What changed in this filing

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Item 1. Business

2026-03-27 compared with 2025-03-27 · 529 added, 498 removed, 78 unchanged (93% of the section changed)

Pony Group Inc.

(‘Company” or “Pony”)

was incorporated on January 7, 2019 in the state of Delaware.

or “Pony”) was incorporated on January 7, 2019 in the state of Delaware.

Our Corporate History

On March 7, 2019, Pony Group Inc (the “Purchaser”),

and Wenxian Fan, the sole owner of Pony Limousine Services Limited, entered into a Stock Purchase Agreement (the “Purchase Agreement”),

pursuant to which Wenxian Fan (the “Seller”) would sell to the Purchaser, and the Purchaser will purchase from the Seller,

10,000 shares of the Pony Limousine Services Limited (“Pony HK”), which represented 100% of the shares.

On March 7, 2019,

this transaction was completed.

Pony Limousine Services Limited is a limited liability

company formed under the laws of Hong Kong on April 28, 2016, which was formed by Wenxian Fan.

Its registered office is located at Flat/Rm

01 11/F, Lucky Comm Bldg, 103 Des Voeux Rd West, Sheung Wan, Hong Kong.

On February 2, 2019, Universe Travel Culture & Technology

On March 7, 2019, Pony Group

Inc (the “Purchaser”), and Wenxian Fan, the sole owner of Pony Limousine Services Limited, entered into a Stock Purchase

Agreement (the “Purchase Agreement”), pursuant to which Wenxian Fan (the “Seller”) would sell to the Purchaser,

and the Purchaser will purchase from the Seller, 10,000 shares of the Pony Limousine Services Limited (“Pony HK”), which

represented 100% of the shares.

On March 7, 2019, this transaction was completed.

Pony Limousine Services Limited

is a limited liability company formed under the laws of Hong Kong on April 28, 2016, which was formed by Wenxian Fan.

Its registered

office is located at Flat/Rm 01 11/F, Lucky Comm Bldg, 103 Des Voeux Rd West, Sheung Wan, Hong Kong.

On February 2, 2019, Universe Travel

Culture & Technology Ltd.

(“Universe Travel”) was incorporated as a wholly-owned PRC subsidiary of Pony HK.

Our Corporate Structure

We do not have or intend to set up any subsidiary

or enter into any contractual arrangements to establish a variable interest entity (“VIE”) structure with any entity in China.

The following diagram illustrates our corporate structure, including our subsidiaries as of the date of this Report:

holding company structure presents unique risks as our investors may never directly hold equity interests in our Hong Kong or Shenzhen

operating subsidiary and will be dependent upon dividends and other distributions from our subsidiaries to finance our cash flow needs.

We are, however, not a Chinese or Hong Kong operating company but a United States holding company with operations conducted by our subsidiaries.

Our ability to receive dividends and other contributions from our subsidiaries are significantly affected by regulations p romulgated

by Hong Kong and PRC authorities.

Any change in the interpretation of existing rules and regulations or the promulgation of new rules

and regulations may materially affect our operations and or the value of our securities, including causing the value of our securities

to significantly decline or become worthless.

For a detailed description of the

risks facing the Company associated with our structure, please refer to “ Item 1A.

Risk Factors - Risks Related to Doing

Business in China.”

PRC laws and regulations do not prohibit direct foreign investment in our Hong Kong or Shenzhen operating subsidiary.

Nonetheless, in

light of the recent statements and regulatory actions by the PRC government, such as those related to Hong Kong’s national security,

the promulgation of regulations prohibiting foreign ownership of Chinese companies operating in certain industries, which are constantly

evolving, and anti-monopoly concerns, we may be subject to the risks of uncertainty of any future actions of the PRC government in this

regard, which would likely result in a material change in our operations, including our ability to continue our existin g holding

company structure, carry on our current business, accept foreign investments, and offer or continue to offer securities to our investors,

and the resulting adverse change in value to our common stock.

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

Hong Kong regulatory agencies, including the China Securities Regulatory Commission, or CSRC, if we fail to comply with such rules and

regulations, which would likely adversely affect the ability of the Company’s securities to continue to trade on the OTCQB, which

would likely cause the value of our securities to significantly decline or become worthless.

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

market companies upon assessing the qualification of their auditors have been imposed by the United States Securities and Exchange Commission

(the “SEC”) and the Public Company Accounting Oversight Board (the “PCAOB”) recently, and under the HFCA Act,

our securities may be prohibited from being traded on the over-the-counter (the “OTC”) markets if our auditor is not inspected

by the PCAOB for three consecutive years, and this ultimately could result in trading in our securities being prohibited.

HFCA Act was enacted on December 18, 2020.

The HFCA Act states that if the SEC determines that an issuer’s audit reports issued

by a registered public accounting firm have not been subject to inspection by the PCAOB for three consecutive years beginning in 2021,

the SEC shall prohibit such issuer’s securities from being traded on a national securities exchange or in the over-the-counter trading

market in the United States.

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure

and documentation requirements of the HFCA Act.

We do not have or intend

to set up any subsidiary or enter into any contractual arrangements to establish a variable interest entity (“VIE”) structure

with any entity in China.

The following diagram illustrates our corporate structure, including our subsidiaries as of the date of this

Our holding company structure

presents unique risks as our investors may never directly hold equity interests in our Hong Kong or Shenzhen operating subsidiary and

will be dependent upon dividends and other distributions from our subsidiaries to finance our cash flow needs.

We are, however, not a

Chinese or Hong Kong operating company but a United States holding company with operations conducted by our subsidiaries.

to receive dividends and other contributions from our subsidiaries are significantly affected by regulations promulgated by Hong Kong

and PRC authorities.

Any change in the interpretation of existing rules and regulations or the promulgation of new rules and regulations

may materially affect our operations and or the value of our securities, including causing the value of our securities to significantly

decline or become worthless.

For a detailed description of the risks facing the Company associated with our structure, please refer to

Risk Factors - Risks Related to Doing Business in China.”

Currently, PRC laws and

regulations do not prohibit direct foreign investment in our Hong Kong or Shenzhen operating subsidiary.

Nonetheless, in light of

the recent statements and regulatory actions by the PRC government, such as those related to Hong Kong’s national security,

the promulgation of regulations prohibiting foreign ownership of Chinese companies operating in certain industries, which are

constantly evolving, and anti-monopoly concerns, we may be subject to the risks of uncertainty of any future actions of the PRC

government in this regard, which would likely result in a material change in our operations, including our ability to continue our

existing holding company structure, carry on our current business, accept foreign investments, and offer or continue to offer

securities to our investors, and the resulting adverse change in value to our common stock.

