b 2 of the Trading Act. Big acceleration file Emerging growth company oif is an emerging growth company that indicates by check mark whether the registrant chooses not to use the extended transition period to comply with any new or revised financial accounting standards provided under section 13 (a) The Trading Act. Indicate whether the registrant is a shell company by check mark ( 12b-definition by rule 2 parts of the transaction law). Yes, the total market value of the units we hold together As of june30, the total number of affiliates of 2018 registrants was approximately $207. 1 million based on the time- Closing price. In February 27, 2019, a total of 788,667 ordinary units were outstanding. Referring to the information required in Part III of the included documents items 10, 11, 12, 13 and 14 will be incorporated by reference to certain parts of the final proxy statement, the registrant will submit within 120 days of the end of the fiscal year. Steel partner Holdings LimitedP. Table for CONTENTSPART IItem 1. Business 1A. Risk factor 1B. Unresolved employee reviews 2. Property item month. Legal action 4. Safety disclosure of mining disasters 5. Market for registrant common stock, related shareholder matters and issuer to purchase equity securities Selected Financial Data Items 7. Management Discussion and Analysis of operational financial status and results Quantitative and qualitative disclosure of market risks Financial statements and supplementary data items 9. Changes and disagreements with accountants on accounting and financial disclosure project 9A. Control and procedure 9B. Section IIIItem 10 of other information. Project 11. Director, executive officer and corporate governance. Item 12 of administrative compensation. Secured ownership of certain beneficial owners and management and related shareholders. Relationship with directors and related transactions. Main accounting expenses and service items 15. Annex, schedule 16 of the financial statements. Form 10- K summary signature used in this form 10- K, unless otherwise required by the context, the terms \"we\", \"SPLP\" and \"Company\" refer to steel partner Holdings Ltd. P. Delaware limited partnershipPART IFORWARD- This report includes \"forward-looking\" \"Statement of outlook within the meaning of Article 27A of the revised Securities Law of 1933 \"( Securities law) And article 21E of the Securities Trading Act of 1934 as amended (\"Exchange Act\") Especially forward- Title \"Item 7- Management Discussion and Analysis of Financial Position and operational results Financial statements and supplementary information. \"These statements appear in multiple locations in this report, including in relation to the company pair (i) Its financing plan ,(ii) Trends that affect their financial position or operating results, and (iii) The impact of competition. \"Expectation\", \"expectation\", \"intention\", \"plan\", \"believe\", \"seek\", \"estimate\" and similar expressions are designed to identify this forward Look at the report; However, the report also contains other In addition to historical information, reports can be viewed. Unless otherwise stated, all monetary amounts used in this section are thousand yuan. Item 1. Commercial Company splp is a diversified global holding company that owns and operates its business and has important interests in various industries including diversified industrial products, energy, defense, supply chain management and logistics, banking and youth sports. SPLP operates in a diverse range of industries, energy, financial services and companies and other sectors. Each of our companies has their own management team and has extensive experience in their industry. Our subsidiary Steel Services Co. , Ltd ( \"Steel Service \") Provide services to US and some of our companies by managing service agreements, including the allocation of C- Similar services such as law, taxation, accounting, finance, consulting, auditing, administration, compliance, environmental health and safety, human resources, marketing, investor relations, Operation Group management, etc. We work with our business to add company value to all stakeholders over the long term by implementing the unique strategy we discuss in more detail below. SPLP is managed by SP general affairs Co. , Ltd (\"Manager\") Under the terms of the amended and restated Management Agreement ( Management Agreement) Further detailed discussion in note 20-\"related party transactions\" to SPLP consolidated financial statements found elsewhere in this form 10K. Since its inception in 1990, the manager and its affiliates have been focused on adding value to the investors of the entities it manages. Our wholly- Subsidiary of steel partner Holding Co. , Ltd. ( [General partner] Our partner. The general partner has a board of directors ( \"Board of Directors \"). The board is currently composed of eight members, six of whom are elected annually by our union members, and two are appointed by the manager. Warren G. Lichtenstein, executive chairman of our manager, serves as executive chairman of the board. The diverse industrial sector of product and product mixing consists of engineering niche industrial product manufacturers, occupying a leading market position in many of the markets they serve. The business in this area distributes products to customers through its sales staff, external sales reps and distributors in North and South America, Europe, Australia, Asia and several other international markets. The following are other information related to the business within the diversified industrial sector. Connecting material- The main business of connecting materials is to make precious metals and their alloys into brazing alloys. Brazing alloys are used to connect similar and different metals, as well as special metals and some ceramics with strong sealing joints. Joining the material business provides metal joining products for a wide range of alloys, including gold, silver, palladium, copper, nickel, aluminum and tin. These brazing alloys are manufactured in a variety of engineering forms for use in many industries, including electrical, electrical, transport, construction and general industries where different materials and metal connection applications are required. The operating income of precious metal products mainly comes from \"value- \"Processed and manufactured\" is added instead of buying and reselling precious metals directly. Join the material business to enter into commodity futures and forward contracts to reduce the price fluctuations. Precious metal inventory not subject to fixed price contracts. We believe that our joining materials business is a leader in many of the markets it serves in North America. Tubing - All kinds of stainless steel and low carbon steel pipe products are produced by pipeline business. The pipeline business produces some of the world\'s longest continuous seamless stainless steel pipe coils, up to 6,000 feet, primarily serving the petrochemical and oil and gas infrastructure markets. In addition, it is precision, small size (less than 3 mm) Coil tubes of industry-leading specifications serving the aerospace, defense and healthcare markets. Pipe business is also a leading manufacturer of machinery and fluids It is used for welding low carbon pipes in different industries such as automobile, heavy truck, heating, cooling and oil and gas market. The product is