What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-03-31 compared with 2022-03-31 · 171 added, 69 removed, 135 unchanged (64% of the section changed)

23 unchanged sentences

oversea markets.

Transfers of Cash to and from Our Subsidiaries

Pony Group Inc is a holding company incorporated

in Delaware with no material operations of its own, and we conduct our business through our indirectly wholly-owned subsidiaries, Pony

HK, in Hong Kong and Universe Travel, in Shenzhen.

We currently do not rely on dividends and other distributions on equity to be paid

by our Hong Kong or Shenzhen subsidiaries to fund our cash and financing requirements, including the funds necessary to pay dividends

and other cash distributions to our stockholders, to service any debt we may incur and to pay our operating expenses.

Currently, substantially

all of our operations are in Hong Kong from Pony HK and in Shenzhen from Universe Travel.

Pony HK is the parent of a wholly-owned subsidiary,

Universe Travel Culture & Technology Ltd., that is incorporated in the PRC.

We do not intend to set up any subsidiary or enter into

any contractual arrangements to establish a VIE structure with any entity in China.

Hong Kong is a special administrative region of the

PRC and the basic policies of the PRC regarding Hong Kong are reflected in the Basic Law of the Hong Kong Special Administrative Region

of the People’s Republic of China (the “Basic Law”), providing Hong Kong with a high degree of autonomy and executive,

legislative and independent judicial powers, including that of final adjudication under the principle of “one country, two systems”.

The laws and regulations of the PRC do not currently have any material impact on any future transfer of cash either from us to Pony HK

or from Pony HK to us and the investors in the U.S.

In addition, there are no restrictions or limitations under the laws of Hong Kong

imposed on the conversion of Hong Kong dollar or the Chinese Yuan into foreign currencies and the remittance of currencies out of Hong

Kong or across borders and to U.S investors.

We are permitted under the Delaware law to provide funding to our subsidiaries,

including Pony HK and Universe Travel, through loans or capital contributions without restrictions on the amount of the funds.

no significant restrictions or limitations on our ability to distribute earnings from our businesses, including our subsidiaries, to the

Specifically, under PRC laws and regulations, Universe Travel is a wholly foreign-owned enterprise in China.

Universe Travel may pay dividends only out of its accumulated after-tax profits as determined in accordance with PRC accounting standards

and regulations.

In addition, a wholly foreign-owned enterprise is required to set aside at least 10% of its accumulated after-tax profits

each year, if any, to fund certain statutory reserve funds until the aggregate amount of such funds reaches 50% of its registered capital.

At its discretion, a wholly foreign-owned enterprise may allocate a portion of its after-tax profits based on PRC accounting standards

to staff welfare and bonus funds.

These reserve funds and staff welfare and bonus funds are not distributable as cash dividends.

In addition, Pony HK is permitted under

the laws of Hong Kong to provide funding to Pony Group Inc, the holding company incorporated in Hong Kong, and to Pony HK’s subsidiary,

Universe Travel, a company incorporated in the PRC, through dividend or other distribution without restrictions on the amount of the funds.

Further, Pony HK and Universe Travel currently intend to retain all available funds and future earnings, if any, for the operation and

expansion of its business and does not anticipate declaring or paying any dividends in the foreseeable future As of the date of this Report,

there has been no dividends, distributions or cash transfer between our holding company and our subsidiaries nor do we expect such dividends,

distributions or cash transfers to occur in the foreseeable future among our holding company and its subsidiaries.

Accordingly, we currently

do not have, nor we anticipate to have in the future, cash management policies that dictate how funds are transferred between our holding

company and its subsidiaries.

Moreover, there are no restrictions on foreign exchange

or our ability to transfer cash between entities within our group, across borders, or to U.S.

However, the PRC government has

significant authority to intervene or influence the China operations of an offshore holding company at any time, and such oversight may

also extend to our Hong Kong operating company.

We cannot assure you that the PRC government will not prevent us from transferring the

cash we maintain in Hong Kong outside of Hong Kong, or restrict our ability to deploy our cash into business or to pay dividends.

also be subject to limitations on the transfer or the use of our cash if we expand our business operations into China or conduct our operations

in some other ways such that we become subject to PRC laws that regulate these activities.

In addition, if Pony HK or Universe Travel

incur debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other

distributions to us.