We may also be subject to penalties and

sanctions imposed by the PRC or Hong Kong regulatory agencies, including the China Securities Regulatory Commission, or CSRC, if we

fail to comply with such rules and regulations, which would likely adversely affect the ability of the Company’s securities to

continue to trade on the OTCQB, which would likely cause the value of our securities to significantly decline or become

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 market companies upon assessing the qualification of their auditors have been imposed by the United States Securities

and Exchange Commission (the “SEC”) and the Public Company Accounting Oversight Board (the “PCAOB”) recently,

and under the HFCA Act, our securities may be prohibited from being traded on the over-the-counter (the “OTC”) markets if

our auditor is not inspected by the PCAOB for three consecutive years, and this ultimately could result in trading in our securities

being prohibited.

The HFCA Act was enacted

on December 18, 2020.

The HFCA Act states that if the SEC determines that an issuer’s audit reports issued by a registered public

accounting firm have not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit

such issuer’s securities from being traded on a national securities exchange or in the over-the-counter trading market in the United

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation

requirements of the HFCA Act.

We will be required to comply with these rules if the SEC identifies us as having a “non-inspection”

2 unchanged sentences

we could face possible prohibition from trading on the OTCQB, deregistration from the SEC and/or other risks, which may materially and

adversely affect, or effectively terminate, our securities tra ding in the United States.

adversely affect, or effectively terminate, our securities trading in the United States.

On December 2, 2021, the SEC issued amendments

1 unchanged sentence

The rules apply to registrants that the SEC

identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is

located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority

in foreign jurisdictions.

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

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.

identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign

jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.

Furthermore, on June 22,

2021, the U.S.

Senate 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, under the HFCA

Act, on registered public accounting firms headquartered in Hong Kong and the mainland China of the People’s Republic of China that

it is unable to inspect or investigate completely.

As of this Report, our auditor, YCM CPA, INC.

is not headquartered in China nor Hong

Kong and thus is not subject to such determination.

As a firm registered with the PCAOB subject to laws in the United States

which provide that the PCAOB shall conduct regular inspections to assess the auditor’s compliance with the applicable professional

On December 16, 2021, the

PCAOB issued a determination, under the HFCA Act, on registered public accounting firms headquartered in Hong Kong and the mainland China

of the People’s Republic of China that it is unable to inspect or investigate completely.

As of this Report, our auditor, YCM CPA

is not headquartered in China nor Hong Kong and thus is not subject to such determination.

As a firm registered

with the PCAOB subject to laws in the United States which provide that the PCAOB shall conduct regular inspections to assess the

auditor’s compliance with the applicable professional standards.

We have no intention of dismissing YCM CPA INC.

in the future or engaging any auditor not based in the U.S.

and not subject

to regular inspection by the PCAOB.

There is no guarantee, however, that any future auditor engaged by the Company would remain subject

to full PCAOB inspection during the entire term of our engagement.

If it is later determined that the PCAOB is unable to inspect or investigate

our auditor completely, investor may be deprived of the benefits of such inspection.

Any audit reports not issued by auditors that are

completely inspected by the PCAOB, or a lack of PCAOB inspections of audit work undertaken in China or Hong Kong that prevents the PCAOB

from regularly evaluating our auditors’ audits and their 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.

in the future

or engaging any auditor not based in the U.S.

and not subject to regular inspection by the PCAOB.

There is no guarantee, however,

that any future auditor engaged by the Company would remain subject to full PCAOB inspection during the entire term of our

If it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, investor may be

deprived of the benefits of such inspection.

Any audit reports not issued by auditors that are completely inspected by the PCAOB, or

a lack of PCAOB inspections of audit work undertaken in China or Hong Kong that prevents the PCAOB from regularly evaluating our

auditors’ audits and their 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;

(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

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

The PCAOB reassessed the

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.

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 securities.

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

Future developments in respect of increased U.S.

regulatory access to audit information are uncertain, as the legislative developments are subject to the legislative process and the regulatory

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

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 quickly.

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 .

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

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 respect

of increased U.S.

regulatory access to audit information are uncertain, as the legislative developments are subject to the legislative

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 quickly.

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

have determined that the laws and regulations of the PRC do not currently have any material impact on our business, financial condition

or results of operations.

However, there is no assurance that there will not be any changes in the economic, political and legal environment

in Hong Kong, where Pony HK operates, in the future.

If there is significant change to current political arrangements between mainland

China and Hong Kong, companies operated in Hong Kong such as us may face similar regulatory risks as those operated in PRC, including

their ability to offer securities to investors, list their securities on a U.S.

or other foreign exchange, conduct their business or accept

foreign i nvestment.

In light of China’s recent expansion of authority

in Hong Kong, there are risks and uncertainties which we cannot foresee for the time being, and rules and regulations in China can change

quickly with little or no advance notice.

The Chinese government may intervene or influence our current and future operations in Hong

Kong at any time, or may exert more control over offerings conducted overseas and/or foreign investment in issuers likes ourselves.

We have determined that the

laws and regulations of the PRC do not currently have any material impact on our business, financial condition or results of operations.

However, there is no assurance that there will not be any changes in the economic, political and legal environment in Hong Kong, where

Pony HK operates, in the future.

If there is significant change to current political arrangements between mainland China and Hong Kong,

companies operated in Hong Kong such as us may face similar regulatory risks as those operated in PRC, including their ability to offer

securities to investors, list their securities on a U.S.

or other foreign exchange, conduct their business or accept foreign investment.

In light of China’s recent expansion of authority in Hong Kong, there are risks and uncertainties which we cannot foresee for the

time being, and rules and regulations in China can change quickly with little or no advance notice.

The Chinese government may intervene

or influence our current and future operations in Hong Kong at any time, or may exert more control over offerings conducted overseas

and/or foreign investment in issuers likes ourselves.

See “ Item 1A.

Risk Factors - Risks Related to Doing Business in China .”

Except for the Basic Law, national laws of the

PRC do not apply in Hong Kong unless they are listed in Annex III of the Basic Law and applied locally by promulgation or local legislation.

National laws that may be listed in Annex III are currently limited under the Basic Law to those which fall within the scope of defense

and foreign affairs as well as other matters outside the limits of the autonomy of Hong Kong.

National laws and regulations relating to

data protection, cybersecurity and anti-monopoly have not been listed in Annex III and do not apply directly to Hong Kong and, as such,

the CAC and CSRC do not currently have jurisdiction over companies operating in Hong Kong.

In addition, in light of the recent statements

and regulatory actions by the PRC government, such as those related to Hong Kong’s national security, the promulgation of regulations

prohibiting foreign ownership of Chinese companies operating in certain industries, which are constantly evolving, and anti-monopoly concerns,

we may be subject to the risks of uncertainty of any future actions of the PRC government in this regard including the risk that the PRC

government could disallow our holding company structure, which may result in a material change in our operations, including our ability

to continue our existing holding company structure, carry on our current business, accept foreign investments, and offer or continue to

offer securities to our investors.

These adverse actions could cause the value of our securities to significantly decline or become worthless.

also have operations in mainland China through our subsidiary Universe Travel and that the risks with regards to obtaining regulatory

permissions equally apply to both our China and Hong Kong operation.