delivered in coil, cutting or spool packaging style in a continuous length of 2 inch to 30,000 feet. Building materials The building materials business mainly manufactures and supplies products for commercial buildings and construction industries. It manufactures fasteners, adhesives and fastening systems for the United StatesS. commercial low- Slope Roof industry sold to wholesalers of building and roof materials, roofing contractors and manufacturers of private label roof systems, as well as a range of engineering professional fasteners in the construction products industry, for fastening applications in home, deck and landscape modifications and construction. We believe that our main business unit in building materials business is a market leader in commercial low-power fasteners and accessories The application of sloping roofs and most of the net sales of our building materials business are for the commercial building repair and replacement market. Performance Materials- Performance Materials business produces woven substrates for fiberglass, quartz, carbon and aromatic materials for special applications on a broad market that requires highly engineered components. Its products are widely used in various advanced composite applications such as civil and military aerospace components, printed electronic circuit boards, automotive and industrial components, and substrates for civil and military armor applications. Electronic products Commercial design, manufacture and market for power electronics, motion control, power protection, power quality electronic equipment and custom balls Screws, gears and gearboxes for a wide range of medical, commercial and military aerospace, computer, data communication, Industrial, Professional LED lighting, testing and measurement, and telecom applications. To improve operational performance, safety, reliability and efficiency, its products are generally integrated into larger systems. Kasco blade and line repair services (\"Kasco\")- Meat from Kasco business The meat and cooked food departments of supermarkets, restaurants, meat and fish processing plants, as well as room blade products, repair services and resale products for chainsaw and cutting equipment dealers, mainly in North America and Europe. Kasco business also provides cutting blades for bakeries, in addition to wood cutting blade products for Pallet manufacturing, pallet recyclers and portable sawmill industries in North America. Packaging - The packaging business produces and sells foil, film and laminate materials used to enhance the visual appeal of products and packaging. Laminated products and foil business for packaging and carton laminated products and foils for food and candy, tobacco, health and beauty, personal care, greeting cards, industries such as books, magazines, footwear, sporting goods, office and promotional goods. The packaging business includes Dunmore Corporation\'s business in the United States. S. Germany Dunmore Europe Limited ( \"Dunmore \") Acquired in February 2018. Dunmore produces and sells coating, lamination and metal film for imaging, aerospace, insulation and solar Photo engineering applications And offer products for custom and special applications. The energy sector provides drilling and production services for the oil and gas industry and has youth sports operations. Its parent company also has equity laws and other investments in some businesses. The following are other information related to the energy sector\'s consolidated operations. Steel Energy- Completion of energy business Provide completion and production services to exploration and production companies in oil and gas operations. Services provided include completion and completion, well maintenance and workover, non-pressure wells, flow testing, underground pumping, blockage and abandonment, logging and casing cable services. Steel Sports - The steel movement is an organization dedicated to providing first-class social impact The class youth sports experience emphasizes positive experiences, instilling core values of discipline, teamwork, safety, respect and integrity. Financial Services Sector 3 the financial services sector is mainly composed of the business of online banking. WebBank is the chartered Industrial Bank of Utah, which accepts the full supervision, review and supervision of federal deposit insurance companies (\"FDIC\") And the financial institutions department of Utah (\"UDFI\"). Web bank is not considered a \"bank\" for the purposes of the bank holding company law, and therefore, SPLP is not regulated as a bank holding company. WebBank deposits are insured by the FDIC. WebBank is engaged in a wide range of banking businesses, including loans, issuing credit cards and deposits subject to federal insurance. Web bank starts and finances consumer and small business loans through loan projects with non-affiliated companies that market and serve the project ( Marketing Partner] Where the marketing partner subsequently purchases the loan ( Or an interest in a loan) This was initiated by web bank. WebBank retains some of its loans to marketing partners. There are also private banks online. Plan a label financing plan for a brand for a specific retailer, manufacturer, dealer channel, proprietary network or bank card. WebBank\'s involvement in the Union of commerce, industry and assets Infrastructure and assets- Securitization through relationships with other financial institutions. The company and other divisions consist of several consolidated subsidiaries, including steel services, equity laws and other investments, as well as cash and cash equivalents. Its income or loss includes certain undistributed general company expenses. Steel Services has entered into management service agreements with our consolidated subsidiaries and other related companies. For more information on these service agreements, see Note 20- \"Related Transactions\" of SPLP consolidated financial statements found elsewhere in this form 10\"K. Business strategy we constantly assess the retention and disposition of existing businesses and investigate possible acquisitions of new businesses that typically focus on businesses that sell far below intrinsic value. We consider the synergies and economies of scale that may arise when operating and/or deciding to acquire or dispose of a company. We seek additional means to reduce costs and encourage business integration and establishment of business relationships between our companies, which is in line with our desire that our shareholders benefit from a diversified holding company structure We strive to strengthen our company\'s business operations through balance sheet improvements, strategic allocation of capital, and operational and growth plans, and to add company value to unit managers and stakeholders. We use a set of tools and processes called steel business systems to improve the operational and commercial efficiency of each of our businesses. The steel business system uses the strategic deployment process to execute strategic plans for each of our businesses to improve its performance, including goals related to manufacturing improvements, creative generation, product development, global sourcing of materials and services. Our operating plan includes improving efficiency through integrated procurement and material procurement provided by the steel partner procurement committee, which has arranged a shared