What changed in this filing

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Item 1. Business

2023-06-30 compared with 2023-04-11 · 161 added, 90 removed, 436 unchanged (37% of the section changed)

44 unchanged sentences

The Holding Foreign Companies Accountable Act (the “HFCA Act”)

and the Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”)

As more stringent criteria applying to emerging

19 unchanged sentences

Furthermore, on June 22, 2021, the U.S.

Senate passed the Accelerating

Holding Foreign Companies Accountable Act, which, if enacted, would amend the HFCA Act and require the SEC to prohibit an issuer’s

securities from trading on any U.S.

stock exchanges or the OTC markets if its auditor is not subject to PCAOB inspections for two consecutive

years instead of three thus reducing the time before our securities may be prohibited from trading or being delisted.

passed the Accelerating Holding Foreign Companies Accountable Act (the “AHFCAA”) , which would amend the HFCA Act and require

the SEC to prohibit an issuer’s securities from trading on any U.S.

stock exchanges or the OTC markets if its auditor is not subject

to PCAOB inspections for two consecutive years instead of three thus reducing the time before our securities may be prohibited from trading

or being delisted.

On December 29, 2022, the AHFCAA was signed into law.

On December 16, 2021, the PCAOB issued a determination,

16 unchanged sentences

quality control procedures, could result in a lack of assurance that our financial statements and disclosures are adequate and accurate.

On August 26, 2022, the PCAOB announced and signed

a Statement of Protocol (the “Protocol”) with the China Securities Regulatory Commission and the Ministry of Finance of the

People’s Republic of China.

The Protocol provides the PCAOB with:

(1) sole discretion to select the firms, audit engagements and

potential violations it inspects and investigates, without any involvement of Chinese authorities;

(2) procedures for PCAOB inspectors

and investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed;

(3) direct access to interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates.

The PCAOB reassessed the 2021

PCAOB Determinations that the positions taken by PRC authorities prevented the PCAOB from inspecting and investigating in mainland China

and Hong Kong completely.

The PCAOB sent its inspectors to conduct on-site inspections and investigations of firms headquartered in mainland

China and Hong Kong from September to November 2022.

On December 15, 2022, the

PCAOB announced in its determination (the “2022 Determination”) that the PCAOB was able to secure complete access to inspect

and investigate accounting firms headquartered in mainland China and Hong Kong, and the PCAOB Board voted to vacate previous determinations

to the contrary.

Should the PCAOB again encounter impediments to inspections and investigations in mainland China or Hong Kong as a result

of positions taken by any authority in either jurisdiction, including by the CSRC or the Ministry of Finance, the PCAOB will make determinations

under the HFCAA as and when appropriate.

We cannot assure you whether OTC or regulatory authorities would apply additional and more stringent

criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of

personnel and training, or sufficiency of resources, geographic reach, or experience as it relates to the audit of our financial statements.

There is a risk that the PCAOB is unable to inspect or investigate completely the Company’s auditor because of a position taken

by an authority in a foreign jurisdiction or any other reasons, and that the PCAOB may re-evaluate its determinations as a result of any

obstruction with the implementation of the Protocol.

Such lack of inspection or re-evaluation could cause trading in the Company’s

securities to be prohibited under the HFCAA ultimately result in a determination by a securities exchange to delist the Company’s

In addition, under the HFCAA as amended by the AHFCAA, our securities may be prohibited from trading on the OTC or other U.S.

stock exchanges if our auditor is not inspected by the PCAOB for two consecutive years, and this ultimately could result in our ordinary

shares being delisted by and exchange.

Future developments in

2 unchanged sentences

process and the regulatory developments are subject to the rule-making process and other administrative procedures.

See also “ Item 1A.

Risk Factors - Risks

Related to Doing Business in China - Holding Foreign Companies Accountable Act, or the HFCAA, and the related regulations are evolving

Further implementations and interpretations of our amendments to the HFCAA or the related regulations, or a PCAOB’s determination

of its lack of sufficient access to inspect our auditor, might pose regulatory risks to and impose restrictions on us because of our operations

in mainland China that PCAOB may not be able to inspect or investigate completely such audit documentation and, as such, you may be deprived

of the benefits of such inspection and our ordinary share could be delisted from the stock exchange pursuant to the HFCAA .

Regulatory Permissions and Developments

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cybersecurity review, and further elaborated the factors to be considered when assessing the national security risks of the relevant

Our operations in China

are governed by PRC and Hong Kong laws and regulations.