We are aware that, recently, the PRC government initiated a series

of regulatory actions and statements to regulate business operations in certain areas in China with little advance notice, including cracking

down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest

entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.

For example, on July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State

Council jointly issued a document to crack down on illegal activities in the securities market and promote the high-quality development

of the capital market, which, among other things, requ ires the relevant governmental authorities to strengthen cross-border oversight

of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve

the system of extraterritorial application of the PRC securities laws.

Also, on July 10, 2021, the Cyberspace Administration of China

(the “CAC”) issued a revised draft of the Measures for Cybersecurity Review for public comments, or the Revised Draft, which

required that, among others, in addition to “operator of critical information infrastructure”, any “data processor”

controlling personal information of no less than one million users (which to be further specified) which seeks to list in a foreign stock

exchange should also be subject to cybersecurity review, and further elaborated the factors to be considered when assessing the national

security risks of the relevant activities.

Except for the Basic Law,

national laws of the PRC do not apply in Hong Kong unless they are listed in Annex III of the Basic Law and applied locally by promulgation

or local legislation.

National laws that may be listed in Annex III are currently limited under the Basic Law to those which fall within

the scope of defense and foreign affairs as well as other matters outside the limits of the autonomy of Hong Kong.

National laws and

regulations relating to data protection, cybersecurity and anti-monopoly have not been listed in Annex III and do not apply directly

to Hong Kong and, as such, the CAC and CSRC do not currently have jurisdiction over companies operating in Hong Kong.

In addition, in light of

the recent statements and regulatory actions by the PRC government, such as those related to Hong Kong’s national security, the

promulgation of regulations prohibiting foreign ownership of Chinese companies operating in certain industries, which are constantly

evolving, and anti-monopoly concerns, we may be subject to the risks of uncertainty of any future actions of the PRC government in this

regard including the risk that the PRC government could disallow our holding company structure, which may result in a material change

in our operations, including our ability to continue our existing holding company structure, carry on our current business, accept foreign

investments, and offer or continue to offer securities to our investors.

These adverse actions could cause the value of our securities

to significantly decline or become worthless.

We also have operations in

mainland China through our subsidiary Universe Travel and that the risks with regards to obtaining regulatory permissions equally apply

to both our China and Hong Kong operation.

We are aware that, recently, the PRC government initiated a series of regulatory actions and

statements to regulate business operations in certain areas in China with little advance notice, including cracking down on illegal activities

in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure,

adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.

on July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly

issued a document to crack down on illegal activities in the securities market and promote the high-quality development of the capital

market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement

and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system

of extraterritorial application of the PRC securities laws.

Also, on July 10, 2021, the Cyberspace Administration of China (the “CAC”)

issued a revised draft of the Measures for Cybersecurity Review for public comments, or the Revised Draft, which required that, among

others, in addition to “operator of critical information infrastructure”, any “data processor” controlling personal

information of no less than one million users (which to be further specified) which seeks to list in a foreign stock exchange should

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

of the relevant activities.

operations in China and Hong Kong are respectively governed by PRC and Hong Kong laws and regulations.

2 unchanged sentences

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:

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

License/Permission

Issuing Authority

Pony Limousine Services Limited

2 unchanged sentences

April 28, 2025 - April 27, 2026

Universe Travel Culture & Technology Ltd.

Universe Travel Culture &

Technology Ltd.

Business License

3 unchanged sentences

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

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

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.

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.

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 Confirmed with PRC councel.

No any update.

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.

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

1 unchanged sentence

For more detailed information, see “Item 1A.

Risk Factors—Risks Related to Our Business—Risks

Related to Doing Business in China”

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.

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 a nd 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.

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.

other foreign exchange.

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

For example, on July 30, 2021, Gary Gensler, former 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.

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.

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.

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.

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, former 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

carpooling, airport pick-up and drop-off, and personal drivers services for travelers between Guangdong Province and Hong Kong.

offer our customers seamless, customized and on-demand access to a variety of transportation options.

Currently, most of our customers

are entities such as business companies, travel agencies or societal associations.

To be as flexible and convenience as possible to our

customers, we take orders from customers any time through WeChat, Tencent QQ, email and phone call, upon which we obtain a quote from

our car fleet companies and forward it to the customer.

Once the order is confirmed, the accepted car fleet company will perform the service

by sen ding a driver to pick up the customer at the scheduled time.

We charge the car fleet company a 5-15% service fee on each

completed order.

Our business is providing,

airport pick-up and drop-off, and personal drivers services for travelers between Guangdong Province and Hong Kong.

We offer our customers seamless,

customized and on-demand access to a variety of transportation options.

Currently, most of our customers are entities such as business

companies, travel agencies or societal associations.

To be as flexible and convenience as possible to our customers, we take orders from

customers any time through WeChat, Tencent QQ, email and phone call, upon which we obtain a quote from our car fleet companies and forward

it to the customer.

Once the order is confirmed, the accepted car fleet company will perform the service by sending a driver to pick

up the customer at the scheduled time.

We charge the car fleet company a 5-15% service fee on each completed order.

Sales and Marketing

We market our services to users directly through

word-of-mouth referrals, brand advertising.

We plan to attract consumers and promote offerings on our “Let’s Go” application

through sponsored events, social networking sites including Facebook, Twitter and Instagram and other similar initiatives.

Our current operations experience seasonality.

We see high demands of our services during the golden week holiday period in China which was intended to help expand the domestic tourism

We market our services to

users directly through word-of-mouth referrals, brand advertising.

We plan to attract consumers and promote offerings on our “Let’s

Go” application through sponsored events, social networking sites including Facebook, Twitter and Instagram and other similar initiatives.

Our current operations experience

We see high demands of our services during the golden week holiday period in China which was intended to help expand the

domestic tourism market.

Our business slows down during February to April.

Intellectual Property

We currently do not have any intellectual property.

in the car service industry is intense and evolving.

Our primary competitors are Shenzhen Anxun Automobile Rental Co., Ltd, The Motor

Transport Company of Guangdong and Hong Kong Limited and China Comfort (Shenzhen) Travel Services Co.

We believe the primary competitive

factors in our markets include pricing, user experience, brand, technological innovation, safety and reliability.

We believe we compete

favorably across these factors.

We are strategically positioned in the Guangdong-Hong Kong market where the demand for traveling between

these two places is high.

However, many of our competitors and potential competitors are larger and have greater brand name recognition,

longer operating histories, larger marketing budgets and established marketing relationships, access to larger customer bases and significantly

greater resources for the development of their offerin gs.

For additional information about the risks to our business related to

competition, see the section titled “ Risk Factors- We face intense competition and could lose market share to our competitors,

which could adversely affect our business, financial condition and results of operations .”

As of the date of this Report, we have a total

of 3 full-time employees and 1 part-time employee working for customer services.

The following table sets forth the number of our employees

categorized by function as of that date:

We currently do not have

any intellectual property.