procurement plan and reduced costs, and provide some of our companies for the following aspects. We are committed to centralising certain administrative and corporate services by providing steel services for management, consulting and consulting services, thereby reducing the company\'s corporate overhead. In general, we actively acquire and maintain control over the company by our ability to influence the company\'s policies. Depending on the size of our ownership interests in any given company, this can be achieved by obtaining board representation as well as overseeing and providing assistance to existing management teams. We usually think of our company. Holding for a long time, we want to achieve value by operating these companies in order to promote growth and maximize value, not by selling the benefits of ownership. The securities of some companies in our favor are traded on the National Stock Exchange, while others are privately held or not actively traded. The diversified business of customers in the industrial field is diversified in the industrial market and customers. Its business involves the construction, electrical, electronic, transportation, power control, utilities, medical, oil and gas exploration, aerospace and defense, consumer goods, packaging and food industries. During the period of 2018 and a half, no customer accounted for more than 10% of consolidated net sales in the diversified industrial sector. The 15 major customers of the diversified industrial sector accounted for about 28% of the net sales of the consolidated diversified industrial sector in 2018. The energy sector serves primarily customer mining and production operations in the Niobara basin in North Dakota and the Bakken Basin in Montana, Colorado and Wyoming, Texas in the Permian Basin and New Mexico in the San Juan Basin. It mainly relies on local businesses to sell and sell services. In2018 energy part have two customer is by 24% of net income highest month customer accounted for 73% and 70% of net income years endedDecember31 2018 and2017 respectively. 4 in the field of financial services, web bank mainly earns interest income from interest and expenses earned in loans and investments and earns Non-interest income The interest income mainly comes from the original cost of the loan, the cost income of the contract loan arrangement, the insurance premium for the loan sales and the loan service fee. In the past 31 years, 2018 and 7 years, the two highest-paid contract loan projects accounted for 29% and 40% of web bank\'s total revenue, respectively. The raw materials used by enterprises in the diversified industrial field are as follows: in addition to precious metals, connecting Materials, raw material construction materials used in pipes, electrical products and Kasco businesses are mainly made of stainless steel, silicon and carbon steel, aluminum, copper, tin, nickel alloy, various high Performance Alloys, permanent magnets, electronic and electrical components, chemicals and various plastic components. The raw materials used in the operation of the performance materials business mainly include fiberglass, quartz and grass yarn. The raw materials used in the packaging business mainly include cardboard, PET film, organic solvent, aluminum, resin, pigments and adhesives. Raw materials are generally purchased from domestic and foreign suppliers at open market prices. Diversified industrial sector enterprises have not encountered any major problems in obtaining the necessary quantity of raw materials. Prices and supplies, especially raw materials purchased from foreign suppliers, are affected by world market conditions and government policies. The raw materials used by these enterprises can usually be obtained from multiple sources. Businesses in our diverse industrial sector also need a lot of electricity, oil and gas to operate their facilities, and the prices of these goods will change. A shortage of electricity, oil or natural gas, or the government\'s allocation of supplies resulting in a general reduction in supply, may increase production costs and may lead to some cuts in production. Capital investment ssplp believes that in order to remain competitive, its business must constantly strive to increase revenue, increase productivity and product quality, and control and/or reduce manufacturing costs. Therefore, SPLP is expected to continue its capital investment in order to reduce overall manufacturing costs, improve the quality of products that produce and deliver services, and expand the range of products that are available to the industries it serves, replace equipment if necessary to maintain compliance with environmental, health and safety laws and regulations. SPLP\'s capital expenditures of 2018 and 2017 were $47,085 and $54,737, respectively. SPLP is expected to fund its capital expenditures in 2019 from funds generated from operations and loans. The company employs 2018 people and employs about 300 people worldwide. Of these employees, 550 participated in collective bargaining agreements, all in a diverse industrial sector. The Energy Department has also hired additional full-time employees. time and part- Time employees during seasonal peaks. There are many companies competing, whether large or small, whether domestic or foreign, to produce products or services provided by our enterprises. Some of these competitors are larger and have larger financial resources than our subsidiaries. Some of these competitors enjoy certain other competitive advantages, including greater visibility, greater finance, technology, marketing and other resources, greater customer base and good Build relationships with current and potential customers. Competition in the field of Diversified Industries is based on quality, technology, performance, service, reputation and price. in some industries, the introduction of new products. The energy business is a highly competitive industry affected by prices, capacity, reputation and experience. In an era of strong demand, competence, reputation and experience are the main competitive forces. At a time when demand is low, service providers will compete on prices to attract customers. In addition, they need to maintain a safe working environment and a good A well-trained workforce that remains competitive. Energy services are affected by seasonal factors such as bad weather, reduced daytime time, and winter holidays. Heavy snow, ice, wind or rain can make it difficult for equipment to operate and move between work locations, which may reduce its ability to provide services and generate revenue. These seasonal factors also affect competition. Since they have been running together for several years, members of our local business have built strong working relationships with some of their clients. These strong customer relationships provide a better understanding of the region So that we can better meet the needs of our customers. Baseball Facilities Services, football training camps and the league market for steel sports are very fragmented, with competitors mainly small businesses in the local or regional areas. Web bank competes with growing banks in a variety of business areas. We are bound by many American governments. S. Including laws and regulations related to environmental protection, labor, employment, workers\' health and safety, import and export, customs and customs duties, network security, intellectual