As of the date of this annual report, our PRC and Hong Kong subsidiaries have

obtained all the requisite licenses and permits from the PRC and Hong Kong government authorities that are material for our business

On February 24, 2023, the CSRC, the Ministry of Finance, the National

Administration of State Secrets Protection and the National Archives Administration jointly issued the Provisions on Strengthening Confidentiality

and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies, or the Confidentiality and Archives Provisions

(the “CAP”), which will take effective from March 31, 2023.

The Confidentiality and Archives Provisions specify that during

the overseas issuance of securities and listing activities of domestic enterprises, domestic enterprises and securities companies and

securities service institutions that provide relevant securities services shall, by strictly abiding by the relevant laws and regulations

of the PRC and the requirements therein, establish sound confidentiality and archives management systems, take necessary measures to implement

confidentiality and archives management responsibilities, and shall not leak national secrets, work secrets of governmental agencies and

undermine national and public interests.

Work manuscripts generated in the PRC by securities companies and securities service institutions

that provide relevant securities services for overseas issuance and listing of securities by domestic enterprises shall be kept in the

Without the approval of relevant competent authorities, it shall not be transferred overseas.

Where archives or copies need to be

transferred outside of the PRC, it shall be subject to the approval procedures in accordance with relevant PRC regulations.

Our operations in

China are governed by PRC and Hong Kong laws and regulations.

As of the date of this annual report, our PRC and Hong Kong subsidiaries

have obtained all the requisite licenses and permits from the PRC and Hong Kong government authorities that are material for our business

operations in PRC and Hong Kong.

The following table provides details on the

licenses and permissions held by our Hong Kong and PRC subsidiaries:

The following table

provides details on the licenses and permissions held by our Hong Kong and PRC subsidiaries:

License/Permission

3 unchanged sentences

Hong Kong Special Administrative Region

28, 2022 - April 27, 2023

April 28, 2022 - April 27, 2023

April 28, 2023 - April 27, 2024

Universe Travel Culture

4 unchanged sentences

2, 2019 - Long-term

As of the date of this report, as advised our PRC legal counsel, Beijing

Haotai Law Firm, none of our nor our subsidiaries are currently required to obtain any permission approval or business licenses from the

CSRC, the CAC, the trading of our securities on the OTCQB and the offering of our securities to foreign investors, or any other governmental

agency that is required to approve our or our subsidiaries’ operations.

The business of our Hong Kong subsidiary, Pony HK is not

subject to cybersecurity review with the CAC, given that PRC laws on data protection and cybersecurity do not currently apply to Hong

Further, for our Shenzhen subsidiary, Universe Travel, and to the extent that if we become subject to such PRC laws in the future.

As advised by our PRC counsel, we do not believe we are required to conduct a cybersecurity review because (i) we do not possess a large

amount of personal information on more than one million users in our business operations;

and (ii) data processed in our business does

not have a bearing on national security and thus may not be classified as core or important data by the authorities.

However, our operations

could be adversely affected, directly or indirectly, by future laws and regulations relating to our business or industry, if we inadvertently

conclude that such approvals or permissions are not required when they are, or applicable laws, regulations, or interpretations change

and we are required to obtain approvals or permissions in the future.

We may be subject to penalties and sanctions imposed by the PRC

or Hong Kong regulatory agencies, including the CSRC, if we fail to comply with such rules and regulations, which could adversely affect

the ability of the Company’s securities to continue to trade on the OTCQB, which may cause the value of our securities to significantly

decline or become worthless.

Given the uncertainties

of interpretation and implementation of laws and regulations and the enforcement practice of government authorities, we may be required

to obtain additional licenses, permits, filings or approvals for the functions and services of our platform in the future.

For more detailed

information, see “Item 1A.

Risk Factors—Risks Related to Our Business—Risks Related to Doing Business in China”

There may be prominent risks associated with

Pony HK’s operations being in Hong Kong and Universe Travel being the PRC.

For example, as a U.S.-listed public company with business

revenue derived primarily from our PRC-subsidiary, we may face heightened scrutiny, criticism and negative publicity, which could result

in a material change in our operations and the value of our common stock.

Additionally, Pony HK is subject to certain legal and operational

risks associated with our business operations in Hong Kong, which is subject to political and economic influence from China.

and regulations governing our current business operations are sometimes vague and uncertain, and we may face the risk that changes in

the policies of the PRC government could have a significant impact upon the business we conduct, through our subsidiaries Pony HK and

Universe Travel, in Shenzhen and in Hong Kong and the profitability of such business.

Therefore, these risks associated with having part

of our operations in Hong Kong could likely cause the value of our securities to significantly decline or be worthless.

these risks would likely result in a material change in our business operations or a complete hinderance of our ability to offer or continue

to offer our securities to investors.