Competition in the car

service industry is intense and evolving.

Our primary competitors are Shenzhen Anxun Automobile Rental Co., Ltd, The Motor Transport

Company of Guangdong and Hong Kong Limited and China Comfort (Shenzhen) Travel Services Co.

We believe the primary

competitive factors in our markets include pricing, user experience, brand, technological innovation, safety and reliability.

believe we compete favorably across these factors.

We are strategically positioned in the Guangdong-Hong Kong market where the

demand for traveling between these two places is high.

However, many of our competitors and potential competitors are larger and

have greater brand name recognition, longer operating histories, larger marketing budgets and established marketing relationships,

access to larger customer bases and significantly greater resources for the development of their offerings.

For additional

information about the risks to our business related to competition, see the section titled “ Risk Factors- We face intense

competition and could lose market share to our competitors, which could adversely affect our business, financial condition and

results of operations .”

As of the date of this Report,

we have a total of 4 full-time employees.

The following table sets forth the number of our employees categorized by function as of that

Total Number of Employees

2 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 $1,408).

The lease for this facility expires on March 31, 2025 and we expect to renew the lease for

a further term.

We have an office lease

at Room 17, Flat B, 17/F, Tsipeng Industrial Building, San Po Kong, Kowloon, Hong Kong, China, for a monthly rent of HKD 3,700 (approximately

The lease for this facility expires on June 30, 2027.

We believe the rented space is sufficient for our current operations

We currently do not have any insurance coverage 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.

and consider our current facilities adequate for our current operations.

We currently do not

have any insurance coverage 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

From time to time, we may in the future become

a party to various legal or administrative proceedings arising in the ordinary course of our business, including actions with respect

to intellectual property infringement, violation of third-party licenses or other rights, breach of contract and labor and employment

We are currently not a party to, and we are not aware of any threat of, any legal or administrative proceedings that, in the opinion

of our management, are likely to have any material and adverse effect on our business, financial condition, cash-flow or results of operations.

This section sets forth a summary of the most significant laws, rules

and regulations that affect our business and operations in China.

We provide our service through third-party transportation companies

and do not own the vehicle ourselves for their operations;

therefore we believe we do not need to disclose the qualifications related

to vehicle transportation operations.

From time to time, we may

in the future become a party to various legal or administrative proceedings arising in the ordinary course of our business, including

actions with respect to intellectual property infringement, violation of third-party licenses or other rights, breach of contract and

labor and employment claims.

We are currently not a party to, and we are not aware of any threat of, any legal or administrative proceedings

that, in the opinion of our management, are likely to have any material and adverse effect on our business, financial condition, cash-flow

or results of operations.

This section sets forth a

summary of the most significant laws, rules and regulations that affect our business and operations in China.

We provide our service

through third-party transportation companies and do not own the vehicle ourselves for their operations;

therefore we believe we do not

need to disclose the qualifications related to vehicle transportation operations.

Regulations Relating to Foreign Investment

The Guidance Catalog of Industries for Foreign Investment

activities in the PRC by foreign investors shall comply with the Guidance Catalog of Industries for Foreign Investment, or the Catalog,

which was promulgated and is amended continuously by MOFCOM, and the National Development and Reform Commission, or NDRC.

the Catalog, industries are classified as three categories:

encouraged foreign invested industries, restricted foreign invested industries

and prohibited foreign invested industries.

Any industry not listed in the Catalog or any encouraged foreign invested industry listed

in the Catalog is a permitted industry.

Some restricted industries are limit ed to equity or contractual joint ventures, while in

some cases Chinese partners are required to hold the majority interests in such joint ventures.

Foreign investors are not allowed to invest

in industries within the prohibited category.

Industries not listed in the Catalogue are generally open to foreign investment unless specifically

restricted by other PRC regulations.

June 2018, the MOFCOM and the NDRC promulgated the Special Administrative Measures for the Access of Foreign Investment (Negative List),

or the Negative List (2018), effective in July 2018.

The Negative List (2018) expands the scope of permitted industries by foreign investment

by reducing the number of industries that fall within the Negative List (2018) where restrictions on the shareholding percentage or requirements

Investment activities in

the PRC by foreign investors shall comply with the Guidance Catalog of Industries for Foreign Investment, or the Catalog, which was promulgated

and is amended continuously by MOFCOM, and the National Development and Reform Commission, or NDRC.

According to the Catalog, industries

are classified as three categories:

encouraged foreign invested industries, restricted foreign invested industries and prohibited foreign

invested industries.

Any industry not listed in the Catalog or any encouraged foreign invested industry listed in the Catalog is a permitted

Some restricted industries are limited to equity or contractual joint ventures, while in some cases Chinese partners are required

to hold the majority interests in such joint ventures.

Foreign investors are not allowed to invest in industries within the prohibited

Industries not listed in the Catalogue are generally open to foreign investment unless specifically restricted by other PRC

In June 2018, the MOFCOM

and the NDRC promulgated the Special Administrative Measures for the Access of Foreign Investment (Negative List), or the Negative List

(2018), effective in July 2018.

The Negative List (2018) expands the scope of permitted industries by foreign investment by reducing

the number of industries that fall within the Negative List (2018) where restrictions on the shareholding percentage or requirements

on the composition of board or senior management still exists.

5 unchanged sentences

On December 27, 2021, NDRC

and MOFCOM jointly issued the Special Administra tive 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.

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,

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.

On 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.

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.

that our current business is to provide travel services and therefore we do not falls

in the Negative List (2021), the Negative List (2018) nor the Negative List (2019).

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.

September 6, 2024, the NDRC and the MOC jointly issued the Special Administrative Measures (Negative List) for Foreign Investment

Access (2024 Version), which became effective on November 1, 2024, to supersede the Special Administrative Measures (Negative List)

for Foreign Investment Access (2021 Version).

We believe that our current business is to provide travel services and therefore we do

not fall in the Negative List (2024 Version).

Foreign Investment Law

On March 15, 2019, the National People’s

Congress promulgated the Foreign Investment Law, which will become effective on January 1, 2020 and replace three existing laws on foreign

investments in China, namely, the Sino-Foreign Equity Joint Venture Enterprise Law and the Foreign Owned Enterprise Law, together with

their implementations and ancillary regulations to become the legal foundation for foreign investment in the PRC.

to the Foreign Investment Law, the State Council will publish or approve to publish a catalogue for special administrative measures, or

the “negative list.” The Foreign Investment Law grants national treatment to foreign invested entities, except for those foreign

invested entities that operate in industries deemed to be either “restricted” or “prohibited” in the “negative

list.” Because the “negative list” has yet to be published, it is unclear whether it will differ from the current Negative

The Foreign Investment Law provides that foreign invested entities operating in foreign restricted or prohibited industries will

require market entry clearance and other approvals from relevant PRC governmental authorities.