property rights, privacy and protection of user data. Web bank is also subject to regulatory capital requirements managed by the FDIC and legal requirements related to consumer and commercial loan projects it initiates. These laws and regulations are constantly evolving and may be interpreted, applied, formulated or modified in a way that harms our business. We believe that we have complied with all of these laws and regulations in all material respects and that we have obtained all the important licenses and permits required to operate the business. For more information on regulatory risks, see information in Item 1A, Risk Factors, Part I of this report. Note 21-other information includes the amount of income attributable to the above-mentioned business unit, pre-tax income and identifiable assets, and other information on SPLP investments [Segment Information] Note 10- \"Investment\" of SPLP consolidated financial statements found elsewhere\"K. Our common unit is trading in New York securities so the symbol quote for \"SPLP. \"Our business address is 590 Madison Avenue, New York, zip code 10022. our phone number is (212)520-2300. Our website is www. steelpartners. com. Information contained in or accessible through the website is not part of this Form 10-K. This Form 10- Quarterly Report on table 10 Q: Current Report of Form 8 K, and all amendments to these reports, after these materials are submitted electronically to or provided to the United States, you can get them free of charge through our websiteS. Securities and Exchange Commission (\"SEC\"). Item 1A. Risk factors business faces many risks. Before you decide whether to purchase our generic or preferred equipment, you should carefully consider the following risk factors and all other information contained or referenced in this report. These factors do not represent a complete list that may affect our general or specific risks. It should be recognized that, at present or in the future, other risks may be significant, and the risks listed below may have a greater impact on us than expected. In the event of any of the following risks, our business, financial position and results of operations may be materially adversely affected. In this case, the transaction price of our common and preferred units may drop and you may lose all or part of your investment. The ranking of the risk factors listed below is not intended to reflect any indication of priority or possibility by the company. The risks associated with the business of our company\'s subsidiaries sponsor a clear benefit pension plan, which may result in the company requiring substantial cash funding in the future. The company\'s current operating cash flow requirements include the arrangement to fund the minimum requirements of its subsidiary\'s fixed-benefit pension plan. The company is jointly and severally liable with Handy & Harman Co. , Ltd. JPS Industries Holdings LLC is responsible for the underfunded pension liabilities of such subsidiaries. The performance of financial markets and interest rates, as well as health care trends and associated mortality, affects our fixed-benefit pension plan fees and funding obligations. Significant changes in these factors, including adverse changes in the discount rate, loss of investment in planned assets and increased life expectancy of participants, may increase our financial obligations and adversely affect our financial position The required future contributions are estimated on the basis of assumptions, such as the discount rate for future debt, the assumed yield of planned assets, and legislative changes. Actual future pension costs and required funding obligations will be affected by changes in factors and assumptions described in the previous sentence, as well as other changes, such as any planned termination or other acceleration events. See the \"Liquidity and Capital Resources\" section of this table 10- K for other information. 6 due to compliance with environmental laws or other extensive regulations that our business is complying with, including banking regulations, we may incur significant costs, including remedial costs. Our business is widely regulated by the United States. S. and non-U. S. Government and self Regulatory entities at the federal, state and local levels, including Corruption, environmental issues, privacy issues, banking, health and safety, import laws, export controls and economic sanctions, and the sale of products and services to government entities. Some of these laws and regulations deal with the treatment, storage and transportation of raw materials, products and wastes, as well as hazardous materials and wastes. Compliance with these requirements may make it necessary for us to carry out additional pollution modifications to existing facilities -- Control equipment, taking new measures in storage, transportation, handling and disposal Products and waste or take other steps that could cost our subsidiaries a lot. Although our subsidiaries provide insurance for certain environmental matters, they may incur significant costs, including cleaning costs, fines or sanctions, and third A party claims for loss of property or personal injury for breach of environmental law or liability for breach of environmental law. Any significant breach of these laws may result in a significant liability, a revocation of the discharge of the license, a fine or penalty, and any new laws, regulations and enforcement policies that may become more stringent, and significantly increase our compliance costs or limit our future business opportunities, negatively impacting our financial position, business and operational results. In addition, consumer and commercial loan programs provided by web bank are subject to extensive legal requirements at the federal and state levels, as described below. If WebBank or its projects do not comply with these laws, it may be subject to claims for damages, fines, penalties or other relief and may face regulatory review and enforcement actions, some violations may result in a potential loan being found to be invalid or unenforceable or subject to a payment defense. Many customers in our energy sector use hydraulic fracturing services, which is the process of generating or expanding cracks in the ground with water, pumping sand and other additives into the formation under high pressure. Although our energy sector is not a provider of fracking services, many of its services complement the fracking process. Fracking regulations vary greatly because they are regulated at the national level. Countries continue to assess fracturing activity and its impact on the environment. Legislation could be enacted to conduct broader federal regulation of fracking operations and to report and publicly disclose chemicals used during the fracturing process. In addition, the US Environmental Protection Agency, under the Safe Drinking Water Act, advocates federal regulators for certain hydraulic fracturing activities involving diesel. If additional regulations may be required for hydraulic fracturing activities, customer operations in our energy sector may be adversely affected, which may adversely affect our operational results. These are not the only rules that our business must abide. Failure to comply with these or any other regulations may result in civil and criminal, monetary and non- Fines, damage our reputation, damage our business, limit