In addition, changes in Chinese internal regulatory mandates, such as the Regulations on Mergers

and Acquisitions of Domestic Enterprises by Foreign Investors (the “M&A Rules”), the Anti-Monopoly Law, the Cybersecurity

Law and the Data Security Law, may target the Company’s corporate structure and impact our and our subsidiaries’ ability

to conduct business in Hong Kong and in Shenzhen, accept foreign investments, or list on an U.S.

As of the date of this

report, as advised our PRC legal counsel, Beijing Haotai Law Firm, none of our nor our subsidiaries are currently required to obtain

any permission approval or business licenses from the CSRC, the CAC, the trading of our securities on the OTCQB and the offering of our

securities to foreign investors, or any other governmental agency that is required to approve our or our subsidiaries’ operations.

The business of our Hong Kong subsidiary, Pony HK is not subject to cybersecurity review with the CAC, given that PRC laws on data protection

and cybersecurity do not currently apply to Hong Kong.

Further, for our Shenzhen subsidiary, Universe Travel, and to the extent that

if we become subject to such PRC laws in the future.

As advised by our PRC counsel, we do not believe we are required to conduct a cybersecurity

review because (i) we do not possess a large amount of personal information on more than one million users in our business operations;

and (ii) data processed in our business does not have a bearing on national security and thus may not be classified as core or important

data by the authorities.

However, our operations could be adversely affected, directly or indirectly, by future laws and regulations

relating to our business or industry, if we inadvertently conclude that such approvals or permissions are not required when they are,

or applicable laws, regulations, or interpretations change and we are required to obtain approvals or permissions in the future.

be subject to penalties and sanctions imposed by the PRC or Hong Kong regulatory agencies, including the CSRC, if we fail to comply with

such rules and regulations, which could adversely affect the ability of the Company’s securities to continue to trade on the OTCQB,

which may cause the value of our securities to significantly decline or become worthless.

the uncertainties of interpretation and implementation of laws and regulations and the enforcement practice of government authorities,

we may be required to obtain additional licenses, permits, filings or approvals for the functions and services of our platform in the

For more detailed information, see “Item 1A.

Risk Factors—Risks Related to Our Business—Risks Related

to Doing Business in China”

There may be prominent

risks associated with Pony HK’s operations being in Hong Kong and Universe Travel being the PRC.

For example, as a U.S.-listed

public company with business revenue derived primarily from our PRC-subsidiary, we may face heightened scrutiny, criticism and negative

publicity, which could result in a material change in our operations and the value of our common stock.

Additionally, Pony HK is subject

to certain legal and operational risks associated with our business operations in Hong Kong, which is subject to political and economic

influence from China.

PRC laws and regulations governing our current business operations are sometimes vague and uncertain, and we may

face the risk that changes in the policies of the PRC government could have a significant impact upon the business we conduct, through

our subsidiaries Pony HK and Universe Travel, in Shenzhen and in Hong Kong and the profitability of such business.

Therefore, these risks

associated with having part of our operations in Hong Kong could likely cause the value of our securities to significantly decline or

be worthless.

Furthermore, these risks would likely result in a material change in our business operations or a complete hinderance of

our ability to offer or continue to offer our securities to investors.

In addition, changes in Chinese internal regulatory mandates,

such as the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the “M&A Rules”), the

Anti-Monopoly Law, the Cybersecurity Law and the Data Security Law, may target the Company’s corporate structure and impact our

and our subsidiaries’ ability to conduct business in Hong Kong and in Shenzhen, accept foreign investments, or list on an U.S.

or other foreign exchange.

including the SEC, has recently made statements and taken certain actions that may lead to significant changes to U.S.

and international

relations, and will impact companies with connections to the United States or China (including Hong Kong).

The SEC has issued statements

primarily focused on companies with significant China-based operations.

For example, on July 30, 2021, Gary Gensler, Chairman of the SEC,

issued a Statement on Investor Protection Related to Recent Developments in China, pursuant to which Chairman Gensler stated that he has

asked the SEC staff to engage in targeted additional reviews of filings for companies with significant China-based operations.

For a detailed description of the risks facing

the Company and the risks associated with having our operations in Hong Kong, please refer to “ Item 1A.

Risk Factors -

Risks Related to Doing Business in China.

government, including

the SEC, has recently made statements and taken certain actions that may lead to significant changes to U.S.

and international relations,

and will impact companies with connections to the United States or China (including Hong Kong).

The SEC has issued statements primarily

focused on companies with significant China-based operations.