Furthermore, the Foreign Investment Law

provides that foreign invested enterprises established according to the existing laws regulating foreign investment may maintain their

structure and corporate governance within five years after the implementing of the Foreign Investment Law.

On March 15, 2019, the National

People’s Congress promulgated the Foreign Investment Law, which will become effective on January 1, 2020 and replace three existing

laws on foreign investments in China, namely, the Sino-Foreign Equity Joint Venture Enterprise Law and the Foreign Owned Enterprise Law,

together with their implementations and ancillary regulations to become the legal foundation for foreign investment in the PRC.

According to the Foreign

Investment Law, the State Council will publish or approve to publish a catalogue for special administrative measures, or the “negative

list.” The Foreign Investment Law grants national treatment to foreign invested entities, except for those foreign invested entities

that operate in industries deemed to be either “restricted” or “prohibited” in the “negative list.”

Because the “negative list” has yet to be published, it is unclear whether it will differ from the current Negative List.

The Foreign Investment Law provides that foreign invested entities operating in foreign restricted or prohibited industries will require

market entry clearance and other approvals from relevant PRC governmental authorities.

Furthermore, the Foreign Investment Law provides

that foreign invested enterprises established according to the existing laws regulating foreign investment may maintain their structure

and corporate governance within five years after the implementing of the Foreign Investment Law.

Measures for Reporting of Foreign Investment Information

September 3, 2016, the Standing Committee of the National People’s Congress promulgated the Order of the Standing Committee of the

National People’s Congress on Amending Four Laws Including the Law of the People’s Republic of China on Wholly Foreign-owned

Enterprises (the “Order”), which provides record-filing in lieu of administrative approval for the establishments and alterations

of foreign invested enterprises (the “FIEs”) not subject to special administrative measures.

In order to provide more guidance

for foreign- invested Enterprises, the MOFCOM issued the Interim Administrative Measures for the Record-filing for the Establishment

and Alteration of Foreign-invested Enterprises (the “Interim Measure”) on October 8, 2016 (Revised in

July 30, 2017 and June 29, 2018), or the Measures.

The Measures provided detail instructions for foreign-invested enterprise to carry

out record filing in terms of the change of the enterprise in China.

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 Measures.

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.

On September 3, 2016,

the Standing Committee of the National People’s Congress promulgated the Order of the Standing Committee of the National

People’s Congress on Amending Four Laws Including the Law of the People’s Republic of China on Wholly Foreign-owned

Enterprises (the “Order”), which provides record-filing in lieu of administrative approval for the establishments and

alterations of foreign invested enterprises (the “FIEs”) not subject to special administrative measures.

provide more guidance for foreign-invested Enterprises, the MOFCOM issued the Interim Administrative Measures for the Record-filing

for the Establishment and Alteration of Foreign-invested Enterprises (the “Interim Measure”) on October 8, 2016 (Revised

in July 30, 2017 and June 29, 2018), or the Measures.

The Measures provided 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 Measures.

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

Provisions Regarding Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, was jointly promulgated

by MOFCOM, China Securities Regulatory Commission, or CSRC, the State-owned Assets Supervision and Administration Commission of the State

Council, State Administration of Taxation, State Administration of Industry and Commerce and State Administration of Foreign Exchange,

or SAFE, on August 8, 2006 and became effective as of September 8, 2006, and were later amended on June 22, 2009.

This M&A Rules governs

among other things, the purchase and subscription by foreign investors of equity interests in a domestic enterprise, and the purchase

and operation by foreign investors of the assets and business of a domestic enterprise.

An offshore special purpose vehicle, or SPV, is

defined under the M&A Rules as an offshore entity directly or indirectly controlled by Chinese individuals or enterprises for the

purpose of an overseas listing, and the main assets of which are the rights and interests in affiliated domestic enterprises.

the M&A Rules, if a SPV intends to merge with or acquire any domestic enterprise affiliated from the Chinese individuals or enterprises

that control the SPV, such proposed merger for approval.

The M&A Rules also require that a SPV shall obtain an approval from the CSRC

prior to the listing and trading of its securities on an overseas stock exchange.

The Provisions Regarding

Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, was jointly promulgated by MOFCOM, China

Securities Regulatory Commission, or CSRC, the State-owned Assets Supervision and Administration Commission of the State Council, State

Administration of Taxation, State Administration of Industry and Commerce and State Administration of Foreign Exchange, or SAFE, on August

8, 2006 and became effective as of September 8, 2006, and were later amended on June 22, 2009.

This M&A Rules governs among other

things, the purchase and subscription by foreign investors of equity interests in a domestic enterprise, and the purchase and operation

by foreign investors of the assets and business of a domestic enterprise.

An offshore special purpose vehicle, or SPV, is defined under

the M&A Rules as an offshore entity directly or indirectly controlled by Chinese individuals or enterprises for the purpose of an

overseas listing, and the main assets of which are the rights and interests in affiliated domestic enterprises.

Under the M&A Rules,

if a SPV intends to merge with or acquire any domestic enterprise affiliated from the Chinese individuals or enterprises that control

the SPV, such proposed merger for approval.

The M&A Rules also require that a SPV shall obtain an approval from the CSRC prior to

the listing and trading of its securities on an overseas stock exchange.

Regulations Relating to Intellectual Property Rights

Software Copyright

Copyright Law of the PRC, promulgated in 1990 and amended it in 2001 and 2010, and the Regulations on Computer Software Protection, promulgated

by the State Council of the PRC on December 20, 2001 and revised on January 8, 2011 and January 1, 2013, provide protection to the rights

and interests of computer software copyright holders.

Pursuant to the Regulations on Computer Software Protection, software developed

by PRC citizens, legal entities or other organizations is automatically protected immediately after its development, regardless of whether

the software was published.

A software copyright owner may register with the designated registration authorities and obtain a registration

certificate, w hich serves as preliminary proof of ownership of the copyright and other registered matters.

The operational procedures

for the registration of software copyright and the registration of software copyright license and transfer agreements are set forth in

the Measures on Computer Software Copyright Registration promulgated by the National Copyright Administration on February 20, 2002.

The NPCSC adopted the Patent Law of the PRC in

1984 and amended it in 1992, 2000 and 2008, respectively.

A patentable invention, utility model or design must meet three conditions:

The Copyright Law of the

PRC, promulgated in 1990 and amended it in 2001 and 2010, and the Regulations on Computer Software Protection, promulgated by the State

Council of the PRC on December 20, 2001 and revised on January 8, 2011 and January 1, 2013, provide protection to the rights and interests

of computer software copyright holders.

Pursuant to the Regulations on Computer Software Protection, software developed by PRC citizens,

legal entities or other organizations is automatically protected immediately after its development, regardless of whether the software

was published.

A software copyright owner may register with the designated registration authorities and obtain a registration certificate,

which serves as preliminary proof of ownership of the copyright and other registered matters.