our ability to produce, import, export and sell products and services, and cancel sales to certain federal agencies, damage to our reputation and loss to our customers can lead us to pay a lot of legal and investigation fees. Compliance with these and other regulations may also require us to incur significant costs. The products and operations of our enterprises are often subject to the rules of industry standards organizations such as international standardized organizations (ISO) Failure to comply with these rules may result in revocation of the certification required to sell our products and services, otherwise it will adversely affect our financial position. WebBank operates in a highly regulated environment, and its loan programs are widely regulated by the federal and state. Ongoing legislative and regulatory actions may have a significant impact on our liquidity or financial position. Consumer and commercial loan programs offered by Web bank are subject to extensive legal requirements at both federal and state levels. Laws that may apply to parts or all projects provided by web bank include: Federal Truthin- The Loan Act and Regulation Z, enacted under the Act, require disclosure of loan terms to borrowers; the Dodd- Wall Street Reform and Consumer Protection Act\"Dodd-Frank Act\") The Federal Trade Commission Act and state laws prohibiting unfair, deceptive or abusive acts or practices; The federal Equal Credit Opportunity Act and Regulation B, enacted under the Act, prohibits discrimination in credit extensions based on age, race, color, gender, religion, marital status, national origin, obtaining public assistance or exercising any right under the Consumer Credit Protection Act; The Fair Credit Reporting Act manages the use of credit reports and reports information to the credit bureau, and limits the marketing of credit products through pre-tender based on credit reporting information; 7. The military civil relief act and the Military Lending Act provide rate restrictions and other requirements for the credit obligations of active military personnel and certain dependents; Federal and state laws on privacy and protection of notices of personal identifiable consumer information and data disclosure; The Bank Secrecy Act involves compliance Money laundering, customer due diligence and records- Maintain policies and procedures; And laws that govern the allowable interest rates and fees charged to borrowers. The Dodd- Frank Act signed into law in 2010 with the main purpose of reforming the financial regulatory framework and having an impact on all financial institutions, including web bank. The Dodd- Among other things, Frank Act has set up the Consumer Financial Protection Agency (\"CFPB\") With the Financial Stability Oversight Board, a number of federal banking regulators have been merged and corporate governance and executive compensation requirements have been increased. Signed in May 2018 to amend Dodd-for the law on economic growth, Regulatory Relief and Consumer Protection- The Frank act is in some ways, but many of the requirements of the Dodd Act The Frank bill is still in effect. The scope and complexity of this regulatory framework and other regulations increase the regulatory compliance burden of web bank and therefore increase its regulatory risk. If WebBank or its projects do not comply with these laws, it may be subject to claims for damages, fines, penalties or other relief and may face regulatory scrutiny. In addition, some violations may result in potential loans being found to be invalid or unenforceable or subject to a defense of payment. Any of these violations may result in liability to the web bank, although the web bank may have a right of compensation for certain claims. In addition, there may be restrictions on the ongoing or future business of WebBank. WebBank provides loan programs through relationships with marketing partners. WebBank and its marketing partners are supervised by FDIC and UDFI. The authority of FDIC and UDFI includes the ability to check web bank, marketing partners and projects. If FDIC and UDFI find any violations, they can also initiate enforcement actions against web bank and its marketing partners. These enforcement actions may result in increased monetary liability, compliance obligations, or restrictions on its ongoing and future operations for Internet banks. Other regulators, including the CFPB and the Federal Trade Commission (\"FTC\") Investigations and enforcement actions may be initiated against marketing partners in web bank. In 2018, the Federal Trade Commission launched such a law enforcement action against a marketing partner at web bank, which continues. These actions against marketing partners may increase the review by web bank\'s own regulators of the web bank business and may lead to increased risk of investigation or claim against web bank. The U. S. Congress and state legislatures, as well as federal and state regulators, constantly review bank laws, regulations and policies to address possible changes. We cannot predict whether additional legislation or regulations will be enacted and, if enacted, what impact will be made on our business, financial position or results of operations. Future cash flows from operations or financing may not be sufficient to enable the company to meet its obligations, which may have a significant adverse impact on its business, the financial position and results of the operation, and fluctuations in the credit market may affect our ability to refinance existing debt by borrowing funds or generating additional debt based on our existing credit line. There is no guarantee that if the financial performance of the company or its subsidiaries does not comply with the financial covenants set out in the applicable financing agreement, they will continue to receive credit lines. If the company or its subsidiaries do not comply with certain of its financial covenants and they are unable to obtain the necessary exemptions or other amendments from the corresponding lender in accordance with the terms acceptable to the management, their ability to obtain available credit lines may be limited, their respective lenders can expedite their debt obligations, and liquidity may be adversely affected. If the cash needs of the company or its subsidiaries are substantially more than expected, or if they do not substantially meet the business plan, or if there is an unexpected downturn in the product and service market of the company and its subsidiaries, the company or its subsidiaries may need to seek additional or alternative sources of financing. Future disruptions and fluctuations in credit market conditions may have a significant adverse effect on the ability of the company or its subsidiaries to repay their debts, since the terms at the time the debt is due are similar to our current credit facility, or take advantage of existing credit lines or take on additional debt if needed. Therefore, there is no guarantee that such financing can be provided or provided on acceptable conditions. Failure to generate sufficient cash flow from operations or financing may impair the liquidity of the company or its subsidiaries and may have a significant adverse effect on their business, financial position and results of operations. 