For example, on July 30, 2021, Gary Gensler, Chairman of the SEC, issued

a Statement on Investor Protection Related to Recent Developments in China, pursuant to which Chairman Gensler stated that he has asked

the SEC staff to engage in targeted additional reviews of filings for companies with significant China-based operations.

For a detailed description

of the risks facing the Company and the risks associated with having our operations in Hong Kong, please refer to “ Item 1A.

Risk Factors - Risks Related to Doing Business in China.

The business nature of the Company is to provide

43 unchanged sentences

Customer Services

We lease an office at Engineer Experiment Building, A202, 7 Gaoxin

South Avenue, Nanshan District, Shenzhen, Guangdong Province, China, encompassing approximately 205 square meters of space for a monthly

rent of RMB 10,000 (approximately $1,570).

We lease an office at Engineer Experiment Building,

A202, 7 Gaoxin South Avenue, Nanshan District, Shenzhen, Guangdong Province, China, encompassing approximately 205 square meters of space

for a monthly rent of RMB 10,000 (approximately $1,570).

The lease for this facility expires on February 28, 2024.

We believe the rented space is sufficient

for our current operations.

We believe the

rented space is sufficient for our current operations.

We believe our facilities are sufficient for our current needs.

We currently do not have any insurance coverage

other than participation in various governm 可 ent statutory social

security plans, including a pension contribution plan, a medical insurance plan, an unemployment insurance plan, a work-related injury

insurance plan, a maternity insurance plan and a housing provident fund.

other than participation in various government statutory social security plans, including a pension contribution plan, a medical insurance

plan, an unemployment insurance plan, a work-related injury insurance plan, a maternity insurance plan and a housing provident fund.

Legal Proceedings

31 unchanged sentences

Foreign Investment (Negative List) (2019 Edition), or the Negative List (2019) to replace the Negative List (2018), effective in July

The Negative List (2019) has reduced 8 special management measures in the Negative List (2018).

On December 28, 2020, the National Development and Reform Commission and the Ministry of Commerce publicly released the Directory

of Industries to Encourage Foreign Investment (Encouraged Catalogue) (2020 Edition).

On December 27, 2021, NDRC and MOFCOM jointly issued

the Special Administrative Measures for Foreign Investment Access (Negative List) (2021 Edition), and the Special Administrative Measures

for Foreign Investment Access in Pilot Free Trade Zones (Negative List) (2021 Edition), effective January 1, 2022.

As per these policies,

the national negative list of foreign investment access was reduced from 33 to 31, and the negative list of foreign investment access

in the free trade zone was reduced from 30 to 27.

Industries listed in the 2020 Encouraged Catalogue are the encouraged industries.

the other hand, industries listed in the 2021 Negative List are subject to special management measures.

For example, establishment of

wholly foreign-owned enterprises is generally allowed in industries outside of the 2021 Negative List.

Also, foreign investors are not

allowed to invest in industries that are expressly prohibited in the 2021 Negative List.

The industries that are not expressly prohibited

in the Negative List are still subject to government approvals and certain special requirements.

We believe that our current business

is to provide travel services and therefore falls in neither the Negative List (2018) nor the Negative List (2019).

is to provide travel services and therefore we do not falls in the Negative List (2021), the Negative List (2018) nor the Negative List

Foreign Investment Law

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five years after the implementing of the Foreign Investment Law.

Interim Administrative Measures for the Record-filing of the Incorporation

and Change of Foreign-invested Enterprises

Measures for Reporting of Foreign Investment Information

On September 3, 2016, the Standing Committee of

8 unchanged sentences

detail instructions for foreign-invested enterprise to carry out record filing in terms of the change of the enterprise in China.

On December 30, 2019, MOFCOM and the State Administration for Market

Regulation jointly issued the Measures for Reporting of Foreign Investment Information, or the Foreign Investment Information Measures,

which came into effect on January 1, 2020 and replaced the Interim Measures.

Since January 1, 2020, for foreign investors carrying out

investment activities directly or indirectly in the PRC, foreign investors or foreign-invested enterprises shall submit investment information

through the Enterprise Registration System and the National Enterprise Credit Information Publicity System operated by the State Administration

for Market Regulation.

Foreign investors or foreign-invested enterprises shall disclose their investment information by submitting reports

for their establishments, modifications and cancellations and their annual reports in accordance with the Foreign Investment Information

If a foreign-invested enterprise investing in the PRC has finished submitting its reports for its establishment, modifications

and cancellation and its annual reports, the relevant information will be shared by the competent market regulation department to the

competent commercial department, and does not require such foreign-invested enterprise to submit the reports separately.

The M&A Rules

174 unchanged sentences

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/A

Item 1. Business