The operational procedures for the registration

of software copyright and the registration of software copyright license and transfer agreements are set forth in the Measures on Computer

Software Copyright Registration promulgated by the National Copyright Administration on February 20, 2002.

The NPCSC adopted the Patent

Law of the PRC in 1984 and amended it in 1992, 2000 and 2008, respectively.

A patentable invention, utility model or design must meet

three conditions:

novelty, inventiveness and practical applicability.

Patents cannot be granted for scientific discoveries, rules and methods for intellectual

activities, methods used to diagnose or treat diseases, animal and plant breeds or substances obtained by means of nuclear transformation.

The Patent Office under the State Intellectual Property Office is responsible for receiving, examining and approving patent applications.

A patent is valid for a twenty-year term for an invention and a ten-year term for a utility model or design, starting from the application

Except under certain specific circumstances provided by law, any third party user must obtain consent or a proper license from the

patent owner to use the patent, otherwise the use will constitute an infringement of the rights of the patent holder.

On November 5, 2004, the MIIT promulgated the Measures

for Administration of Domain Names for the Chinese Internet, or the Domain Name Measures.

According to the Domain Name Measures, “domain

name” shall refer to the character identifier for identifying and locating the hierarchical structure of a computer on the Internet,

which corresponds to the Internet protocol (IP) address of the computer concerned.

A domain name registration service shall observe the

principle of “first apply, first register”.

Where the domain name is completed, the applicant for the domain name registration

shall be the holder of the domain name.

The PRC Trademark Law, adopted in 1982 and revised

in 2001 and 2013, respectively, with its implementation rules adopted in 2002 and revised in 2014, protects registered trademarks.

Trademark Office handles trademark registrations and grants a protection term of ten years to registered trademarks.

Patents cannot be granted for scientific discoveries, rules and

methods for intellectual activities, methods used to diagnose or treat diseases, animal and plant breeds or substances obtained by means

of nuclear transformation.

The Patent Office under the State Intellectual Property Office is responsible for receiving, examining and

approving patent applications.

A patent is valid for a twenty-year term for an invention and a ten-year term for a utility model or design,

starting from the application date.

Except under certain specific circumstances provided by law, any third party user must obtain consent

or a proper license from the patent owner to use the patent, otherwise the use will constitute an infringement of the rights of the patent

On November 5, 2004, the

MIIT promulgated the Measures for Administration of Domain Names for the Chinese internet, or the Domain Name Measures.

the Domain Name Measures, “domain name” shall refer to the character identifier for identifying and locating the hierarchical

structure of a computer on the internet, which corresponds to the internet protocol (IP) address of the computer concerned.

name registration service shall observe the principle of “first apply, first register”.

Where the domain name is completed,

the applicant for the domain name registration shall be the holder of the domain name.

The PRC Trademark Law, adopted

in 1982 and revised in 2001 and 2013, respectively, with its implementation rules adopted in 2002 and revised in 2014, protects registered

The Trademark Office handles trademark registrations and grants a protection term of ten years to registered trademarks.

Regulations on Foreign Exchange

Foreign Exchange Settlement

Circular of the State Administration of Foreign Exchange on Reforming the Management Approach regarding the Settlement of Foreign Exchange

Capital of Foreign-invested Enterprises, which was promulgated by the SAFE on March 30, 2015 and became effective as of June 1, 2015,

adopts the approach of discretional foreign exchange settlement, under which the foreign exchange capital in the capital account of a

foreign-invested enterprise for which the foreign-invested enterprise has obtained confirmation by the local SAFE branches regarding the

rights and interests of monetary contribution (or the book-entry registration of monetary contribution by the banks) c an be settled

at the banks based on the actual operation needs of such foreign-invested enterprise.

The capital in Renminbi obtained by the foreign-invested

enterprise from the discretionary settlement of foreign exchange capital shall be managed under the account pending for foreign exchange

settlement payment.

The proportion of discretionary settlement of foreign exchange capital is temporarily determined as 100%, subject

to the adjustment of the SAFE.

Regulations Relating to Foreign Exchange Registration

of Overseas Investment by PRC Residents

SAFE Circular 37 promulgated by the SAFE in July

2014, requires PRC residents or entities to register with the SAFE or its local branch their establishment or control of an offshore entity

established for the purpose of overseas investment or financing.

In addition, such PRC residents or entities must update their SAFE registrations

when the offshore special purpose vehicle undergoes material events relating to any change of its basic information (including change

of such PRC citizens or residents, name and operation term, and etc.) increases or decreases in investment amount, transfers or exchanges

of shares, or mergers or divisions, etc.

further enacted the Notice of the SAFE on Further Simplifying and Improving the Foreign Exchange Management Policies for Direct Investment,

or the SAFE Notice 13, on February 13, 2015, which allows PRC residents or entities to register with qualified banks their establishment

or control of an offshore entity established for the purpose of overseas investment or financing.

However, remedial registration applications

made by PRC residents that previously failed to comply with the SAFE Circular 37 will continue to fall under the jurisdiction of the relevant

The Circular of the State

Administration of Foreign Exchange on Reforming the Management Approach regarding the Settlement of Foreign Exchange Capital of Foreign-invested

Enterprises, which was promulgated by the SAFE on March 30, 2015 and became effective as of June 1, 2015, adopts the approach of discretional

foreign exchange settlement, under which the foreign exchange capital in the capital account of a foreign-invested enterprise for which

the foreign-invested enterprise has obtained confirmation by the local SAFE branches regarding the rights and interests of monetary contribution

(or the book-entry registration of monetary contribution by the banks) can be settled at the banks based on the actual operation needs

of such foreign-invested enterprise.

The capital in Renminbi obtained by the foreign-invested enterprise from the discretionary settlement

of foreign exchange capital shall be managed under the account pending for foreign exchange settlement payment.

The proportion of discretionary

settlement of foreign exchange capital is temporarily determined as 100%, subject to the adjustment of the SAFE.

Regulations Relating to Foreign Exchange Registration of Overseas

Investment by PRC Residents

SAFE Circular 37

promulgated by the SAFE in July 2014, requires PRC residents or entities to register with the SAFE or its local branch their

establishment or control of an offshore entity established for the purpose of overseas investment or financing.

In addition, such

PRC residents or entities must update their SAFE registrations when the offshore special purpose vehicle undergoes material events

relating to any change of its basic information (including change of such PRC citizens or residents, name and operation term, and

etc.) increases or decreases in investment amount, transfers or exchanges of shares, or mergers or divisions, etc.

SAFE further enacted the

Notice of the SAFE on Further Simplifying and Improving the Foreign Exchange Management Policies for Direct Investment, or the SAFE Notice

13, on February 13, 2015, which allows PRC residents or entities to register with qualified banks their establishment or control of an

offshore entity established for the purpose of overseas investment or financing.

However, remedial registration applications made by

PRC residents that previously failed to comply with the SAFE Circular 37 will continue to fall under the jurisdiction of the relevant

local branch of the SAFE.

2 unchanged sentences

and from carrying out subsequent cross-border foreign exchange activities.

Further, the special purpose vehicle may be restricted in its

ability to contribute additional capital in to its PRC subsidiary.

Further, the special purpose vehicle may be restricted in

its ability to contribute additional capital into its PRC subsidiary.

Regulations Relating to Dividend Distribution

principal laws and regulations regulating the distribution of dividends by FIEs in the PRC include the Company Law of the PRC, as amended

in 1999, 2004, 2005, 2013 and 2018, the Wholly Foreign-owned Enterprise Law of the PRC promulgated in 1986 and last amended in 2016 and

its implementation regulations promulgated in 1990 and subsequently amended in 2001 and 2014, the Equity Joint Venture Law of the PRC

promulgated in 1979 and last amended in 2016 and its implementation regulations promulgated in 1983 and last amended in 2014, and the

Cooperative Joint Venture Law of the PRC promulgated in 1988 and last amended in 2017 and its implementation regulations promulgated in

1995 and last amended in 2017.

Under the current regulatory regime in the PRC, FIEs in the PRC may pay dividends only out of their accumulated

profit, if any, determined in accordance with PRC accounting standards and regulations.

Except otherwise provided by the laws regarding

foreign investment, a PRC company is required to set aside at l east 10% of its after-tax profit as general reserves until the cumulative

amount of such reserves reaches 50% of the company’s registered capital.

A PRC company shall not distribute any profits until any

losses from prior fiscal years have been offset.

Profits retained from prior

fiscal years may be distributed together with distributable profits from the current fiscal year.

The principal laws and regulations

regulating the distribution of dividends by FIEs in the PRC include the Company Law of the PRC, as amended in 1999, 2004, 2005, 2013

and 2018, the Wholly Foreign-owned Enterprise Law of the PRC promulgated in 1986 and last amended in 2016 and its implementation regulations

promulgated in 1990 and subsequently amended in 2001 and 2014, the Equity Joint Venture Law of the PRC promulgated in 1979 and last amended

in 2016 and its implementation regulations promulgated in 1983 and last amended in 2014, and the Cooperative Joint Venture Law of the

PRC promulgated in 1988 and last amended in 2017 and its implementation regulations promulgated in 1995 and last amended in 2017.

the current regulatory regime in the PRC, FIEs in the PRC may pay dividends only out of their accumulated profit, if any, determined

in accordance with PRC accounting standards and regulations.

Except otherwise provided by the laws regarding foreign investment, a PRC

company is required to set aside at least 10% of its after-tax profit as general reserves until the cumulative amount of such reserves

reaches 50% of the company’s registered capital.

A PRC company shall not distribute any profits until any losses from prior fiscal

years have been offset.

Profits retained from prior fiscal years may be distributed together with distributable profits from the current

Regulations Relating to Foreign Debts

Considering that certain foreign debts may be generated during the

oversea or domestic investment from PRC residents, the State Administration of Foreign Exchange promulgated the Administrative Measures

for Registration of Foreign Debts, or the Measures, on April 28, 2013 and became effective on May 13, 2013.

These measures require the

entity to complete several regulatory procedures in terms of foreign debts.

For example, after borrowed the foreign debts, debtors shall

carry out registration on local SAFE in relation to the execution of the contract, the drawdown, the prepayment or the foreign exchange

settlement and sales within a specific period.

For any change of the foreign debts contract, an amendment registration shall be carried

out with the local SAFE.

Considering that certain

foreign debts may be generated during the oversea or domestic investment from PRC residents, the State Administration of Foreign Exchange

promulgated the Administrative Measures for Registration of Foreign Debts, or the Measures, on April 28, 2013 and became effective on

May 13, 2013.

These measures require the entity to complete several regulatory procedures in terms of foreign debts.

For example, after

borrowed the foreign debts, debtors shall carry out registration on local SAFE in relation to the execution of the contract, the drawdown,

the prepayment or the foreign exchange settlement and sales within a specific period.

For any change of the foreign debts contract, an

amendment registration shall be carried out with the local SAFE.

Regulations Relating to Employment and Social Insurance

to the PRC Labor Law effective as of January 1, 1995 (as amended on August 27, 2009), and the PRC Labor Contract Law effective as of January

Pursuant to the PRC

Labor Law effective as of January 1, 1995 (as amended on August 27, 2009), and the PRC Labor Contract Law effective as of January 1,

2008 (as amended on December 28, 2012), a written labor contract shall be executed by employer and an employee when the employment

relationship is established, and an employer is under an obligation to sign an unlimited- term labor contract with any employee who has

worked for the employer for ten consecutive years.

In addition, if an employee requests or agrees to renew a fixed-term labor contract

that has already been entered into twice consecutively, the resulting contract must include an unlimited term, with certain exceptions.

All employers are required to establish a system for labor safety and sanitation, strictly abide by state rules and standards and provide

employees with appropriate workplace safety training.

Moreover, all PRC enterprises are generally required to implement a standard working

time system of eight hours a day and forty hours a week, and if the implementation of such standard working time system is not appropriate

due to the nature of the job or the on, the enterprise may implement a flexible working time system or comprehensive working time system

after obtaining approvals from the relevant authorities.

According to the Social Insurance Law of China

effective from July 1, 2011, and the Housing Fund Regulation which was amended and became effective on March 24, 2002, employers in China

shall pay contributions to the social insurance plan and the housing fund plan for their employees, and such contribution amount payable

shall be calculated based on the employee actual salary in accordance with the relevant regulations.

relationship is established, and an employer is under an obligation to sign an unlimited- term labor contract with any employee who

has worked for the employer for ten consecutive years.

In addition, if an employee requests or agrees to renew a fixed-term labor

contract that has already been entered into twice consecutively, the resulting contract must include an unlimited term, with certain

All employers are required to establish a system for labor safety and sanitation, strictly abide by state rules and

standards and provide employees with appropriate workplace safety training.

Moreover, all PRC enterprises are generally required to

implement a standard working time system of eight hours a day and forty hours a week, and if the implementation of such standard

working time system is not appropriate due to the nature of the job or the on, the enterprise may implement a flexible working time

system or comprehensive working time system after obtaining approvals from the relevant authorities.

According to the Social Insurance

Law of China effective from July 1, 2011, and the Housing Fund Regulation which was amended and became effective on March 24, 2002, employers

in China shall pay contributions to the social insurance plan and the housing fund plan for their employees, and such contribution amount

payable shall be calculated based on the employee actual salary in accordance with the relevant regulations.

Regulations on Tax

PRC Enterprise Income Tax Law

March 16, 2007, the National People’s Congress promulgated the Law of the PRC on Enterprise Income Tax, which was amended on February

24, 2017 and December 29, 2018, and on December 6, 2007, the State Council of the PRC enacted The Regulations for the Implementation of

the Law on Enterprise Income Tax, or collectively, the EIT Law.

According to the EIT Law, taxpayers consist of resident enterprises and

On March 16, 2007, the National

People’s Congress promulgated the Law of the PRC on Enterprise Income Tax, which was amended on February 24, 2017 and December

29, 2018, and on December 6, 2007, the State Council of the PRC enacted The Regulations for the Implementation of the Law on Enterprise

Income Tax, or collectively, the EIT Law.

According to the EIT Law, taxpayers consist of resident enterprises and non-resident enterprises.

Resident enterprises are defined as enterprises that are established in China in accordance with PRC laws, or that are established in

accordance with the laws of foreign countries but whose “de facto management body” is located in the PRC.

Non-resident enterprises

Resident enterprises are defined as enterprises that are established in China in accordance with PRC laws, or

that are established in accordance with the laws of foreign countries but whose “de facto management body” is located in the

Non-resident enterprises are defined as enterprises that are set up in accordance with the laws of foreign countries and whose de

facto management body is located outside the PRC, but have either established institutions or premises in the PRC or have income generated

from inside the PRC.

Under the EIT Law and relevant implementing regulations, en terprises are subject to a uniform corporate income

tax rate of 25%.

However, if non-resident enterprises have not formed permanent establishments or premises in the PRC, or if they have

formed permanent establishments or premises in the PRC but their relevant income derived in the PRC is not related to those establishments,

then their enterprise income tax would be set at a rate of 10% for their income sourced from inside the PRC.

noted, the EIT Law provides that an income tax rate of 10% will be applicable to dividends or other gains received by investors who are

“non-resident enterprises” and who meet the requirements for the lower enterprise income tax rate.

Such income tax on dividends

may be reduced further by the tax treaties between China and the jurisdictions in which our non-PRC shareholders reside.

Specifically,

pursuant to an Arrangement between the PRC and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention

of Fiscal Evasion, or the Double Tax Avoidance Arrangement, and other applicable PRC laws, if a Hong Kong enterprise (being the beneficial

owner of dividends from a PRC enterprise) is determined by the competent PRC tax authority to have satisfied the relevant conditions and

requirements under such Double Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends that the

Hong Kong enterprise receives from the PRC enterprise may be reduced t o 5% subject to approval from the relevant tax authority.

However, based on the Notice on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties, or Notice No.

issued on February 20, 2009 by the State Tax Administration, if the relevant PRC tax authorities determine, in their discretion, that

a company benefits from such reduced income tax rate due to a corporate structure or arrangement that is primarily tax-driven, such PRC

tax authorities may adjust the preferential tax treatment.

Moreover, based on the

Announcement on Certain Issues Concerning the Recognition of Beneficial Owners in Tax Treaties, which was issued on February 3, 2018 by

the State Tax Administration, conduit companies, which are established for the purpose of evading or reducing tax, or transferring or

accumulating profits, shall not be recognized as beneficial owners and are thus not entitled to the above tax benefits.

are defined as enterprises that are set up in accordance with the laws of foreign countries and whose de facto management body is located

outside the PRC, but have either established institutions or premises in the PRC or have income generated from inside the PRC.

the EIT Law and relevant implementing regulations, enterprises are subject to a uniform corporate income tax rate of 25%.

non-resident enterprises have not formed permanent establishments or premises in the PRC, or if they have formed permanent establishments

or premises in the PRC but their relevant income derived in the PRC is not related to those establishments, then their enterprise income

tax would be set at a rate of 10% for their income sourced from inside the PRC.

As noted, the EIT Law provides

that an income tax rate of 10% will be applicable to dividends or other gains received by investors who are “non-resident enterprises”

and who meet the requirements for the lower enterprise income tax rate.

Such income tax on dividends may be reduced further by the tax

treaties between China and the jurisdictions in which our non-PRC shareholders reside.

Specifically, pursuant to an Arrangement between

the PRC and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion, or the

Double Tax Avoidance Arrangement, and other applicable PRC laws, if a Hong Kong enterprise (being the beneficial owner of dividends from

a PRC enterprise) is determined by the competent PRC tax authority to have satisfied the relevant conditions and requirements under such

Double Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends that the Hong Kong enterprise receives

from the PRC enterprise may be reduced to 5% subject to approval from the relevant tax authority.

However, based on the Notice on Certain

Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties, or Notice No.

81, issued on February 20, 2009 by the State

Tax Administration, if the relevant PRC tax authorities determine, in their discretion, that a company benefits from such reduced income

tax rate due to a corporate structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential

tax treatment.

Moreover, based on the Announcement on Certain Issues Concerning the Recognition of Beneficial Owners in Tax Treaties,

which was issued on February 3, 2018 by the State Tax Administration, conduit companies, which are established for the purpose of evading

or reducing tax, or transferring or accumulating profits, shall not be recognized as beneficial owners and are thus not entitled to the

above tax benefits.

PRC Value-added Tax Law

Provisional Regulations of the PRC on Value-added Tax were promulgated by the State Council of the PRC on December 13,1993 and subsequently

The Provisional

Regulations of the PRC on Value-added Tax were promulgated by the State Council of the PRC on December 13,1993 and subsequently

amended on November 10, 2008, February 6, 2016 and November 19, 2017.

The Detailed Rules for the Implementation of the Provisional Regulations

of the PRC on Value-added Tax (Revised in 2011) was promulgated by the Ministry of Finance and the SAT on December 15, 2008 and subsequently

amended on October 28, 2011 (collectively, the “VAT Law”).

According to the VAT Law, all enterprises and individuals engaged

in the sale of goods, provision of processing, repair and replacement services, and importation of goods within th e territory of

the PRC must pay value-added tax, or VAT.

Other than exports (subject to 0% VAT rate) and certain products listed in the VAT Law (subject

to 11% VAT rate), the sale and importation of goods were generally subject to a VAT rate of 17%.

Pursuant to the Circular of the Ministry

of Finance and the State Administration of Taxation on Adjusting Value-added Tax Rates, which became effective on May 1, 2018, the previous

applicable VAT rate of 17% and 11% are adjusted to 16% and 10%, respectively.

The Detailed Rules for the Implementation of the Provisional

Regulations of the PRC on Value-added Tax (Revised in 2011) was promulgated by the Ministry of Finance and the SAT on December 15,

2008 and subsequently amended on October 28, 2011 (collectively, the “VAT Law”).

According to the VAT Law, all

enterprises and individuals engaged in the sale of goods, provision of processing, repair and replacement services, and importation

of goods within the territory of the PRC must pay value-added tax, or VAT.

Other than exports (subject to 0% VAT rate) and certain

products listed in the VAT Law (subject to 11% VAT rate), the sale and importation of goods were generally subject to a VAT rate of

Pursuant to the Circular of the Ministry of Finance and the State Administration of Taxation on Adjusting Value-added Tax

Rates, which became effective on May 1, 2018, the previous applicable VAT rate of 17% and 11% are adjusted to 16% and 10%,

respectively.

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 1. Business