To the extent cash and/or assets in the business is in Pony HK or Universe Travel, the cash and/or assets may not

be available to fund operations or for other use outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions

and limitations on our ability or on our subsidiaries by the PRC government to transfer such cash and/or assets.

As such, any limitation

on our ability to transfer or use our cash could materially and adversely limit our ability to grow, make investments or acquisitions

that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

We have never paid or declared any cash dividends

on our common stock and do not anticipate paying cash dividends in the foreseeable future.

The declaration of dividends on any class

of shares is within the discretion of our board of directors, subject to Delaware law, out of legally available funds, and will depend

on the assessment of, among other factors, earnings, capital requirements and our operating and financial condition.

None of our subsidiaries

has made any dividends or distributions to us.

Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable

in Hong Kong in respect of dividends paid by us.

See “ Item 1A.

Risk Factors - Risks Related to Our Business and Industry - We

are not likely to pay cash dividends in the foreseeable future.

Plan of Operations

23 unchanged sentences

For the year ended December 31, 2022 and 2021,

revenues were $157,627 and $115,381, respectively, with an increase of $42,246 over the same period in 2020.

In compliance with the government

health emergency rules in place, the Company temporarily closed all offices in China and ceased operations from January 19, 2020 to February

During the year ended December 31, 2021, orders for our travel service business have recovered.

revenues were $112,844 and $157,627, respectively, with a decrease of $44,783 over the same period in 2021.

From January to March 2022,

the Company provided a new car subscription service to Gangjianxiang which brought in approximately RMB 60,000 (about $9,464) of

revenue per month.

Separately, orders from Gangjianxiang brought in approximately RMB20,000 (about $2,551) from April 2022 due to a decrease

in demand for services from Gangjianxiang.

Cost of Revenue

Cost of Revenue for the year ended December

31, 2021 and 2020 were $102,314 and $58,191, respectively, with an increase of $44,123 over the same period in 2022.

The increase mainly

due to the increase of revenue, the cost of revenue increase accordingly.

Cost of Revenue

for the year ended December 31, 2022 and 2021 were $45,001 and $102,314, respectively, with a decrease of $57,313 over the same period

The decrease of cost of revenue was mainly due to Universe Travel developing an active travel planning service in the first quarter

As such, the cost of developing the service increased the cost of revenue for such quarter.

There was no such item in 2022, thus

the cost of revenue decreased for year ended December 31, 2022.

Gross profits were $67,843 and $ 55,313

for the year ended December 31, 2021 and 2020, respectively, a decrease of $1,877 over the same period in 2020.

for the year ended December 31, 2022 and 2021, respectively, an increase of $12,530 over the same period in 2021.

The increase of gross

profit was due to Universe Travel providing technology development services to Shenzhen Shangjia Electronic Technology., Ltd (“Shangjia”)

in 2022, which brought in $57,704 of revenue for the Company.

This service provided has a higher gross profit margin and led to the increase

of the total gross profit margin for the year ended December 31, 2022.

Operating Expenses

Operating expenses for the year ended

December 31, 2021 and 2020 were $171,276 and $100,742, respectively, with an increase of $70,534 or 70.01% from the same period in 2020.

The increase mainly due to the effect of COVID-19 the Company temporarily closed all offices in China and ceased operations from January

19, 2020 to February 10, 2020.

There was no such item during the year ended December 31, 2021.

expenses for the year ended December 31, 2022 and 2021 were $342,468 and $171,276, respectively, with an increase of $171,192 or 99.95%

from the same period in 2021.

The increase was mainly due to service fee paid for OTC listing and other consulting services fees .

R&D expenses increased to $23,816 for the Company to develop and maintain the App.

Other Income (Expense)

Other income consists

of interest income and exchange gain (loss) for the year ended December 31, 2021 and 2020 the net other income were $17,957 when it was$1,765

for the same period in 2020.The change of other Income(expense) mainly due to the change of exchange rate .

The increase was mainly due

to the change of exchange rate and the increase of average cash balance.

income consists of interest income and exchange gain (loss) for the year ended December 31, 2022 and 2021 the net other income were $5,547

when it was $17,957for the same period in 2021.The change of other Income(expense) mainly due to the change of exchange rate.

was mainly due to the change of exchange rate and the increase of average cash balance.