8 our business strategy includes acquisition, which brings a lot of risks, including the risk of managing the transfer and the risk of increased cost, all of which may have a negative impact on the profitability of the company. Among other things, our business strategy includes strategic acquisitions and potential opportunistic acquisitions. This element of our strategy poses a number of risks, including management shifting attention from other business issues and the need to finance such acquisitions with additional equity and/or debt. In addition, once the acquisition is completed, there will be further risks, including: unexpected costs and liabilities of the acquisition enterprise, including environmental liabilities, which may have a significant adverse impact on our operating results; Absorb the difficulties of the acquisition business and prevent the expected benefits of the transaction from being realized or realized within the expected time frame; Negative impact of existing business relationships with suppliers and customers; Lost key employees of the acquisition business. If our acquisition strategy is not successful or the acquisition is not well integrated into our existing operations, the profitability of the company may be negatively affected. Our portfolio may suffer losses, which may adversely affect our operational results, financial position and liquidity. Part of our assets is made up of equity securities and other investments that are adjusted to fair value in each period. Adverse changes in economic conditions or setbacks specific to these companies, their operations or business models may lead to a decline in the value of these investments. This decline in value is mainly confirmed by net income or loss based on prevailing accounting principles generally accepted in the United States (\"U. S. GAAP\"). Any adverse changes in the financial market, resulting in a decline in the value of our investment, may lead to additional losses and may adversely affect our operating results, financial conditions and liquidity. Rising interest rates can have a negative impact on our investment and adversely affect our business, financial position, operating results and cash flow. In recent years, the U (\"Fed\") The target range of the federal funds rate has been gradually raised, and it is expected to increase next year. Generally speaking, as interest rates increase, borrowing costs increase, affecting our interest costs and our ability to make new investments in favorable conditions or at all. More generally, changes in interest rate fluctuations and floating interest rate loan credit spreads may have a negative impact on our investment and investment opportunities, and therefore, may have a return on our investment capital, our net investment income has a significant adverse effect on our net asset value and the market price of our securities. In addition, an increase in interest rates may make the payment of outstanding debts difficult or impossible. There is no guarantee that the Fed will raise interest rates at the gradual rate they originally proposed, nor will it guarantee that the Fed will make a reasonable decision on when to raise interest rates. An increase in interest rates may have a negative impact on our interest costs and investments, which may have a negative impact on our operating results, financial position and cash flow. As described more fully in Part II of this report, Item 7A, \"quantitative and qualitative disclosure of market risks\", part of web bank\'s revenue comes from the interest charged exceeding the interest paid. The interest rate earned by Web bank on assets and the interest rate paid by liabilities are usually stipulated in the contract for a period of time. Market interest rates change over time. As a result, as with most financial institutions, the results of the operation of web bank are affected by interest rate changes and their sensitivity to asset and liability interest rates. Web bank monitors and measures its risks to changes in interest rates to comply with applicable government regulations and to limit the risks that rising interest rates may have a negative impact on its operational results. However, there is no guarantee that the efforts of WebBank to limit interest rate risk will succeed if there is an adverse change in interest rates. Our businesses rely on and may rely on their intellectual property rights and licenses to use the intellectual property rights of others to gain a competitive advantage. If our business is unable to protect its own intellectual property rights, to obtain or retain a license to use the intellectual property rights of others, or if they infringe or allegedly infringe on the intellectual property rights of others, this can have a significant adverse effect on their financial position, business and operational results. The success of each of our businesses depends to a certain extent on the trademarks and patents they own, or their licenses to use other people\'s trademarks, proprietary technologies and manufacturing technologies. In addition to trademark and patent protection, these businesses rely on copyright, trade secrets, confidential procedures and contractual terms to protect their intellectual property rights. The steps they take to protect their intellectual property rights may not prevent third parties from using their intellectual property rights without authorization or from independently developing similar intellectual property rights. In addition, foreign laws may not be able to effectively protect the intellectual property rights of our enterprises. Preventing unauthorized use of proprietary information and intellectual property rights, as well as defending claims for unauthorized use of proprietary information or intellectual property rights of others, can be difficult, time -- Consuming and expensive may cause our businesses to take significant liability for damages and void their property rights. This unauthorized use may reduce or eliminate any competitive advantage in the development of our business, resulting in them losing sales or otherwise damaging their business. We do business outside the United States. S. This may expose us to additional risks that are often not related to companies operating only in the USS. We operate the business and the securities business or our own interests of companies outside the United States. S. These businesses have additional risks, including those associated with currency exchange, financial markets that are not as developed or effective as the United StatesS. , Lack of uniform accounting, auditing and financial reporting standards, differences in legal and regulatory environments, and different public information of unlisted companiesU. S. Market, economic and political risks and possible non-implementationU. S. taxes. There is no guarantee that the adverse development of these risks will not adversely affect the assets we hold in certain countries or the returns of these assets. We also face some inherent risks in our international operations, including compliance with international and US laws. S. Laws and regulations applicable to our international business. These laws and regulations include data privacy requirements, labor relations law, tax law Competition regulations, import and trade restrictions, United StatesS. Laws in other countries, such as export control laws and foreign corrupt practices laws, and similar laws, also prohibit the payment of corruption payments to government officials or the payment of certain payments or remuneration to customers. Given the high complexity of these laws, it is possible to inadvertently violate some of the provisions. In addition, we may take responsibility for the actions taken by our local partners. Violations of these laws and regulations may result in fines, criminal sanctions against us, our officers or employees, and a ban on our business conduct. Any such violation may include a ban on the provision of products and services in one or more countries. Recent and potential changes in the United StatesS. Trade policies and retaliatory responses from other countries may significantly increase the cost or limit supply of materials and products used in our business. The federal government recently imposed new or increased tariffs or duties on a range of imported materials and goods related to our business. Foreign governments, including China and Canada, and trade groups such as the EU (\"EU\") In response, the United States imposes or increases tariffs, tariffs and/or trade restrictions on the United StatesS. They are reportedly considering other measures. These trade conflicts and related government actions are constantly escalating, resulting in additional tariffs, tariffs and/or trade restrictions that may increase our operating costs, create disruptions or shortages in our supply chain and/or have a negative impact on the USS. Significant and adverse effects on our business and consolidated financial statements. Brexit could have a negative impact on our operating income and costs and therefore on our profitability. The referendum held in the United Kingdom on June 23, 2016 decided that the United Kingdom would withdraw from the EU. On March 2017, the United Kingdom government initiated the withdrawal process under Article 50 of the EU Treaty, and the United Kingdom and other EU member states began negotiating the withdrawal clause for a maximum period of two years. Uncertainties surrounding the timing, terms and consequences of the withdrawal of the United Kingdom may adversely affect our operations in the United Kingdom. Some of our facilities are located in the United Kingdom, which, together with other facilities in our network, source goods, manufacture goods and provide services from the United Kingdom. These facilities operate within the existing framework of trade and human capital integration with the EU and extend to the rest of the world with which the EU has entered into trade and migration agreements. In addition, some of our facilities located in other EU member states ship materials to the UK or otherwise engage in a variety of business interactions with the UK, including our UK facilities. Due to future changes in the UK due to a final exit, including possible increased trade barriers, increased tariffs or tariffs, or expected such changes, our suppliers, customers, or employees may change their interactions with us, including changes in imports or exports from the UK, requiring changes in the use of our facilities, including changes within and outside the United Kingdom, as well as changes in our labor relations with the United Kingdom. As far as our facilities operate as part of the intersection The reduction in cross-border supply chains and distribution chains may also have a negative impact on their operations Border movement of goods and services. We cannot predict the nature of these changes, because they depend to a large extent on factors beyond our control, but these changes may lead to adverse changes in our future operations, revenues and costs, so our future profitability. 10A a major disruption or security breach of our information technology system may adversely affect our business. We rely on information technology systems managed by third parties to process, transmit and store electronic information and to manage or support a variety of key business processes and activities. We also collect and store sensitive data, including confidential business information and personal data. These systems may be damaged, interrupted or shut down due to computer hackers, computer viruses, employee errors or malpractices, power outages, hardware failures, telecom or utility failures, disaster or other unforeseen events Upgrading our information technology systems is costly, prone to delays, and the new system is not guaranteed to bring the expected benefits. In addition, security loopholes in our system may result in theft or unauthorized disclosure of confidential information or personal data belonging to us or our employees, partners, customers or suppliers. Any such incident may disrupt our operations, delay production and delivery, cause defects in products or services, damage customer relationships and our reputation, and result in legal claims or litigation, liability or penalties under the Privacy Act, each of which may adversely affect our business and financial position. State and federal laws may also require us to provide them with notice if the affected personal data is the subject of a breach of security, which will increase costs, and may lead to additional responsibility and negative publicity. We take cyber security seriously and invest a lot of resources and tools to protect our systems, products and data and prevent unnecessary intrusion. However, the implementation of these security efforts is costly and may not be successful. There is no guarantee that we can prevent, detect, and adequately resolve or mitigate such cyber attacks. An attack or security breach. Any such breach of contract may have a significant adverse effect on our operations and reputation and may cause irreparable damage to us or our system, whether we or our third party -- After a system failure, the party provider is able to fully restore the critical system. In addition, regulatory or legislative actions related to global cybersecurity, privacy and data protection, such as the European General Data Protection Regulation, which came into force on May 2018, may increase development costs, implement or protect our products and services. We expect that cyber security regulations will continue to evolve and the cost of implementation will be high. Labor disputes may adversely affect the Company\'s business. Some of our subsidiaries are party to collective bargaining agreements with various US and international trade unions. We may, among other things, be hit by disputes under these collective bargaining agreements and labor contracts, or we may not be able to negotiate acceptable contracts with these unions, work stops or work slows down. If union workers in the United States or in the international community take part in a strike, shutdown or other slowdown; If other employees join the Union, or if the terms and conditions in the future labor agreement are renegotiated, our operations may be severely disrupted and incur higher ongoing labor costs. The status of the Web bank as the lender of loans it provides and the ability of the assignee to charge interest may be challenged, which may have a negative impact on the ongoing and future business of the web bank. The business of Web bank includes a loan plan with a marketing partner, which provides loan issuance services for the loan and subsequently purchases the loan ( Or an interest in a loan) This was initiated by web bank. There are already lawsuits and regulatory actions that challenge the loan arrangement, in which