Liquidity and Capital Resources

11 unchanged sentences

Such additional funds may not become available

on acceptable terms and there can be no assurance that any additional funding that we do obtain will be sufficient to meet our needs

in the long term.

on acceptable terms and there can be no assurance that any additional funding that we do obtain will be sufficient to meet our needs in

the long term.

As of December 31, 2022, we had enough cash to last approximately six months.

4 unchanged sentences

activities for the year ended December 31, 2022 and 2021.

Net cash used in financing activities

for the year ended December 31, 2021 amounted to $14,333, compared to net cash provided by financing activities of $ 309,692 in the same

In June 2020, we completed the initial public offering and received proceeds of $250,000 before deducting underwriting

discounts, commissions and other related expenses.

Net cash provided by financing activities

for the year ended December 31, 2022 amounted to $92,603, compared to net cash used in financing activities of $14,333 in the same period

The net cash provided by financing activities were from shareholders who paid cost and other expenses on behalf of the Company.

Further, our audited financial

statements for the year ended December 31, 2022 were prepared assuming that we will continue as a going concern.

In addition, as discussed

in Note 2 of the financial statements for the year ended December 31, 2022, the Company has suffered recurring losses from operations.

These conditions raise substantial doubt on our ability to continue as a going concern.

The report of our independent registered public

accounting firm on our financial statements for the year ended December 31, 2022 included an explanatory paragraph on the doubt of our

ability to continue as a going concern in order to draw prospective investors’ attention to the relevant note in the financial statements

for the year ended December 31, 2022.

In order to continue as a going concern, the Company

will need, among other things, additional capital resources.

Management’s plans to obtain such resources for the Company include

(1) obtaining capital from the sale of its equity securities, (2) sales of the Company’s services, (3) short-term and long-term

borrowings from banks, and (4) short-term borrowings from stockholders or other related party(ies) when needed.

However, management cannot

provide any assurance that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as

a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually

to secure other sources of financing and attain profitable operations.

If we are unable to raise additional capital in debt or equity

financing on terms favorable to us, then we may be unable to achieve our objectives.

In January 2020, the World Health Organization

declared a global health emergency as the novel coronavirus (“COVID-19”) outbreak continues to spread beyond China.

effort to contain COVID-19, the Chinese authorities have suspended air, road, and rail travel in the area around Wuhan and placed restrictions

effort to contain COVID-19, the Chinese authorities had suspended air, road, and rail travel in the area around Wuhan and placed restrictions

on travel and other activities throughout China, including Guangdong Province and Hong Kong, the key market in which we operate.

3 unchanged sentences

At the end of this period, management reopened our business.

As of the date of this prospectus, the

Hong Kong government has reported cases of COVID-19 in the region, has upgraded its response level to emergency, its highest response

level, and is taking other steps to manage the outbreak.

On February 8, 2020, the Hong Kong government began enforcing a compulsory 14-day

quarantine for anyone, regardless of nationality, arriving in Hong Kong who has visited mainland China within a 14-day period.

This quarantine

does not apply to individuals transiting Hong Kong International Airport and certain exempted groups such as flight crews.

However, health

screening measures are in place at all of Hong Kong’s borders and the Hong Kong authorities will quarantine individual travelers,

including passengers transiting the Hong Kong International Airport, if the Hong Kong authorities determine the traveler to be a health

On January 30, 2020, the Hong Kong government closed certain transportation links and border checkpoints connecting Hong Kong with

mainland China (all located in Guangdong Province) until further notice, and on February 3, 2020 suspended ferry services from Macau

(which has border checkpoints connecting Macau with Guangdong Province).

As of the date of this Report, the Hong

Kong government has reported cases of COVID-19 in the city, has upgraded its response level to emergency, its highest response level,

and is taking other steps to manage the outbreak.

Prior to December 13, 2022, the Hong Kong government only allows vaccinated persons

arriving from overseas to enter, and all vaccinated persons are subject to a three-day self-monitoring period for COVID-19 while in the

During the self-monitoring period, vaccinated persons are not permitted to enter designated places of public gathering including

restaurants, places of amusement and religious premises.

As of the date of this Report, the Hong Kong government no longer requires travelers

to undergo the three-day-self monitoring period, however, travelers to Hong Kong must be fully vaccinated and undergo COVID-19 testing

before departure.

On January 30, 2020, the Hong Kong government closed certain transportation links and border checkpoints connecting

Hong Kong with mainland China (all located in Guangdong Province) until further notice, and on February 3, 2020 suspended ferry services

from Macau (which has border checkpoints connecting Macau with Guangdong Province).