case the bank has loaned and then sold and allocated it to a physical loan. Some of these cases claim that marketing and service entities should be treated as \"real creditors\" of loans made through loan plans and that banks should be ignored. If this challenge is successful, the national legal interest rate limits and applies to non- Bank lenders will apply, not federal interest rate laws that govern bank lenders. Other cases are based on the assertion that even if a bank makes a loan under federal interest rate law, the transferee of the bank is not allowed to rely on federal law, but is limited by state law. Some of these challenges have been raised or threatened in projects involving web bank, including a pending lawsuit by Colorado unified consumer credit Code Administrator against a marketing partner at web bank. WebBank has stepped in on the pending lawsuit. If such a case or regulatory action is successfully brought against web bank or its marketing partners or others, it may have a negative impact on the ongoing and future business of web bank. WebBank continues to build its projects and control them to address these risks, although there is no guarantee that additional cases or regulatory actions will not be brought in the future. Volcker rules as part of Dodd Act Limits the flexibility of doing business with SPLP. The Dodd- Frank Act added a new 13 in the bank holding company law Generally, the \"Volcker rule\" of certain bank entities is restricted \"( (Including related institutions of depository institutions) Engage in proprietary trading activities in any private equity or hedge fund and acquire or retain ownership rights or sponsorship ( (\"Covering Funds \"). Under the regulations of implementation, web bank and its affiliates are restricted from engaging in self-operated transactions or investing in or sponsoring secured funds unless their activities comply with the specific exclusions or exemptions set out in the rules. Because SPLP controls WebBank, SPLP and all its subsidiaries, as well as the entities under its control, are bank entities under the Volcker rule and are therefore subject to the same restrictions. On June 2018 and December 2018, the federal agency responsible for the implementation of the Volcker rule again proposed further amendments to the existing regulations for the implementation of the Volcker rule. It is not yet known the substance and time of any final rule that will be implemented in accordance with these proposals. Changes to the regulations implementing the Volcker rules may require changes to the business of web bank, SPLP or any of its affiliates, which may limit the business or increase regulatory risks. The Web bank is subject to capital requirements and the FDIC can require SPLP to inject additional capital into the web bank as long as the web bank fails to meet its capital requirements. On July 2013, the Federal Reserve, the monetary Audit Office and the Federal Deposit Insurance Company issued rules for the implementation of changes to the Basel III international regulatory capital framework and revised the United StatesS. risk- Capital requirements based on and using the United StatesS. Banks to strengthen the weak areas identified in the capital rules and deal with Dodd-Frank Act. Since January 1, 2015, the FDIC regulations implementing Basel III have amended the minimum capital requirements of WebBank, defined the capital composition of the regulated capital and increased by 4. 5% first-class ratio of common stock and increase the requirement for first-class capital ratio from 4% to 6%. The FDIC also requires WebBank to comply with a total capital ratio of 8% and a leverage ratio of 4%. In addition, the buffer zone for capital protection ( Composed of first class Capital of common stock)equal to 2. More than 5% of the new regulatory minimum capital requirements will be implemented in stages from January 1, 2016 and have been fully implemented as of January 1, 2019. The capital protection buffer is above the minimum risk- Weighted capital ratios and have the effect of increasing these ratios by 2. 5% each. The failure of Web bank to maintain the minimum amount of capital required for the capital protection buffer will impair its ability to perform certain allocations ( Including dividends and stock buybacks) And discretionary bonuses paid to executive officers. The failure of WebBank to maintain capital in accordance with the FDIC minimum capital requirements will subject WebBank to the FDIC prompt corrective action regime, which may further impair the ability of WebBank to pay or distribute, and may require capital recovery plans or other corrective and regulatory measures. Federal banking agencies jointly issued a proposed rule on September 27, 2017, which will simplify the processing of certain assets and deductions for institutions not subject to so, such as web bank. Capital rules are called \"advanced methods \". The proposed rules will adjust the deduction threshold for certain mortgage service assets, deferred tax assets, investments in capital of unincorporated financial institutions and minority equity. While the banking institution considered comments on the proposed rules, the banking institution adopted a rule in November 21, 2017 to provide temporary relief to non-banking institutions The advanced approach is for the banking organization to extend the regulatory capital transition period for certain projects that came into effect in 2017, including regulatory capital deductions, risk weights and certain minority equity restrictions. The company is currently unable to predict the specific impact and long-term Basel III and its term implications for implementation in the United StatesS. It will have a wider impact on web bank and banking. Besides, Dodd- The frank act codifies a long-term policy that all companies that directly or indirectly control the FDIC The insurance Bank must be the source of funding for the institution. Therefore, the FDIC can require SPLP to inject additional capital into the web bank, and if the web bank fails to meet its capital requirements, including sometimes the SPLP may not be inclined to provide it, even if doing so may adversely affect SPLP\'s ability to perform other obligations, which includes restrictions on the capital contribution to web bank as set out in the company\'s senior secured revolving credit mechanism. The loan project of WebBank depends on the relationship with the marketing partner. WebBank provides loan programs with marketing partners. If these marketing partners do not provide initiating services or other services to web bank, or provide them in the wrong way, this may have a negative impact on the ongoing and future business of web bank. In addition, if a loan is not purchased by a marketing partner or another third party ( Or loan interest) Initiated by the web bank and then the web bank may need to keep these loans ( Or loan interest) This may have a negative impact on its ongoing and future business. Marketing Partners also need to compensate web bank for certain liabilities that may arise from loan projects. If a marketing partner is unable or unwilling to meet its liability for compensation, then web bank will be at risk of increased liability for claims in private litigation or regulatory enforcement actions. Marketing Partners can fulfill their obligations by relying on external sources of funding.