On February 6, 2023, the Hong Kong government has

reopened all transportation links and border checkpoints with mainland China.

The effects of the COVID-19 pandemic,

including the travel restrictions described above, have resulted in a dramatic reduction in the number of people travelling from Guangdong

Province to Hong Kong and a similar reduction in the number of our customers and have, severely impacted our operating results during

the first quarter of 2020.

For example, compared to the first quarter of 2019, the first quarter of 2020’s revenue, cost of revenue

and operating expenses decreased by 33.2%, 43.8% and 76.6%, respectively, and gross profit and other income increased by 19.9% and 240.8%,

respectively.

We believe the decreases, including the decrease in cost of revenue, are primarily attributable to the fact that we ceased

car services for individual and group travelers between Guangdong Province and Hong Kong in the first quarter of 2020, resulting in a

decrease of customers.

In the same period, we started to provide express, small-package delivery services for customers in the same region

in cities including Shenzhen, Guangzhou, Zhuhai and Zhongshan, which brought in an estimated $8,700 of revenue.

We expect that after

our offices reopened on February 11, 2020 and as the travel restrictions started to ease, our business will gradually return to normal

levels, although we are unable to predict as of the date of this prospectus the speed of the recovery.

We expect the COVID-19 outbreak may

materially affect our financial condition and results of operations going forward.

Our business operations and activities in many regions

(including Hong Kong and Guangdong Province) may be subject to quarantines, “shelter-in-place” rules, and various other restrictions

for the foreseeable future.

Due to the uncertainty of the future impacts of the COVID-19 pandemic, the extent of the financial impact

cannot be reasonably estimated at this time.

Without limited the generality of the foregoing sentence, any significant disruption to

travel, including travel restrictions and other potential protective quarantine measures against COVID-19 by governmental agencies, may

increase the difficulty and could make it difficult for the Company to provide its services to its customers.

Travel restrictions and

protective measures against COVID-19 could cause the Company to incur additional unexpected costs and expenses.

The extent to which COVID-19

impacts the Company’s business, sales and results of operations will depend on future developments, which are highly uncertain

and cannot be predicted.

Province to Hong Kong and a similar reduction in the number of our customers and have severely impacted our operating results.

of travellers between Guangdong province and Hong Kong deceases significantly.

Thus, the orders for our travel service business decreased.

In the same period, to generate new revenues we started provided monthly subscription service to obtain new customers.

to March 2022, the Company provided car subscription service to Gangjianxiang which brought in approximately RMB60,000 (about $9,464)

of revenue per month.

From April 2022 until December 31, 2022, separate orders from Gangjianxiang brought in approximately RMB20,000 (about

Our subsidiary Universe Travel started to provided technology and development services to help our clients to develop their own

mobile application and platform, we believe that such services will generate additional revenue in the future.

Many of the restrictive measures previously

adopted by the PRC governments at various levels to control the spread of the COVID-19 virus have been revoked or replaced with

more flexible measures since December 2022.

While the revocation or replacement of the restrictive measures to contain the COVID-19

pandemic could have a positive impact on our normal operations, it may also shift the public’s interest in COVID-19 vaccines.

Moreover, there has recently been and may continue to be an increase inCOVID-19 cases in China, and as a result, we experienced temporary

disruption to our operations where many employees were infected with COVID-19 in December 2022.

Our business operations

and active ties in many regions (including Hong Kong and Guangdong Province) may be subject to quarantines, “shelter-in-place”

rules, and various other restrictions for the foreseeable future.

Due to the uncertainty of the future impacts of the COVID-19 pandemic,

the extent of the financial impact cannot be reasonably estimated at this time.

Without limited the generality of the foregoing sentence,

any significant disruption to travel, including travel restrictions and other potential protective quarantine measures against COVID-19

by governmental agencies, may increase the difficulty and could make it difficult for the Company to provide its services to its customers.

Travel restrictions and protective measures against COVID-19 could cause the Company to incur additional unexpected costs and expenses.

The extent to which COVID-19 impacts the Company’s business, sales and results of operations will depend on future developments,

which are highly uncertain and cannot be predicted.

Going Concern

52 unchanged sentences

Off-Balance Sheet Arrangements

As of December 31, 2021, we did not

have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

As of December 31, 2022, we did not have

any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis